Page 4 - AsiaElec Week 30

AsiaElec COMMENTARY AsiaElec
Mini-grids offer minimum costs
and maximum economic impact
in Asia and Africa
The falling costs of solar technology and high levels of economic impact make mini-grids a key tool in achieving universal access to power by 2030. Africa and Asia are key areas for development, writes Richard Lockhart
GLOBAL
WHAT:
The World Bank research calls for $220bn of private and public investment in mini-grids to achieve universal power access by 2030.
WHY:
Mini-grids take advantage of falling solar costs and offer the maximum economic impact in the poorest areas of Africa and Asia.
WHAT NEXT:
The bank wants technical and regulatory improvements to drive the cost of mini-grid power down to $0.20 per kWh.
A recent World Bank report has found that fall- ing costs make mini-grids one of the most e ec- tive methods of providing universal access to power in Africa and Asia by 2030.
e falling costs of solar panels and battery storage mean that mini-grid capital require- ments in Africa have declined by over 50% in the last eight years, the report said.
Total investment of $220bn from private and public sources is now needed to nance up to 210,000 new mini-grids worldwide, it found. New funding options are needed, as well as sup- portive regulatory regimes and attractive invest- ment environments in Africa and Asia in order to reduce the current levels of risk involved in investing in small-scale projects.
Africa and Asia are the major regions where mini-grids can have the greatest impact in con- necting people to power supplies, which in turn boost economic development and help Afri- can and Asian countries meet their sustainable development goals.
Access to power
e report noted mini-grids have the potential to give 490 million people access to power by 2030 via 210,000 new projects at an investment cost of $220bn, mainly in sub-Saharan Africa and in Asia’s developing countries.
“The costs of key mini-grid components, such as solar panels, inverters, batteries and smart meters, have decreased by 62%-85% as a result of innovations and economies of scale in utility-scale solar projects, the booming roo op solar industry and the growing electric vehicle [EV] market,” the report said.
e bank said that implementing a range of mechanisms from regulatory support to enough private investment would reduce the cost of unsubsidised solar-hybrid mini-grid electricity, known as the levelised cost of energy (LCOE),
to $0.20 per kWh by 2030 from $0.55 per kWh today.
is would make it competitive with current utility-supplied power, which the report puts at $0.27 per kWh. Most African and Asian coun- tries subsidise tari s in some way at present.
Falling costs
e falling cost of solar and battery technology is the key driver of the World Bank’s nding and its current commitments to provide $660mn of support for mini-grids in 33 countries until 2025.
A separate recent report on 2018 green investment from the United Nations noted decreasing solar costs, as well as the slowdown in solar deployment in China, had actually pushed down total investment volumes in renewables.
Global investment in renewable energy hit $288.9bn 2018, 11% less than in 2017. Solar accounted for $139.7bn, down 22%.
Crucially, investment in Asia excluding China and India rose 6% to $44.2bn, while the Middle East and Africa saw it soar by 57% to $15.4bn.
“When overall investment falls, it is easy to think we are moving backwards, but that is not the case,” Angus McCrone, chief editor at BloombergNEF, which collaborated on the UN’s Renewables 2019 Global Status Report.
“Renewable energy is getting less expensive and we are seeing a broadening of investment activity in wind and solar to more countries in Asia, Eastern Europe, and the Middle East and Africa,” he added.
Investment example
Mini-grids o er smaller operators and niche and boutique nanciers scope to drive projects for- ward. In Kenya, pay-as-you-go power provider
The costs of
key mini-grid
components
such as solar
panels, inverters,
batteries and
smart meters
have decreased
by 62%-85%.
World Bank
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w w w . N E W S B A S E . c o m Week 30 30•July•2019