Why Minigrids Are an Effective Solution for Energy Access
Solar PV minigrids are the focus for the AMP because these technologies have emerged as a strong strategic and least-cost option for achieving higher levels of electrification in sub-Saharan Africa. We are now at a tipping point, where, if adequately supported, decentralised energy solutions in general, and minigrids in particular, are poised to be brought to scale. Here are some of the facts:
- If current policies and efforts are not ramped up, only 260 million people are anticipated to be electrified between now and 2030* and an estimated 670 million people will remain without access with 9/10 likely to live in Sub-Saharan Africa.
- Minigrids are a key solution to provide first-time access to electricity for unelectrified populations; and when interconnected to the main grid, they serve to strengthen power systems by increasing reliability, resiliency and renewable energy penetration.
- Half a billion people (490 million) could be connected to minigrids by 2030 – this represents an investment opportunity of USD 127 billion in 217,000 minigrids and could result in 1.2 billion tons of CO2 emissions avoided.**
- Minigrids have the potential to connect 430 million people globally at least cost by 2030 – with an estimated investment of USD 105 billion; most of these new connections are required in Africa, where 380 million people can be connected at least-cost with an estimated investment of USD 91 billion in 160,000 minigrids.***
- Minigrids are extremely efficient, can be built in less than 6 weeks. Can currently operate at as low as 0.38$/kWh. With costs continuing to fall, this is projected to fall to 0.20$/kWh by 2030.
- Globally, cumulative investment to 2021 in minigrids totals $9 billion. This will need to increase to $127 billion by 2030 if minigrids are to realise their potential to benefit 490 million by this date.
- Benefits: 1.2 billion tons of CO2 emissions can be avoided; 200,000 communities can be transformed through reliable electricity including 200,000 schools and clinics and 10 million streetlights.
- Financing for minigrids needs to scale up and the pace of development needs to increase from the current 10-50 to 2,000 minigrids deployed annually per country.****
Sources: *IEA 2021 **ESMAP. 2022. Mini Grids for Half a Billion People: Market Outlook and Handbook for Decision Makers. Washington, DC: World Bank. ***ESMAP. 2022 ****ESMAP. 2022