Background

Africa has a huge and largely untapped renewable energy potential, while at the same time over 640 million Africans lack access to electricity. Renewable energy technologies are in many cases able to generate power at a lower cost compared to fossil fuels, and are particularly suited to provide energy in rural areas far from the grid. However, the fact that most widespread renewable energy sources (solar and wind) are intermittent increases costs and limits a more wide-spread diffusion in the absence of storage solutions, “hybridization” or adequate grid infrastructure.

Exploring hybrid models for universal access to basic solar energy services in informal settlements: Case studies from South Africa and Zimbabwe

Overview

Research partners: The Sustainability Institute (SI) (South Africa) in collaboration with Shack Dwellers International (SDI).

In order to achieve Sustainable Development Goal 7, innovative approaches will be required to deliver affordable, reliable, sustainable and modern energy to Africa’s poor. Solar Home Systems (SHSs) are an increasingly affordable and reliable option for low-income urban households to access electricity in a manner that bypasses the legal, financial and practical barriers that often impede grid electrification in urban informal settlements. Adaptive hybrid models have been emphasized as a solution for delivering and scaling access to SHSs so that synergies between government- donor- or market-led approaches can be harnessed to achieve truly universal, and thus equitable, access. This research looks at two case studies of SHS delivery models that could, if combined, embody some of the envisaged benefits of the hybrid idea.

Key Findings

  • The use of renewable, off-grid technologies, such as SHSs can drastically speed up the process of upgrading informal settlements. However, the recent proliferation of SHSs in rural SSA has contributed to some negative perceptions about the technology, especially when sales are not backed-up with a high quality after-sales maintenance support. Also, the high entry costs of SHSs that are priced and financed for profit (i.e. not subsidised) means that commercial ventures are limited in their impact on the poorest of the poor. Conversely, subsidised government-led projects can crowd out positive competitive elements that drive growth and innovation, and can stifle private investments in longer-term energy services. 
  • Thanks to rapid technical advances, the capital and maintenance costs of SHSs are now relatively modest in comparison to the operations and maintenance costs of grid electricity. Thus, SHSs are now a cost-effective way for the state to start contributing to universal energy access in line with the growing international consensus on basic energy as a right and with the SDGs. Together with an operational subsidy from local government, affordable end-user co-payments can ensure the long-term sustainability and maintenance of a basic energy service using SHSs. This then provides a solid basis upon which the service can later be incrementally upgraded.
  • By delivering such a subsidised energy service via flexible and adaptive partnerships between the state, enterprises (for-profit and/or not-for-profit) and civil society organisations, each household’s voluntary opt-in can help to establish political buy-in from target communities who might otherwise collectively object to the service as an inferior alternative to grid connection. Furthermore, end-users are more likely to keep using and paying for the service if pricing and payment options are flexible and convenient, and if payment defaults can, to some extent, be intermediated at community level via well-established social processes and networks (e.g. savings and loan groups). Such social processes are likely to reinforce a sense of social contract and responsibility amongst users. This socially-mediated financial resilience can be further enhanced through the implementation of efficient business-orientated operating systems to ensure that costs are minimized and therefore affordability maximized. The social processes can, in turn, reduce costs by relieving the enterprise of the need to invest heavily in marketing, technical literacy and default debt collection. These synergies should translate to lower overall running costs and hence lower product pricing and improved access to the service.
  • The iShack and Dzivarasekwa projects share a common goal of universal access to basic, clean electricity in poor, under-served urban communities. The reciprocal strengths and weaknesses of these two projects brings into relief the opportunity for symbiotic partnerships in future.

Documents

Universal Electrification Development Strategies for Ethiopia

Overview

Research partners: International Food Policy Research Institute (IFPRI) in collaboration with the Ministry of Water, Irrigation & Electricity of Ethiopia.

This project provides evidence-based policy recommendations for optimal use of Ethiopian energy resources to improve electricity access, promote energy security and mitigate greenhouse gas emissions to contribute to mitigating climate change. It contributes to the design of policies and strategies that minimize investment risk for scaling up clean technologies for power generation in Ethiopia for both on-grid and off-grid systems. The project involves: 1) assessing alternative energy development pathways using a regional (Ethiopia-Egypt-Sudan) TIMES model for “on-grid” electricity generation plans, 2) optimization and cost-benefit assessment of hybrid power systems for off-grid rural electrification in Ethiopia, and 3) national capacity development on energy planning models for both on-grid and off-grid systems.

Key Findings

On-grid system planning

The results presented from the TIMES model have important policy implications. Alternative energy development pathways can meet different policy priorities or policy goals, such as providing electricity for all (universal electrification), decreasing fossil fuel use to improve energy security, and promoting reliable and affordable energy sector development through the optimal use of renewable energy sources. Each of these policy choices affects total systems cost of power generation to meet demand and has differing environmental impacts. 

Notably, the results show that across all the developed alternative policy options, the current supply of energy sources to generate electricity will need to diversify from hydropower to a mix of hydro, solar, and wind. The potential contribution of natural gas- and coal-based power plants for electricity generation is limited. Model results suggest that initial investments in renewable energy-based power generation capacity can be paid back over the long term. Expansion of electricity access to the entire population entails large investments in power generation capacity and substantial increases in total system costs (a 40.6%-increase compared to the Reference option) of electricity production. 

The results support the feasibility of investing in alternative technologies for power generation in Ethiopia to meet projected electricity demand. Solar PV and wind power have significant potential to supply Ethiopian power as investment costs of these technologies are slated to decline dramatically in the future.

Off-grid system planning

A study of a hybrid system to electrify a remote rural village in Ethiopia was also undertaken. The HOMER model was used to assess primary data for a load profile to identify optimal least-cost system options. Primary data were gathered to develop the load profile for modeling analysis using a questionnaire, focus group discussions and on-site observation. The HOMER model results show that a hybrid system with a combination of PV array, wind turbine, battery and diesel generator proved the most economically viable option for off-grid electrification. To meet the study village’s daily peak demand of 19.6 kW, the model estimates cost of energy at USD 0.207/kWh and net present cost at USD 82,734. The optimal system allows for a reduction of 37.3 tons of CO2 emissions per year compared with diesel-only electricity generation.

Capacity development

Two capacity building events on energy planning were completed under this project. 

Documents

The role of renewable energy-based off-grid mini-grid systems and service delivery schemes in isolated communities in Ghana

Overview

Research partners: Kumasi Institute of Technology, Energy and Environment (KITE), Ghana

The overall objective of the study is to gather evidence and provide insights as to the extent to which the GEDAP renewable energy-based mini-grid systems have addressed the energy access challenge in 4 communities in Ghana, their reliability and cost-effectiveness and the potential for upscaling.

The specific objectives are:

  • To examine the extent to which the renewable energy based mini-grids have improved access to energy;
  • To examine the reliability and cost-effectiveness in power supply using the renewable-based technologies;
  • To examine carbon savings that are actually being made; and,
  • To propose actionable recommendations, a framework of policies, business models or a scheme to be developed in order to define how renewable energy technologies (RETs) can be effectively incorporated in energy plans of rural communities and local government development plans where these RET potentials are identified. 

Policy Brief and Paper and still to be delivered.

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