Browsing by Subject "universal electrification"

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    Lessons for Modernizing Energy Access Finance, Part 2—Balancing Competition and Subsidy: Assessing Mini-Grid Incentive Programs in Sub-Saharan Africa
    (2020-12-15) Phillips, Jonathan; Attia, Benjamin; Plutshack, Victoria
    Rapid technology development and falling hardware costs have made mini-grids a potentially game-changing platform for enabling universal electrification. With the capacity to power commercial and industrial loads and provide 24/7 service, mini-grids can bring reliable grid-level service to places that are unlikely to be serviced with a stable connection in the near future. Of the roughly 800 million people globally without access to electricity, mini-grids could represent the least-cost option for meeting the electricity needs of 490 million by 2030. In response, governments and development partners are putting in place support programs to accelerate the scale-up of mini-grid deployments. These support programs aim to reduce risk and improve returns for private developers and lower connection costs for rural populations. This policy brief summarizes a review of 20 such mini-grid incentive programs in sub-Saharan Africa, 17 of which are still being implemented. The programs analyzed primarily used one of two mechanisms to stimulate investment: auction programs that invite developers to submit bids for the construction and, in most cases, the operation of mini-grids at specific sites, typically awarding an up-front capital subsidy to the selected developers; and results-based financing (RBF) programs that have a set subsidy per connection that is paid to developers after verification that a household or business has been connected.
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    Profits and Productivity: Stimulating Electricity Demand in Low-Income Settings
    (2019-06-03) Plutshack, Victoria; Phillips, Jonathan
    As electricity companies in low- and middle-income countries move deeper into rural regions, the cost of new connections generally increases while the electricity demanded by these new customers remains lower than urban and peri-urban customers. This is a challenging dynamic for utilities looking to sustain their financial health as well as for governments tasked with engineering viable strategies for achieving universal electrification. Off-grid platforms like solar home systems and minigrids have entered this market, developing innovative approaches to serving these populations that promise to scale up to help meet the needs of the one billion people around the world still lacking electricity access. The creative partnerships and complementary services these off-grid providers are pursuing provide important lessons for larger utilities. Yet the primary driver for new electricity connections—the grid—will continue to play an important role in closing the access gap, especially in places where serving commercial, industrial, and other productive loads is a priority. Countries with national utility companies facing massive debt, stagnant revenue, and overcapacity must develop strategies for maintaining fiscal health, ideally in a manner that facilitates rural income growth and development. This brief provides a snapshot of the relevant demand-stimulating lessons learned in the off-grid space as well as those that have been pursued by governments and utilities in the past order to help answer the critical questions: What is preventing rural customers from increasing their electricity demand? How can governments, utilities, NGOs, and companies come together to foster the greater use of energy services?