1. Clean Energy Mini-Grids A UNEP Perspective 1 Mark Radka Chief, Energy Branch 7 March 2013

2. Overview 2 1.4billion people with no access to electricity, most living in rural areas 3,000 inhabited islands in Indonesia / Philippines Rapid advances in technology and decrease in costs Abundant renewable energy sources in most developing countries Increasing international interest in the approach  Mini-grids estimated to provide 40% of new capacity by 2030 The potential for mini-grids is large

3. 3 3 Why mini-grids? Utilize local renewable energy resources Typically offer greater levels of energy access compared to simple household PV systems and off-grid lighting devices Provide power for commercial and agricultural applications (not just residential use) Create local jobs Offer health and environmental benefits compared with alternatives Renewable energy mini-grids offer possibilities for improved energy access with environmental and health benefits Source: Lawrence Berkeley National Laboratory, Schatz Energy Research Center at Humboldt University

4. Barriers exist Need for suitable renewable energy resource Higher capital cost Cost of storage Need for back-up power supply? Affordability of the energy service provided (low or erratic customer disposable income) Customer awareness 4

5. Feasibility depends upon many factors Favourable and stable policy framework Tariff sufficient to support re-investment Technology that matches needs Adequate skills and capabilities in the local community Experience of practical implementation 5

6. 6 Requirements from the Public and Private Sectors

7. Viable Business Model - Challenges High up-front costs Long-term revenues Predictability of public funding or support Local management of operations Risks from political/regulatory uncertainty 7

8. Role of the Public Sector Policy framework Tariff structure Guarantees for initial investment Public-private-partnerships Economies of scale 8

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