RURAL ELECTRIFICATION WITH RENEWABLE ENERGY Technologies, quality standards and business models 1 1 Alliance for Rural Electrification | Renewable Energy House | Rue d’Arlon 63-65 | 1040 Brussels | Belgium Tel. +32 2 400 10 52 | E-mail: [email protected] | www.ruralelec.org CONTENTS Introduction 5 SECTION 3 21 SECTION 5 35 SMALL HYDROPOWER ELECTRICITY HOME SYSTEMS SECTION 1 8 OR MINI-GRIDS? THE STAND-ALONE Technology overview 22 PHOTOVOLTAICS FAMILY Another potential solution: Site location and installation 23 Energy container and Energy kiosk 37 Technology overview 9 Costs calculations and case study PicoPV Systems (PPS) 9 for small hydropower systems 24 SECTION 6 38 Classical Solar Home Systems (SHS) 10 BASIC RECOMMENDATIONS FOR THE Solar Residential Systems (SRS) 10 International quality standards for small hydropower systems 25 OPERATION AND MAINTENANCE OF System components and COMPONENTS IN OFF-GRID RENEWABLE ENERGY SYSTEMS maintenance of standalone SECTION 4 26 PV systems 11 MINI-GRIDS Solar module 39 Business models and case study (FED BY HYBRID POWER SYSTEMS) for standalone PV Systems 12 Small wind turbine 39 Introduction 27 International quality standards Charge controllers 40 for small standalone systems 16 Technology overview 28 Lead-acid battery 40 Technological configurations 28 SECTION 2 17 Battery inverters 40 SMALL WIND HOME SYSTEMS Costs, business model and Loads (appliances) 41 case study for hybrid Technology overview 18 mini-grid power systems 30 Small hydropower system 41 Life-cycle cost perspective 30 International quality standards O&M and financial schemes 30 SECTION 7 42 for small wind systems 20 THE FUTURE OF DECENTRALISED International quality standards for ENERGY SOLUTIONS hybrid power systems with mini-grids 34 Energy efficiency and demand side management 43 Technological progress and decreasing generation costs 44 Technology manufacturing prices 44 Innovative storage technologies 45 ANNEXES 49-55 Rural Electrification with Renewable Energy: Technologies, quality standards and business models 4 INTRODUCTION According to the International Energy Agency global environmental sustainability (MDG7). Ener- (IEA)1, there was in 2008 an estimated 1.5 billion gy alone is not sufficient to alleviate poverty, but it is people, or 22% of the world’s population, living certainly necessary and there will not be any major without access to electricity, 85% of whom live in development progress without a growing number of rural areas. The IEA foresees that if current policies people gaining sustainable access. On the contrary: do not change, by 2030 there will still be 1.2 billion the energy disparity between countries or regions people without access to electricity. The number only increases the problems, adding new issues to of people without electricity will even rise in Sub- the existing ones (e.g. rural exodus). Saharan Africa. There are three basic technical approaches to bring- 5 Such an energy outlook for the poor is unaccepta- ing electricity to remote areas: ble. It is possible to achieve universal access in the A first option is simply to extend the national foreseeable future, and modern renewable energy electricity grid. In many countries however, ex- technologies (RETs) can play a crucial role in tending the national grid can be extremely costly achieving this goal. However, technology alone is (according to the World Bank, grid extension not enough and universal access requires sustaina- prices vary from $6,340/Km in densely populated ble operation and business models, political efforts country such as Bangladesh to $19,070/Km in and targeted public support. 3 countries like Mali ). Rural areas are normally The role of energy, and more specifically electricity, located far away from what is often a very small is critical for development. Access to modern energy national grid; therefore the high cost of extending reduces hunger and improves access to safe drink- the transmission lines usually makes these projects ing water through food preservation and pumping unfeasible. The difficult terrain in many rural re- system (MDG1)2. It fosters education by providing gions also increases expansion costs significantly. light and communication tools (MDG2), it im- Mountainous or forest areas for instance, with dif- proves gender equality by relieving women of fuel ficult access for machinery, require more time and and water collecting tasks (MDG3), it reduces child resources to install transmission lines. and maternal mortality as well as the incidences of A third factor - the size of the demand - deter- disease by enabling refrigeration of medication as mines the cost per kWh of grid extension. A critical well as access to modern equipment. It also helps to mass is necessary for a project to be viable. Rural fight pandemics like HIV (MDG4, 5, 6). Finally, if areas are vast and have a relatively small energy access to energy is implemented with environmen- demand per connection, so for public authorities tally sound technologies, it directly contributes to or impoverished utilities, the economic interest to 1 http://www.worldenergyoutlook.org/database_electricity/electricity_ connect them to the grid is very small. Furthermore, access_database.htm 2 Millennium Development Goal 3 “Reducing the Cost of Grid Extension for Rural Electrification”, ESMAP (2000) the electricity provided by utilities in developing A third option is based on electricity mini- countries often lacks security of supply and quality. grids4, which can provide electricity generation Consumers may only have access to the electric- at the local level, using village-wide distribution ity during limited hours each day and blackouts or networks. Mini-grids provide capacity for both brownouts are common. Grid extension increases domestic appliances and local businesses, and have the demand, but if there is not a consequent increase the potential to become one of the most power- in the energy generation capacity, adding new con- ful technological approaches for accelerated rural sumers will only aggravate the situation and reduce electrification. They can be powered by fossil fuel the quality of service. (mostly diesel), but they can also easily utilise lo- cal renewable energy resources. Many locations, The second approach is through Electricity Home especially in developing nations, offer excellent Systems (EHS). These small power systems are natural conditions for the use of solar photovoltaic, designed to power individual households or small wind, or small hydro power. Diesel gensets remain buildings and provide an easily accessible, relatively the most used technology because it used to be inexpensive, and simple to maintain solution. The the cheapest option and it requires rather modest dispersed character of rural settlements is an ideal initial investments. However, nowadays renewable setting for these solutions, in particular with renew- energies present numerous competitive advantages, able energies (RE) that are especially competitive including lower levelised costs5. in remote areas. Pico PV system (PPS), solar home systems (SHS), small hydro plants (SHP), or wind Besides the Alliance for Rural Electrification home systems (WHS) almost always offer a solu- (ARE), many recognized institutions have already tion for providing electricity to isolated places. In stated that decentralised renewables will impose 6 these stand-alone systems, power generation is themselves as mainstream technologies in the years installed close to the load and there are no trans- to come. According to IEA/UNDP and UNIDO, mission and distribution costs. Moreover, to keep universal access by 2030 will require 379 TWh of prices affordable, components can be minimised grid electricity, 399 TWh for mini-grids and 171 and capacities maintained low mainly serving small for off-grid. These organisations also reiterate that DC appliances for lighting and communication. the Millennium Development Goals cannot be However, capacities and potential are very different achieved unless substantial progress in developing between the different EHS. alternative sources of energy, and especially off-grid renewables, is made. In the short to medium-term, renewables are not only going to become a main- stream solution, but they are also going to massively contribute to local economic development. Technologies, quality and business models standards Technologies, 4 Sometimes referred to as isolated grids Rural Electrification with Renewable Energy: 5 See “Lifecycle analysis” in section 4 Mini grids ARE is the only renewable energy industry associa- studies. In addition, this publication discusses some tion in the world exclusively working for the ad- key technological questions for RETs and their vancement of renewable energy markets in develop- future in developing countries. More detailed and ing countries. It represents companies, organisations technical issues such as storage and international and research institutions active in the renewable quality standards, will be discussed in the annexes. energy business who believe in the growth potential If many RET projects have failed in the past, it of developing countries and want to make a differ- is mostly due to poor project management and ence. ARE positions itself in the heart of the global inadequately designed programs, lack of qualified dialogue on RE and energy access, and exchanges technical assistance and engineering, or the quality with governments, international organisations, de- of some components. This publication