DFID IED presentation 8th November

Green Mini-Grids Africa
Steven Hunt
Energy Advisor
Grid
Perimeter
33 kV
Distribution
Off-Grid
Perimeter
Off-Grid
Perimeter
Biomass
100 kV
Transmission
Stand-alone
Systems
MG
> X pop
Justified by
high
population
Solar/wind
MG
Hydro
MG
Figure 1 : Illustrative view of Grid and Off-Grid perimeters (DFID-IED, 2013)
20% SSA
12% India
SEFA – Universal Energy Access 2030
3
Rural
Electrification
Centralised
Grid-based
Systems
Aggreg.
Connection
Decentralised
Mini-Grids
(Micro - Smart)
Stand-Alone
Individual
Systems
(SHS, BCS, MFP ...)
Fossil fuelbased MG
Hydro
Hybridisation
Biomass
Low-Carbon
or Green
MG
Wind
(One or more
technologies)
Solar
Hybrid
Figure 2 : Rural electrification approaches (IED, 2012)
Figure 12: Payback period of hybrid PV/Diesel in Africa (RLI, Ch. Breyer, 2012)
Progress to date
• Consultation started and IED study started (Nov 12)
• Concept Note approved (Mar 13)
• IED study missions in Ke and Moz (Apr-May)
• Presention at Vienna Energy Forum (May)
• DFID scoping meetings in in Ke and Tz (Jun)
• Detailed Options Assessment Ke + Tz (Oct)
• IED study complete (Nov)
• Business Case development – ongoing
Key issues encountered
• Multiple and context-specific barriers
– By project development stage
– By country
– By technology
– By mini-grid segment:
o100kW – 10MW Grid-Connect or Grid Proximate GMG
o 100kW – 1MW Isolated Mini-Grids
o Less than 100 kW Isolated Micro-Grids
oLess than 5 kW DC-based Pico-Grids
TANZANIA
Developer led
Entrepreneurial
Environment
Develop
technical
concept/
business
plan
Business Plan
Challenge fund
(REACT)
Electrification
plan and
resources
map
Identify
Sites
Electrification
plan and
Resource map
(NORAD/IED)
Clarity of land
ownership
status?
Negotiate with
Community/
offtakers and
landowners
Facilitation,
matchmaking
(REA)
Community led
Availability and
Community
cost of technical
Org./coherence
skills?
Organise
and
identify
GMG need
Get
technical
advice
ENABLING ENVIRONMENT
Availability and
cost of
technical/
financial skills?
Commission or
conduct
detailed
feasibility
study and
design
including
governance,
EIA etc etc
Preliminary
Options
assessment
Credit Ability to
availability, agree
rates,
cost
Availability
tenors reflective of Turnkey
tariff
contractors
(EWURA)
Secure
agreement
from
regulator
on relevant
incentive
and
approvals
Negotiate
with potential
contractors/
develpers
Matching
grants for
Project design
(TEDAP)
Community
Mobilisation
support
Capable/
willing
ministry
and clear
policies
(REA/
EWURA)
Transaction
advisory
Support
(USAID?
SREP?)
Secure
funds to
reach
financial
close on
the
project
Concessional
Credit Line
(TEDAP – but
still a GAP as
will run out and
doesn’t apply
to smaller
grids)
Contract
protection
against Grid
Arrival
Construct
the MiniGrid and
customer
connections
managing
overruns
Market
access for
productive
uses
Operate
and
maintain
the minigrid and
collect
revenues
End-User
Finance?
G’ees on
$500
offtaker
connection default
Incentive
(SREP)
(TEDAP)
SUPPORTING SERVICES/PROGS
KENYA
Developer led
Entrepreneurial
Environment
Develop
technical
concept/
business
plan
Business Plan
Challenge fund
(REACT)
Electrification
plan and
resources
map
Identify
Sites
Electrification
plan and
Resource map
Clarity of land
ownership
status?
Negotiate with
Community/
offtakers and
landowners
Facilitation,
matchmaking
(REA)
Community led
Availability and
Community
cost of technical
Org./coherence
skills?
Organise
and
identify
GMG need
Get
technical
advice
ENABLING ENVIRONMENT
Availability and
cost of
technical/
financial skills?
Commission or
conduct
detailed
feasibility
study and
design
including
governance,
EIA etc etc
Preliminary
Options
assessment
Secure
agreement
from
regulator
on relevant
incentive
and
approvals
Negotiate
with potential
contractors/
develpers
Matching
grants for
Project design
Community
Mobilisation
support
Capable/
willing
ministry
and clear
policies
Transaction
advisory
Support
Contract
protection
against Grid
Arrival
Credit Ability to
availability, agree
rates,
cost
tenors reflective
tariff
Availability
of Turnkey
contractors
Secure
funds to
reach
financial
close on
the
project
Construct
the MiniGrid and
customer
connections
managing
overruns
Concessional
Credit Line
(AFD, not not
for GMG)
Market
access for
productive
uses
Operate
and
maintain
the minigrid and
collect
revenues
End-User
Finance?
G’ees on
Connection offtaker
Incentive
default
SUPPORTING SERVICES/PROGS
Key Programme Elements
DFID
SE4ALL
AU/AfDB
/NEPAD
Regional Green Minigrids Facility
- Preparation, awareness,
research, co-ordination and
cross-learning
Public/MDB
Window
Community
Window
Developer
Window
Financier
Window
MDBs
/IOs etc
Other
donors
Invited PS Green Mini-grids Coand CS reps ord. Group (HIO?)
Ke GMGs Co-ord Group –
REA/MoE, bilats, PS, CS etc
GMGs Kenya
- Critical mass of
investment and
delivery activity on
GMGs
Investment Fund
Prep./Impact Fund
Other
progs
SREP
KEEP
De
AFD
GMGs Tanzania
- Critical mass of
investment and
delivery activity on
GMGs
Investment Fund
(TEDAP/REF)
Prep./Impact Fund
(TEDAP/REF)
Connection
incentive, G‘ees
Next Steps
• Finalisation of country detailed options assessment
• Country fund agreements
• Regional Fund design and agreements
• HIO exploration
• Completion of Economic Appraisal
• Finalisation and submission of Business Case
• Approval and announcement (TBC - April 2014?)