Innovative Public-Private Partnerships Could Help Grow Mini Grid Sector
Did you know that in Africa, 600 million people are still without access to electricity? Distributed energy companies are the answer to the electricity shortage Link, and mini-grids have for a long time been viewed at the key to increasing electricity access. Several barriers remain to accelerating the diffusion of minigrids, one of them being the demand stimulation, where developers often struggle to get enough consumption in their minigrids to support viability.
The AMDA “benchmarking Africa’s minigrids Report” says the average consumption per customer is only 6.1 kWh per month across the continent, and that low consumption makes it difficult to ensure a return on investment or that operational costs are covered. A potential avenue for improving project viability is to bundle in electric mobility services like such as electric two and three wheelers. These will solve two main challenges simultaneously, that is access to reliable transport services in these rural areas as well as improving the business case of minigrids.
Private start-ups and donor agencies have traditionally taken the initiative to reaching out to underserved communities. These start-ups generally do not have the same level of public funding and backing enjoyed by traditional utilities Link. This has helped them develop innovative business models as well as technology platforms in search of financial sustainability Link. Smart partnerships between these start-ups and national utility companies could help unlock this industry.
During an address at the University of Pretoria last week, Eskom CEO, Andre de Ruyter said that “ Eskom will also use microgrids to provide electricity to the 13% of South Africans who are not currently connected to the grid.” Its really good to see a national Utility company such as Eskom prioritising minigrids. “Our pilot micro-grid project has yielded positive results. Electricity is a catalyst for development and dignity – we cannot leave anyone behind” added de Ruyter. Eskom has been piloting a 32 kW/ 90 kWh solar-powered microgrid at Wilhelmina Farm, Ficksburg in the Free State Link. DPA through Ugesi is working on several mini-grid projects in Southern Africa and welcomes Eskom’s initiative on microgrids to electrify the region. Find out more on how you can partner with us at firstname.lastname@example.org or email@example.com!
Time for Kenya firms to seriously consider battery storage for C&I applications
The Kenya electricity market is characterised by an overflow of energy generation. This excess capacity is available throughout the day but is particularly prominent during the night. Kenya’s installed generation capacity is a generation mix with over 93% renewables. It is sitting at over 2 900 MW and now exceeds the current peak demand of approximately 1 900 MW. Demand goes down even further to about 1000 MW at night during the off-peak. This is impressive as some countries in the Southern African region like South Africa, Zambia and Zimbabwe are experiencing deficits at the moment. Kenya’s next task is to extend and rehabilitate its transmission and distribution network.
In a bid to encourage firms to use more electricity at night, the government has implemented a Time of Use (TOU) tariff to encourage heavy industrial users to shift production to the evenings and also to extend operating hours to boost productivity. This lower rate call is in a bid to fully utilise their baseload capacity from Geothermal instead of having to curtail/vent their geothermal power plants. Despite night-time tariffs being up to 50% cheaper than the daytime “High Rate”, only 26% of the 3 120 eligible firms have opted into the TOU program according to the CCI report. This inertia has been attributed to reluctance by the firms to adjust their work schedules.
So where can all this excess and very clean night-time electricity go? Firms can install advanced battery storage systems to tap into this cheaper night-time electricity and use the stored energy during peak times and also to secure daytime power quality and security in the event of voltage fluctuations or power cuts. Prices of Lithium ion batteries have been falling significantly over the past decade and the business case for adding storage is now quite compelling for back up times of up to 2 hours. Electricity tariffs from the local utility can be as high as 23 cents/kWh including levies and taxes while businesses on grid tied solar systems can pay well below 10 cents/kWh for power on PPAs.
Firms are less subjected to prolonged power cuts which is why grid tied systems are now quite popular. DPA’s proposals take into account the daytime “High Rate” utility tariffs and propose that customers offset their energy with grid tied solar for a significant saving. DPA has already installed PV systems coupled with lithium ion storage at several facilities in Kenya including at two health facilities in Mombasa. Switch your business to grid tied solar with storage today on www.dpaafrica.com.