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Microgrids to benefit from standardisation

By Dr Sam Duby, Africa Director at TFE Energy

The African microgrid industry has experienced a long-awaited breakthrough. This development might prove to be one of the most important levers to remove some of the stubborn barriers preventing this industry from reaching the scale it needs to connect the one billion people still living without electricity worldwide.

This article first appeared in ESI Africa Edition 2, 2019. You can read the magazine’s articles here or subscribe here to receive a print copy.

A group of industry leading practitioners, progressive donors, international think tanks and sector associations came together in Nairobi in February this year to lay the foundations of a framework to pool and share technical and financial microgrid data.

It took several generations to completely electrify most developed nations. In Africa, the race is on to accomplish it considerably faster. Despite the mounting evidence that access to energy is a prerequisite to development (enshrined in Sustainable Development Goal 7), electrification rates in most African countries languish at a paltry 42% with some of the more fragile nations suffering from less than 10% electrification. Meanwhile the costs of renewable energy technologies continue to plummet and the death rattles of large, centralised utilities such as South Africa’s Eskom continue to plague economic outlooks and general productivity.

Into the ring steps the microgrid (aka mini-grid); a digitally enabled village scale (usually renewable energy based) power station that promises access to clean, affordable and modern energy services in even the hardest to reach corners of the world. These decentralised nodes of energy supply and consumption usually offer their customers services that far exceed those available from the national grid (where available) in quality and reliability and hint at a possible ‘grid of the future’ that, in the wordsof Sam Slaughter from PowerGen, can “be built from the outside in”. This mesh-of-nodes is a vision that is relevant across the globe, providing energy security and resilience, and reducing the burden on national infrastructure.

The microgrid is not a new concept with more than 2,000 built across Africa to date. The major issue now, is how to get the industry to scale and begin to address the staggering deficit in rural energy connections that are capable of supporting productive uses of power (those that can generate income and/or contribute to the local economy). Major barriers in the way include uncertain national policy designed around loss-making, subsidised national utilities, a lack of appropriate funding mechanisms, an often inexperienced domestic private sector and underwhelming coordination from donors.

One approach gathering momentum as a means to cut through the barriers is increased standardisation. Although this may not sound like the most exciting, Indiana Jones approach to a problem, increased standardisation addresses many of the key challenges. Transparent and standardised financial reporting supports investor confidence and allows individual projects to be aggregated into portfolios with ticket sizes large enough to be considered by deeper-pocketed, long term focused investors.

Standard designs, best-practice support and collective purchasing bring down the costs of projects and give smaller, local developers a much needed leg-up. Shared performance metrics give the nascent industry valuable advocacy ammunition and the chance to demonstrate that microgrids are almost certainly the best way to provide productive amounts of power to settlements outside the reach of the national grid. Standardised collection of data permits cross-developer and cross-country studies of the industry to improve the development and sharing of knowledge and improve sector performance.

The Nairobi workshop was convened to discuss how the industry could take a step towards increased standardisation around monitoring, evaluation and data sharing without stifling innovation or adding unnecessary burden to already stretched microgrid developers. This provided an unprecedented opportunity to determine the ‘state of the sector’ and make sure the voices from all interest groups were represented. This last piece is key because while each group has its own interests and incentives, any efforts towards standardisation are useless without broad consensus and buy-in.

There were two major outputs from this exercise. The first was the definition of three distinct classes of data; financial, technical, and socioeconomic impact metrics. The second was the articulation of which of the metrics within these were both easy to report and non-contentious and which were the opposite. The clarification of the latter spawned the formation of a steering group to work towards agreed definitions and methods of calculation. The clear definition of the former provided what we were all hoping for; a foundation from which to build a widely accepted framework for standardised data sharing and M&E across the microgrid industry.

Apart from basic information such as the location and size of each microgrid, some of the agreed metrics include technical data such as details on the installed equipment and distribution infrastructure as well as financial metrics such as ARPU (average revenue per user) and detailed CAPEX and OPEX. While there is an agreed upon standard for reporting these metrics, which will allow ‘apples to apples comparison’ of projects, it is important to note that not all of this information will be available to the general public for obvious commercial reasons. Usefully, the emergence of the supplier agnostic online data platform,

Odyssey, allows the hosting and integration of many of these efforts within a secure and credible framework. This is a huge step forward and already will be of value to almost all stakeholders working on microgrids. Notable metrics put into the ‘to-be-worked-upon’ box include how to determine service level (through measurements of outages and power quality) and the social impact metrics, which, despite being somewhat harder to pin down, are fundamentally important metrics for many of those needing to justify how and why they are investing much needed money into the sector.

This work will be published in more detail in an upcoming whitepaper, which is a clear indication of the maturation of an industry that is set to benefit lives in countless under-served communities, now and far into the future. Watch this space. ESI

This article first appeared in ESI Africa Edition 2, 2019. You can read the magazine’s articles here or subscribe here to receive a print copy.

Meet with Dr Sam Dudly at the Energy Revolution Africa session taking place on 14-16 May at the African Utility Week and POWERGEN Africa conference.

www.african-utility-week.com | www.powergenafrica.com | gary.meyer@spintelligent.com | #AUW2019 #PGAF19

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