The Rise of Microgrids in Developing Countries

Take a careful look at the snapshot below; it is a typical representation of the settlement pattern in most developing countries. According to the source of this image, the darker shades represent a population density of over 1000 people per square km, down to less than ten people per square km as we move to the lighter shades.

In most instances, the utility systems in these regions were designed to cater to the significantly populated areas. While the remote villages, rural areas are left without electricity facilities.

As these countries develop, there’s now been the need to bridge the gap and provide energy facilities to those less privileged regions. Hence, one of the significant reasons why developing countries adopt microgrid solutions to solve the problem of rural electrification.

Through this article, we’ll take a wholesome look at the major reasons for the rise of microgrids in developing countries. We'd also examine some notable successes of microgrid program in these countries. Let’s dive in.

Why Are Microgrids Gaining Prevalence In Developing Countries?

We started to explain at the introduction: one of the most underlying factors leading to the need for microgrids in most developing countries - population settlement pattern. The rural centres and villages are far from the central grid. If there’ll be an endeavour to extend the network to the remote locations, it’s going to capital intensive and time-consuming.

Microgrids are cost-effective. Instead of investing a massive amount of money on buying transmission and distribution equipment to expand the grid to the remote locations, investing in microgrids will provide electricity to these places at lower costs.

Therefore, developing countries have taken a more economical step in adopting microgrids to provide electricity to their remote centres.

Most microgrid solutions are renewable energy-based: This is another factor that makes the microgrid solution appealing to the developing countries. In a bid to comply with the Paris Agreement and other sustainable climate pacts, microgrid programs are primary channels through which these countries promote clean energy policies.

Some of them provide incentives and remove taxes and dues on renewable energy equipment as a way to keep up to their climate change policies.

Microgrids provide reliable electricity: a common characteristic of the central grid in developing countries is unstable supply. This is due to several factors like shortage of fuel source (for non-renewable), inefficient grid system, over-demand of energy, and even political factors.

These untackled challenges in the developing countries give room for industries, private companies, and communities to create their microgrid solutions, both renewable and non-renewable.

All these factors and many more have favoured the widespread of microgrids among the developing nations. Statistics by the International Energy Agency predicts that there’ll be a tremendous increase in the development of microgrids; by 2040, about 80 million people will have access to electricity through microgrids.

Talking about microgrid projects, according to a report given by Navigant Research, by the second quarter of 2019, there were already 4,475 microgrid projects all over the world. These microgrids sum up to a whopping 27GW of total installed capacity. How much have the developing countries participated in the boom?

Case Studies: Three Notable Microgrid Programs Among Developing Countries

Though Northern America and Asia-pacific regions account for the higher share of the world’s microgrid capacity. The sub-Saharan Africa regions and Southeast Asia are developing their microgrid capacity at an impressive pace. Here are some notable ones that we’d love to appraise.

Bright Indonesia

Indonesia is a country with 34 provinces dispersed over 70,000 islands, with half the population living in the rural regions. Before now, only 66 per cent of Indonesia used to have access to electricity; now, over 88 per cent of Indonesia is electrified. Thanks to programs like Bright Indonesia and other electrifying initiatives, more houses in the remote areas of Indonesia enjoy a stable electricity supply.

The goal of Bright Indonesia is to provide 1GW of electricity to over 12,000 villages where electrification is needed the most by 2019.

Power Africa - Beyond the Grid

With an emphasis on the sub-Saharan region of Africa, Beyond the Grid is an initiative of the United States Government to make 30,000 MW of new and clean electricity available to over 60 million African households in remote and rural regions by 2030. The program has 40 partners all over the world who have committed to invest over $1 billion in providing renewable microgrid solutions for sub-Sahara Africa.

According to the latest report, the program has birth 56 power projects, which are already generating 3,481MW of power connected to 14.8 million homes and businesses across sub-Saharan Africa.

Smart Power India

Launched in 2015 by Rockefeller Foundation, the program aimed to provide renewable microgrid solutions to at least 25 million Indians spread across six states. The foundation invested $20 million to achieve this electrification goal in five years.

In the latest report, Smart Power India had over 160 microgrid solutions spread in four Indian states - Bihar, Uttar Pradesh, Odisha, and Rajasthan. The microgrids were over 80 per cent solar-powered, and their power capacity ranged from 10kW to 70kW. More than 70,000 people in remote areas of India now have access to sustainable electricity.

For millions of lives, the microgrid is more than just a cliche. It is the hope of a household of five, who live in mountainous terrains, where power lines do not reach, to have access to reliable electricity. Yet, there are still hurdles to cross through this mission of making electricity accessible to these regions.

Prospects, Challenges, and Recommendations.

According to a United Nations publication, factors like tariff design, tariff collection mechanisms, maintenance and contractor performance, theft management, demand growth, load limits, and local training and institutionalization still need to be addressed.

A couple of solution providers are already tackling some of these challenges. For instance, we see the PAYGO scheme used in Kenya that allows energy users to make their payment using mobile money solutions. In the light of today’s technology advancement, there are simpler and more efficient systems that we can adapt to cater for these challenges.

As an expert in smart grid solutions, we firmly believe that these local energy communities can be improved by optimizing the microgrids using machine learning and blockchain technologies. The blockchain technology guarantees fair and efficient governance, while smart algorithms provide techno-economic optimization for their participants by lowering their bills and valorizing their assets.

Read our elaborate white paper on Hive Manager - an efficient microgrid management solution.