Page 6 - AsiaElec Week 11

AsiaElec COMMENTARY AsiaElec
Emerging off-grid sector to play key role in achieving universal access
Investment in off-grid energy access between 2010 and 2019 reached $2.1bn, writes Richard Lockhart
GLOBAL
WHAT:
Corporate investment in off-grid reached $2.1bn between 2010 and 2019
WHY:
Projects to connect off- grid customers
WHAT NEXT:
Off-grid and on-grid commercial and industrial projects now offer better investment prospects than traditional regulated coal and gas projects
INVESTMENT in off-grid energy access between 2010 and 2019 reached $2.1bn, con- necting 420mn people to off-grid solar supplies and 47mn to local mini-grids.
Meanwhile, 500MW of commercial and industrial off-grid solar is under development in sub-Saharan Africa, while globally 3.5 GW of green capacity is operational or under devel- opment to power mining projects, according to research from Wood Mackenzie.
This development could pave the way for distributed power to play a crucial role in wider efforts by government and utilities to provide universal access to power in sub-Saharan Africa and Asia by 2030.
Less risk
Investment has picked up since 2016, and is set to increase is the next 10 years. However, total volumes are still expected to fall short of the investment required to achieve universal access to power across the world by 2030, the Wood Mackenzie report warned.
The falling costs of solar, wind and battery storage and the current concerns about invest- ment in fossil fuels mean that off-grid projects now offer less investment risk than before.
Both off-grid and on-grid commercial and industrial projects now offer better investment prospects than traditional regulated coal and gas projects.
“The market for off-grid renewables holds a lot more promise beyond lighting unlit house- holds or reducing costs and fuel variability for remote, diesel-dependent industries; it repre- sents a fundamental and dramatic evolution in the utility business model towards custom- er-centricity,” said Benjamin Attia, Wood Mac- kenzie senior research analyst.
“Off-grid deployments will take an increas- ingly larger bite out of present and future power demand on the grid, particularly where systems and incomes are large enough to support modu- lar system upgrades over time.”
Integrated planning
However, the report warned that off-grid, also known as distributed, projects could not alone offer the scale required to boost industrialisation and economic growth in developing countries, such as in sub-Saharan Africa.
“Therefore the most game-changing growth factor for the off-grid renewables sector will be centralised and integrated electrification
Falling costs of solar, wind and battery storage and the current concerns investment in fossil fuels mean that off-grid projects now offer less investment risk than before
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w w w . N E W S B A S E . c o m Week 11 18•March•2020