The rise of hybrid micro-grids in Africa are challenging the dominance of diesel generators being used to generate power in remote regions. Hybrid micro-grids are power centers intended to supply a small number of homes and/or business operations, and they use a mix of energy tech, including solar power and wind power, to either reduce the dependence on diesel, or, in some cases, eliminate it altogether.
Here is more on the rise of these hybrid micro-grids from ESi Africa
Many types of hybrid micro-grids exist, including those that rely primarily on diesel as well as those that are purely renewable, such as micro-hydro and solar or biomass and solar. But as the price of solar panels continues to fall, the most common hybrid combination so far has been pairing diesel with solar, and this solution – ‘solar hybridisation’ – is gaining traction in many emerging markets.
In India, for example, where the country’s telecom networks burn billions of litres of diesel every year in backup generators to deliver 24/7 up-time amid frequent grid failure, micro-grid companies such as OMC are building their business on the back of an ‘ABC’ business model – Anchor telecom tower tenants (A), Business (B) and Community (C).
Such companies are relying on solar with battery storage as primary power, with diesel as back-up. With mobile penetration in sub-Saharan Africa at 80% and mobile money becoming common among decentralised renewable energy customers, this ‘tower power’ business model could be a fit for Africa as well, at least for telecom towers that are near rural communities.
“We believe our ABC model is viable in Africa too, and have been monitoring the market for some time for a possible future market entry,” said OMC’s head of corporate finance, Andreas Dahl-Jorgensen.
Others are already moving in. Both large and small players are entering the hybrid market in Africa, targeting not only telecom towers, but also rural communities (both residential customers and micro-businesses), industrial facilities and remote mining operations.
Meanwhile, Enel is partnering with Powerhive to develop and operate micro-grids in 100 villages in Kenya. Gamesa, meanwhile, is exploring a hybrid micro-grid that centres around wind turbines, and also includes solar, diesel and storage, expecting the integrated solution to reduce diesel consumption between 15 and 35%, or even more.
“Solar PV plus storage with a diesel generator as backup is the optimal configuration for many African applications since the OPEX costs of fuel supply and delivery are so high in some areas,” said Sam Slaughter, CEO of PowerGen Renewable Energy, a micro-grid company in Kenya. “As and if storage continues to get cheaper, the argument for less and less diesel usage can and should be made.”
Hybridised systems have found an initial market in the mining industry, where solar PV has shown an ability to reduce the costs of operation. Thaba chromium mine in Limpopo, South Africa, provides a case in point. In 2012, the high costs of fuel led operators to integrate 1MW of PV into its captive power system, cutting its diesel bill by half a million dollars. In Australia, mining giant Rio Tinto has set its sights on integrating PV into a mini-grid system powering one of its remote bauxite mines, gradually scaling from 1.7MW to 6.7MW under a 20 year power purchase agreement.
According to Slaughter and others in the industry, however, projects such as mines are less attractive to hybrid diesel-solar systems than community oriented projects. First, there are not enough mines that fit the right profile and the ones that do tend to have grid power, with their main pain point being grid intermittency.