What is Mini Grid
Context:
- A revolution spearheaded by the private sector is in progress to rescue 500 million people from energy poverty. The shift is the result of renewable energy mini-grids, which are powering numerous small companies and homes while also springing up in rural areas of Asia, Africa, Latin America, and the Small Island Developing States.
Mini grid: what is it?
- A mini grid is a collection of electricity producers and perhaps energy storage devices connected to a distribution network that provides power to a specific small client base. It is also occasionally referred to as a “micro grid or isolated grid.”
- They entail the production of tiny amounts of electricity (10 kW to 10 MW) for a restricted number of users through a distribution grid that is self-sufficient and can function independently of national power transmission networks.
The advantages of mini-grids:
- 75 percent of the 675 million people who lack access to electricity globally—the majority of whom are in Sub-Saharan Africa—can now get energy for the first time thanks to privately owned and controlled solar mini-grids. These systems are also the most economically viable and environmentally friendly option.
- 20,000 mini-grids have been erected so far, according to the World Bank, and $220 billion will be needed to establish the 2,10,000 mini-grids needed to meet these targets.
- At a quarter of the cost and with immediate environmental benefits, solar mini-grids are replacing the standard energy source for rural areas, which was once the costly and environmentally harmful diesel generation.
- However, mini-grid firms are also providing a variety of additional services that propel rural development, including as mobile phone, irrigation, agro-processing, and e-mobility, in addition to providing these underserved communities with clean and dependable power.
- In addition, they offer financing and sales of appliances that are not available elsewhere. Put differently, these entities are not just about supplying electricity; rather, they are catalysts for the advancement of rural development.
- In addition to directly supplying high-quality energy services, clean energy can facilitate other means of subsistence and present potential in the fields of agriculture and healthcare.
- Decentralised energy solutions, such as solar mini-grids, are becoming increasingly vital in responding to climate shocks like flooding, heat waves, and drought.
- The ability of mini-grids to adapt and be resilient is essential for farming-dependent rural areas in Asia and Africa, which are the most climate-vulnerable regions in the world.
- Additionally, the mini-grids provide a significant supplement to the centralised grids.
Solar-powered mini-grids in India:
- A small number of private businesses, as opposed to state-sponsored mini-grids, own and run the approximately 700 solar mini-grids in India. These businesses are profitable only from customer payments and are not dependent on government subsidies.
- Due in great part to the effectiveness of these mini-grids, the states of UP, Bihar, and Jharkhand have made significant progress towards a number of sustainable development goals.
- Regulations have been developed in UP and Bihar to facilitate the establishment of mini-grids by private sector entrepreneurs and to give investors a way to see this application favourably.
Obstacles in realising solar energy’s full potential:
- Just 10% of what is needed to get net-zero emissions is now being invested in solar energy worldwide.
- It is noteworthy that just 15% of investments in renewable energy went towards developing nations in 2022, despite the fact that they account for nearly half of all people on Earth.
- Between 2015 and 2021, there was an alarming 44% decrease in renewable energy investments per person in Sub-Saharan Africa.
- This stark discrepancy highlights a major imbalance in the kinds of investments being made, which is further exacerbated by a preference for large-scale solar installations.
How can the investment in solar mini grids be increased?
- Smaller-scale solutions like solar mini-grids have a lot of potential, but they need to be backed up by strong risk underwriting, creative financing structures, and guarantees in order to attract private sector participation. Through its Global Solar Facility (GSF), the International Solar Alliance (ISA) is actively leading such a project.
The next step:
- Solar energy increases security and lessens dependency on fossil fuels while offering a financially feasible route to energy independence.
- Furthermore, the price of solar photovoltaic energy is now quite competitive, coming in at $24/MWh, less than the price of natural gas and coal combined. Of course, this depends on the availability of sunlight.
- The significant decline in solar module prices over the previous ten years highlights the all-around advantages of solar energy investment.
- The future of energy lies in developing a diversified energy mix with sufficient distributed and centralised renewable power. This is especially appropriate in underdeveloped markets where the cost of extending the grid to remote, rural areas is prohibitive.
- Effectively designed and managed solar mini-grids may quickly produce robust and consistent grid-level power, outperforming other electrification methods in terms of both cost and dependability.
- India’s well-received effort shows how innovation may be fostered through private-public sector collaboration, allowing developing economies to attain a trajectory of stable energy supply and low carbon emissions.
Way Forward:
- Mini-grids powered by solar energy can alleviate rural populations’ energy poverty in areas sensitive to climate change. We need to increase our investments in these renewable energy projects.
