1. Mini-grids and the Arrival of the National Grid
Wisions Webinar:
What if the grid arrives?: How off-grid renewable energy projects have adapted to grid arrival
Good morning, afternoon, evening whatever the case may be.
In many countries, rural electrification is proceeding in a two-pronged approach. On the one hand, off-grid renewable energy projects can provide clean electricity quickly. On the other, the national grid is expanding and the households it reaches often chose grid power because it can power larger appliances and the electricity is often less costly.
How can off-grid and on-grid be harmonized and reduce wasted investment? That’s what we’re going to talk about today.
I’d like to a mention a bit about my background. In my teens and 20s in the 1980s and 90s I worked mostly on household scale renewable installations as a system designer and installer and as an author and illustrator at Home Power magazine. When I was 20 I learned about Ben Linder’s work with community micro-hydropower in Nicaragua, and was inspired by the technology of community mini grids. I volunteered in Ladakh, in northern India for an NGO that was building community micro-hydropower projects, and I was amazed at how a small renewable energy system could power a whole village. So it’s a big honor to be on this forum with Rebecca Leaf who is continuing Ben Linder’s work.
I wrote my PhD dissertation 15 years ago on dozens of community micro-hydro mini-grids in northern Thailand that were being abandoned when – and because of -- the arrival of the national grid. And it was this research that led me to draft regulations that would allow these and other customer-owned renewables to connect to the main grid. The regulations didn’t stop the demise of many of the micro-hydropower projects, but they did enable thousands of MW of renewables connecting to the grid in Thailand.
Chris Greacen
19 April, 2018

2. ESMAP Global Facility on Mini Grids
These days I am working a lot with the World Bank on the ESMAP Global Facility on Mini Grids. We worked with Tanzania’s regulatory authority to a regulatory framework that supports mini grids and grid-connection of mini grids. We work in a number of countries in Africa and Asia to scale up deployment of mini grids through technical assistance, helping governments create regulatory frameworks, and grants and low-interest loans provided to governments.
I wanted to point you to a couple resources that I’ve co-authored that you may find interesting. Both are free downloads.
The one on the left is more broadly about small power producers and mini grids, and has surprisingly ended up as one of the most popular books in the World Bank series with over 20,000 downloads. It’s available in French as well as English. The book on the right focuses specifically on mini grids and the arrival of the grid in three countries – Cambodia, Sri Lanka and Indonesia, that have pioneered different ways of integrating mini grids into the main grid.

3. Off-grid Village scale – Mini grid Household scale - SHS
When we talk about off-grid renewables, we generally mean either mini grids that serve one or more villages, or about household scale solutions like solar home systems and solar lanterns. In my slides I’ll cover mini grids, but I’m glad that Junead Tazdik can speak on the SHS side.

4. Mini grid options after arrival of the main grid
Small Power Distributor (SPD)
Small Power Producer (SPP)
Both SPD and SPP
Separate systems in the same village
Assets abandoned
Buyout by utility
We’ve observed six different possibilities for mini grids when the main grid arrives:

5. Arrival of the main grid
What happens to a mini-grid when the big grid arrives is an issue often raised by developers

6. Small Power Distributor (SPD)
In a small power distributior (SPD), the mini grid abandons its generation assets, but stays in the distribution business – keeping its retail customers and selling electricity it purchases in bulk from the national grid.
Cambodia is probably the biggest example of this. In Cambodia as the main grid expanded and reached mini-grid areas, 250 mini-grids became SPDs. They abandoned their diesel geneartors and purchased electricity (for lower cost than they could generate themselves) from the national utility, for resale to their old customers. In Cambodia, retail tariffs for these distribution franchisees are standardized, and any difference between this tariff and a project-specific cost-reflective tariff calculated by EAC were paid out of a Rural Electrification Fund capitalized by the main utility. This works particularly well for diesel generators where generation costs are high and the diesel generators themselves aren’t worth very much.
SPDs are also found in Nepal, Bangladesh, and Burkina Faso.
Bangladesh rural electric cooperatives, called the Palli Bidyut Samities (PBS).
A national level cooperative Rural Electricity Board (REB) invests in transformers and transmission/distribution lines.

7. Small Power Producer (SPP)
Or, the mini grid can abandon the distribution network, but keep its generation and sell electricity to the national grid at wholesale. This works particularly well for hydropower, which has zero fuel cost and can generate 24/7.
Originally over 250 micro-hydropower mini-grids were built with support from the government of Sri Lanka, the GEF, and the World Bank.
With arrival of the main grid, more than 100 have been abandoned. But three projects have successfully converted to become small power producers. Five more are in the pipeline. These SPPs now only sell electricity to the national grid, and the national grid exclusively services households in the villages.

9. Both SPP and SPD
Or projects can tie onto the grid but keep both generation and their distribution networks. They generate electricity and sell excess to the national grid. And if they don’t have enough, they purchase it from the national grid.
In Indonesia, Of 200 community-owned mini-grids where national grid has arrived, so far 9 have become SPPs, selling all or some of their electricity to national grid.
The 4 MW Mwenga hydropower project does this, sells electricity to 1,500 households and sells electricity to TANESCO. Sometimes it times purchases electricity from TANESCO for retail sale.

10. Co-existence Indonesia
~50 villages mini-grids co-exist selling retail electricity but electrically isolated from PLN
Uttar Pradesh, India
OMC: >50
Mera Gao:

11. Buyout
Should Mini Grid operators be compensated when the main grid arrives?
If so, what portion of their investment should be compensated?
Regulations that are now on the books in Tanzania and Nigeria and, I believe, Sierra Leone, provide for mini grids to be compensated when the main grid arrives. In Tanzania it is only depreciated distribution assets that are built to sufficient standards. In Nigeria it is everything (depreciated generation and distribution assets), plus a years’ worth of revenues. I should note that as far as I know, compensation has not yet happened – these are fairly new regulations.

12. Assets abandoned
Unfortunately, the most common case we’re observing is that the assets are abandoned. Some solar mini grid developers are guarding against this by building their equipment into shipping containers that can easily be picked up and brought to another, more remote village, when the main grid arrives.

13. Thank you http://tiny.cc/GreacenPhD http://tiny.cc/BottomUp