Intersolar, Munich, 19 June 2013 - Solarwirtschaft · Source: IREP Project, Tanzania. Page 6...

Challenges in rural electrification

Stefan Opitz, Director for Water, Energy and Transport, GIZ

Intersolar, Munich, 19 June 2013

GIZ - A Brief Overview

� GIZ is active in more than 130 countries worldwide

� Turnover in 2011: 2.03 billion Euros

� Worldwide 17,100 employees (approx. 70 % in the partner countries)

� Status: The GIZ is a private limited company (GmbH) with the Federal Republic of Germany as its sole shareholder

� Main clients of the GIZ are:

� BMZ (Federal Ministry for Economic Cooperation and Development)

� Other German Ministries (BMU, BMWi, AA, etc.)

� Other clients (World Bank, EC, UN, regional banks, governments, private sector)

Stefan Opitz Challenges in Rural Electrification

GIZ - Rural Electrification Sector Portfolio

� Policy & regulation

� Macro-level / multi-stakeholder dialogue, sensitization of policymakers

� Support to formulation and implementation of the regulatory framework

� Capacity Development (for public & private sector)

� Organization development, e.g. supporting energy planning

� Training and know-how transfer for all stakeholders

� Project preparation / implementation & financing

� Support to stakeholders in project preparation and implementation, e.g. regulators, utilities, communities, private sector

� Facilitation of financing, incl. development of incentive schemes

� Sensitization, information & contacts

� Provision and compilation of information, facilitation of contacts


What is Access to Electricity Supply?

Level of Access Peak available capacity Duration of Supply Use of ElectricityPossible Type of

Provision

Tier 5

Tier 4

Tier 3

Tier 2

Tier 1

> 2.000 W

> 2.000 W

> 200 W

> 50 W

> 1 W

> 8h AND

>2h evening supply

> 4h AND

>2h evening supply

> 4h AND

>2h evening supply

Tier 4 AND any high-power

appliances (e.g. air

conditioning, electric cooking)

Tier 3 AND any medium-

power appliances (e.g. water

pump, refrigeration, ironing)

Tier 2 AND any low-power

appliances (e.g. food

processing, washing machine)

General lighting AND

television AND

fan (if needed)

Task lighting AND

phone charging

(OR radio)

Solar Home System,

Mini-Grid / Grid

Solar Home System,

Mini-Grid / Grid

Solar Home System,

Mini-Grid / Grid

Rechargeable Battery, Solar

Home System, Mini-Grid /

Grid

Solar Lantern, Rechargeable

Battery, Solar Home System,

Mini-Grid / Grid


Source: SE4All Global Tracking Framework

> 16h AND

>4h evening supply

> 22h AND

>4h evening supply

� Year 5 after Mini-Grid installation in Tanzania: (representative range of villages)

� Average consumption: 147 kWh per person per year

� Household connection rate: 60%

� Infrastructure connection rate: 90%

� Population growth rate: 3%

� Households specific consumption growth rate: 5%

� Infrastructures specific consumption growth rate: 7%


Socio-economic impacts from electrification via Mini-Grids

Source: IREP Project, Tanzania

On-going and planned GIZ projects on Rural Electrification

Pico-PV, Solar Home Systems Mini-Grids

BangladeshBoliviaBurundiEthiopiaHondurasKenyaMaliMozambiqueNicaraguaPeruSenegalUganda

AfghanistanBenin

BoliviaGhana

HondurasIndia

IndonesiaKenya (in planning)

MadagascarMozambique

NepalNigeria

NicaraguaPakistan

PeruPhilippines

RwandaSenegal

Tanzania (in planning)

Uganda


Example I: Energising Development (EnDev) Peru

� Objective: Sustainable Access to Modern Energy Products and Services

� Financing: EnDev

� Partner: Ministry of Energy and Mines, regional governments, private companies

� Achievements:

� 414 pico PV systems for households were installed

� 30 SHS for households and one SHS for a social institution were installed

� Training courses for local technicians on installation and maintenance of SHS was developed


Example II: Senegalese-German program PERACOD

� Objective: 80% of the SN population have no access to electricity � improve access, involve private sector

� Financing: BMZ & EnDev

� Partners: Senegalese Rural Electrification Agency (ASER), Electricity Regulatory Commission (CRSE), private operators (INENSUS West Africa, EnergieER, etc.)

� Achievements:

� 18 mini-grids operational; further 50 in implementation

� Improvement of the regulatory framework for private operators

� PPP with Inensus West Africa piloting Micro Power Economy Model with smart pre-paid meters


Example III: Kenyan-German cooperation on PV-Hybrid Mini-grids (Deutsche Klimatechnologieinitiative)

� Objective: Provide access to rural households in Northern Kenya

� Financing: BMZ

� Partners: Kenyan Rural Electrification Authority (REA), Ministry of Energy (MoE), Energy Regulatory Commission (ERC)

� Envisaged activities (starting Q4 2013):

� Greenfield PV hybrid mini-grid pilot projects

� Support the enhancement of rural electrification policy

� Mechanisms for off-grid rural electrification (tendering, private sector participation)

� Strengthening the capacities of the local private sector for off-grid electrification


Challenges in Pico PV & Solar Home Systems

� Typical income per household in East Africa: $500 per year

� Money spent on lighting services: $6-$15 per month

� Expenditure on lighting about 25% of monthly income

� High-upfront cost require long-term financial planning

� From selling products to selling services, e.g. Leasing (Mobisol), Charge Payments (Solar Kiosk)

� Poor system design and installations brought miscredit to solar energy

� PV installations in remote villages with no after-sales service providers

� Trained local partners & service provider network


Challenges in Mini-Grids (I)

� Utility model (public procurement)

� Requires capable utility

� Technically sound tender documentation � quality and sustainability

� Transparent and integer tender process

� Can attract only public financing (!)

� Private operator model

� Requires a sound policy framework: cost-covering tariffs, permits, concessions

� Bankability is an issue: anchor customers with predictable load & revenue

� Hybrid model (e.g. outsourcing of generation to an IPP)

� Bankable projects require solid standardized PPA’s � guaranteed tariff over a long time period (!)

� Tariff setting is a critical factor � avoided-cost methodology vs. technology specific tariffs


Challenges in Mini-Grids (II)

� PV hybridization of existing diesel grids

� Diesel generators in publicly owned mini-grids usually highly oversized in relation to demand � incorporating PV is often limited

� Solar Mini-Grids

� Transition from a demand-driven diesel mini-grids to supply-driven PV Mini-Grids � active demand shifting (e.g. load limiters) vs. indirect demand shifting (e.g. corresponding tariffs)

� High transaction costs

� Different policy framework conditions in every country

� Lack of market information and collected data in rural load locations

� Tendering of small capacities in public procurement


Quo Vadis Mini-Grids?

Business Model When? Market Potential Example country

Public procurement

Fully private schemes

IPP‘s for rural power

generation

now

medium-term

short- / medium-term +++

Kenya

Senegal

Tanzania

+??

++

Countries with high

diesel prices+++now

Industrial consumers

(e.g. Mining)


GIZ Portfolio - Cooperation with the Private Sector

� Sponsoring und equipment provisions

� Cooperation with German associations

� EZ scouts

� Bilateral energy partnerships

� Integrated development partnerships

� develoPPP.de Competition of ideas

� develoPPP.de Strategic alliances

� Project development programmes

� Technology supportprogrammes

Sponsoring and

equipment

provisions

Multi-

stakeholder

dialogue and

networks

Development

partnerships

with the

private sector

Market

development

and

penetration


Thank you for your attention!

Contact

Stefan [email protected]


Intersolar, Munich, 19 June 2013 - Solarwirtschaft · Source: IREP Project, Tanzania. Page 6...

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