Regulated kilowatt-hours were historically a low risk and low return business but the global boom in low-cost renewables have turn things around. An estimated 420 million people now use standalone off-grid solar and another 47 million people rely on mini-grids, supplied by decentralized gas gensets and renewables, for access to electricity.
Public-private partnerships have sprung up, such as Konexa in Nigeria or TP Renewable Microgrid in India, and smart subsidy programs such as SMART RBF for mini-grids have evolved as follow-ons to integrated energy access planning.
Combining solar, gas and storage to cut costs
Distributed hybrid plants – mainly solar PV, increasingly combined flexible gas gensets or battery storage – now have highly convincing economics compared with diesel-fuelled plants. Nearly 3.5 GW of renewable of hybrid power units are is operational or under development for powering mining applications, nearly half of which will power mines already off the grid or those looking to improve on unreliable grid power.
“The market for off-grid renewables holds a lot more promise beyond lighting unlit households or reducing costs and fuel variability for remote, diesel-dependent industries,” said senior research analyst Benjamin Attia, suggesting the technology shifts the utility business model towards customer-centricity.
Decentralised power solutions, based on hybrid units are well positioned to displace hundreds of GWs of diesel generation, particularly where off-grid units and incomes are large enough to support modular system upgrades.“The last decade saw the birth of a trillion-dollar market opportunity,” he said, “but the 2020s will reveal the true pace of change.”
Integrating off-grid gensets with centralized plants
Though future grid will be increasingly renewable, low-cost, digitally-managed and eventually demand-following, low energy access countries’ urgent need for large utility-scale generation and grid infrastructure upgrades cannot be overstated. “Therefore, the most game-changing growth factor for the off-grid renewables sector will be centralised and integrated electrification planning,” Attia pointed out.
New tools, based on machine learning, are being developed to estimate least-cost electrification scenarios, map existing grid infrastructure, gauge future electricity demand as well as customers’ willingness to pay for upgrades.