A revolutionary way of powering Africa is beginning to emerge as the continent appears focused on fulfilling its energy demand through cost-effective means. Mini and off-grid electrification of rural areas is changing the way Africans are accessing electricity.
These solutions are gaining traction as the region, which used to have visions of huge centralized fossil fuel power plants and thousands of kilometers of transmission lines, like the ones developed economies have, is slowly but surely embracing these cost-effective solutions. The reason for this is none other than the draining cost of grid extension.
The cost of grid extension in Africa, especially in sub-Saharan Africa, remains very high, according to the World Bank, where it costs about $15,000 per kilometer just for transmission lines.
Most electricity sectors in Africa can barely cover their operating costs, with little to no prospects in terms of attracting investments. So this adoption is the required step in the right direction.
Historically, electrification of most areas especially in rural areas had always been time-consuming and expensive, making most people lack access to energy.
However, African countries are beginning to take advantage of the overwhelming benefits of off and mini-grids. Nigeria is not being left out as it has rolled out its mini grid policy.
A key reason why Nigeria created a mini grid policy is its large population. The country has the largest population in Africa, 198 million estimated and counting. And all these people require energy.
So, the government put forward a comprehensive mini-grid policy, where the private sector is playing the central role in rural electrification.
Private funded projects are expected to drive these radical changes because they tend to move faster than government-funded projects and are more cost-conscious and effective.
Damilola Ogunbiyi, the managing director of Nigeria’s Rural Electrification Agency added, a believer in this mantra, said: “The power sector in Nigeria should be driven by private funding, innovation, and technology, which can achieve access much faster than the public sector.”
“It needs to be private sector driven access model for Nigeria,” she stressed. Mini and off-grid electrification are the lowest-cost option for providing over 70 percent of the new electricity connections especially in Africa and this means that the people don’t have to wait for the grid to come to them.
Nigerians already spend over $14 billion to generate power through other means, usually generating sets but this could easily be halved if mini and off grids alternatives were provided.
In East Africa, mini-grid activity has taken off really well, particularly Kenya and Tanzania. Tanzania is seeing a sharp increase as businesses are jumping into the mini-grid space, primarily relying on solar energy and utilising mobile payments to collect revenues; the country has been a leader in creating an enabling environment designed to attract mini-grids to the overall energy mix.
In addition, much investment is required. According to a report released last year by the International Energy Agency (IEA), in order to achieve universal electrification, mini and off-grids need $190 billion global investment between now and 2030.