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Ghana | May-16 | Off-grid energy opportunities in West Africa

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Presenter: Allwell Nwankwo

Publicado en: Ciencias
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Ghana | May-16 | Off-grid energy opportunities in West Africa

  1. 1. Off-grid energy opportunities in West Africa
  2. 2. LIVING OFF-GRID IEA estimates that 530m Africans will still live off-grid by 2040 although 950m will have gained grid access Sources: Global & Africa data: Off-grid market trends report, 2016 ECOWAS data: based on World Bank electricity access data
  3. 3. Click to edit Master title style ESTIMATED ANNUAL SPEND ON OFF-GRID LIGHTING & PHONE CHARGING (2014, USD BN) Source: Bloomberg New Energy Finance, UNEP, GSMA, World Bank AFRICA Note: mobile phone charging assumption: one weekly charge at $0.15. Technology breakdown is based on UNEP estimates for 2010. Solar lighting expenditure refers to Lighting Global quality-verified products only. 10.8 0.8 0.8 2.0 2.4 0.1 17.0 KeroseneKerosene lamps Battery torches Candles Mobile- phone charging Pico- solar Total People living off-grid spend an estimated USD 17 billion annually on alternative sources of energy
  4. 4. 0 20 40 60 80 100 120 140 160 180 200 Nigeria Ethiopia SouthAfrica Tanzania Kenya Sudan Uganda Ghana Mozambique Madagascar Cameroon Angola Coted'Ivoire Niger BurkinaFaso Malawi Mali Zambia Zimbabwe Senegal Chad <2 2-10 10-20 20-50 >50 Total off-grid populationDaily per capita income in $: ESTIMATED POPULATION BY PER CAPITA INCOME LEVEL (USD/DAY): AFRICA Note: Income levels are expressed in 2011 purchasing power parity dollars. Source: Bloomberg New Energy Finance, World Bank, Pew Research Center The majority of people living off the grid have a daily income of less than $2 A large share of the population with $2-10 daily income is likely to live off- grid
  5. 5. Off-grid opportunity: growing menu of technology and business models for ALL 5  Makes off-grid electricity more attractive and available – both for the poor and better-off households  Overlapping technologies and business models to choose from  Possibility to satisfy varied income levels and geographic/demographic conditions  Makes it easier to climb the energy ladder Device sales (mostly lanterns) PAYG Rent to own… (lanterns/SHS) PAYG fee for service (kits/SHS) Village micro-grids Larger grid-quality mini-grids Grid • Expanding fast • Allows customers to afford higher service level • Scalable business model • Most investment ready
  6. 6. Mapping the Off-Grid Opportunity
  7. 7. Definition of mini-grid 8 For the purposes of this program, the term ‘mini-grid’ is amply defined and includes the following: • A mini-grid is defined here as a small power source that utilizes hydropower, solar photovoltaic, biomass or any other energy source (or a combination of sources, or ‘hybrid)’ that supplies a local distribution grid connected to domestic, business and institutional customers in a defined area • Hybrid mini-grids use multiple generation technologies or resources in order to improve reliability of supply • Mini-grids can be either stand-alone or connected to the grid • Operated by private entities • Other terms that are often used interchangeably with mini-grids include micro- grids, small power producers (SPPs), etc.
  8. 8. ..and to attract the investment required to grow, mini-grids must have certain characteristics… Demonstrated (or believable) profitability Robust business model Experienced team  Steady revenues  Manageable costs  Ability to generate income, without over-reliance on (often unpredictable) subsidies  Understanding of the market  Credible approach to serving customers  Clear strategy for long- term growth  Knowledgeable leaders  Good management with deep sectoral expertise  Well-trained workforce Source: IFC analysis
  9. 9. Capturing the mini-grid opportunity in Africa Source: IFC analysis • Mini-grids are considered to be technically- and commercially viable for high-density populations (>125 people per km2). • In some countries, mini- grids represent a viable option to improve access to electricity. • Most countries have limited access to electricity via the national grid. • Countries face financial limitations to extending the grid • Government and other players need to establish a strong enabling ecosystem to support mini-grid penetration How to help companies to effectively capture mini- grid opportunities in the region?
  10. 10. … joint initiative of IFC and the World Bank to accelerate the development of markets for clean off-grid energy products in sub-Saharan Africa. … mobilizes the private sector to build sustainable markets that will provide millions of people in Africa not connected to grid electricity with clean, affordable, quality lighting products, most of which are solar powered. Lighting Africa
  11. 11. Profitability Break even MaturityProof of conceptBusiness model development 12 CATALYZING MARKET DEVELOPMENT AND TRANSFORMATION, NOT DELIVERING SERVICES Market Intelligence Quality Assurance Business Support Consumer Education Catalyzing Venture Financing Catalyzing mainstream Investment with Financial Institutions Lighting Africa operates along the market transformation curve, focusing on specific market support/development activities Addressing regulatory constraints Technology/Business model advancement Advisory Services Investment
  12. 12. CATEGORIES OF PICO-PV & SHS Category by Power Category by Services Corresponding Energy Access Tier Pico PV < 1.5 Wp “Task Light” Single Light only Systems can provide a person with basic lighting access and contribute to meeting a person & households Tier 1 Electricity Access needs 1.5 – 3 Wp “Area Lighting & Mobile” Single Light & Mobile Charging More powerful systems provide Tier 1 Electricity Access to at least one person and contribute to meeting a households Tier 1 Access 3 – 10 Wp “Solar Lighting System & Mobile” Multiple Light & Mobile Charging Systems provide Tier 1 Electricity Access to more than one person, up to a household SHS 11 – 20 Wp SHS, Entry Level (3-4 lights, mobile charging, radio, fan etc) Systems provide Tier 1 Electricity Access to a household 21 – 49 Wp SHS, Basic capacity (as above, plus power for TV & extended capacity) More powerful systems can provide Tier 2 Electricity Access to a household when coupled with high-efficiency appliances 50 – 100 Wp SHS, Medium capacity (as above, plus extended capacities) Systems provide Tier 2 Electricity Access to a household > 100Wp SHS, Higher capacity (as above, plus extended capacities) Systems provide Tier 2 Electricity Access to a household
  13. 13. ECONOMICS OF PICO-PV Payback period for $13 solar light (in months) Source: Off-grid solar market trends report, 2016 Assumptions – Kerosene is the reference technology. 3.85 hours use per day, at 0.03 litres/hour and latest available kerosene retail prices
  14. 14. A FEW LESSONS LEARNT Quality Assurance: critical to prevent market spoilage. Quality bureaus have a big role. Market Intelligence: need to understand the consumers Consumer Education: helps build awareness, knowledge & adoption Business Development: without deep retail distribution, gains may be lost Access to finance: The entire value chain needs A2F. Work with (M)FIs, Development institutions Policy: Government support to remove barriers, e.g. tariffs, VAT, business bottlenecks Recognition of the potential of the off-grid products to help change lives Off-grid is one of the options – grid & off-grid can be complementary Impact: Off-grid energy products can have a great impact on people’s quality of life (health, savings), business, educational outcomes, social life.