Delivering clean and affordable energy to Africa, faster
Currently, nearly 800 million people live without electricity worldwide, most of them in rural areas in sub-Saharan Africa and Asia, where most of the poor also live. One of the factors contributing to this energy inequity is the dependency on outdated approaches to electrification. There is a bias toward traditional centralized power grids, which are not only costly, particularly for remote rural and peri-urban communities, but also provide intermittent and unreliable service where available.
Across 86 countries, the wealthiest 10% of people consume around 20 times more energy than the poorest 10%. In many countries in Sub-Saharan Africa, consumers pay as much as 50 cents per kilowatt-hour against a global average of around 10 cents.
Affordable energy for remote communities
One of the solutions to accelerating the end of these energy inequities has been through Decentralised Renewable Energy (DRE) solutions such as solar, which can help countries expand access to on-site clean, sufficient, affordable, reliable, and sustainable energy.
DRE systems have the potential to address energy inequities by offering customized solutions—in terms of power and cost— to households and businesses. DRE is most suited for places where the grid will not easily or cost-effectively reach the people such as in low-densely populated rural areas, where a majority of those without energy access reside.
An integrated solution to end energy poverty, faster
A recent approach to fast-track access to clean and affordable energy is an integrated energy solution that brings together the competitive advantages of both approaches — the well-developed infrastructure, easy access to long-term, low-cost financing, and existing customer billing and collections systems of the utilities with the low-cost connections, speed and add-on interventions to drive demand such as providing financing, training and bundled services, of the decentralized renewables.
Utilities 2.0 project
A Global coalition of 300 private and public organizations campaigning to deliver universal energy access, Power for All is piloting an integrated energy project in Uganda, the Utilities 2.0 project (also named Twaake, meaning light up in the local Luganda language). It seeks to provide knowledge and evidence on how power utilities and solar off-grid companies can work together to fast-track energy access to unserved communities.
The project has successfully mobilized Uganda’s main electricity supplier, Umeme, to work with off-grid solar energy developers to facilitate faster access to quality, affordable, and reliable electricity to unserved peri-urban communities at a fraction of the cost and also stimulate demand.
Equatorial Power, a mini-grid developer, installed a 40kWp Solar mini-grid system that was commissioned on June 28 2021, and is currently supplying electricity to 380 connections, including households, businesses, and institutions.
Once consumption exceeds the minigrid energy supply, it will be connected to the central grid.
“The site did not have access to power. We brought a minigrid to energize the community. We also brought in companies to empower the community in using the power productively through access to appliance financing. The eventual plan is to interconnect with Umeme. We want to support the utility by connecting it with customers that are ready to use the power through the customer-centric and demand stimulation approach,” says Sumaya Mahomed, Power for All’s lead for the project.
Equatorial Power is, therefore, working with Umeme to ensure the minigrid will seamlessly integrate with the central grid. Umeme provided its metering system and back-end operations for customer billing and revenue collection. It also built the distribution network to maintain the grid standards.
The partners supporting the productive use of energy to stimulate demand include Energrow, an electrical equipment financing startup that is providing financing for productive-use appliances and East African Power, also a renewable energy development company, that has deployed a containerized maize milling and drying equipment that supports agricultural productive use and value addition to the agricultural community of Kiwumu.
Achievements of the project so far
According to data from the pilot’s research, the following have been achieved:
Accelerated pace of access by five years: There are 380 connections at the integrated site in less than one year. The control grid extension site took roughly five years to reach this number of connections.
Accelerated demand: There was a 3000% greater demand at the integrated site (3,125kWh) against the control sites (102kWh) in year one. The integrated energy sites achieved the same consumption as at the control site at a fraction (1/8) of the time.
Reduced connection cost: The integrated energy approach was 11% cheaper than the business as usual grid connection. The customer lifetime value (CLV) was four times higher than grid extension alone.
Faster and cheaper electricity for consumers
The project has led to innovations at both the central and off-grid actors to improve their systems to allow seamless integration and to increase the income levels of customers through the productive use of energy initiatives.
The project has also learned important lessons around regulatory reforms and financing for an integrated approach to fast-track energy access. These include the need for regulatory stakeholders to adopt efficient and standardized processes for site approval and the need to adopt an integrated energy planning approach that accelerates the pace of access.
The project has shown that integrated energy electrification is the least costly for consumers, providers, and governments and allows optimization of resources in efforts to increase energy access to communities across the country.
More resources on the project:
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