Improving Mini-Grids’ Sustainability Via Demand Stimulation
Mini-grid systems are increasingly improving energy access in rural communities across Africa. However, despite their benefits, mini-grids across the continent face several challenges, one of which is sustainability. In many areas, low capacity utilisation means that mini-grid systems are not optimally utilised and are not profitable yet. The electricity demand in many mini-grid communities needs to be sustained to ensure that all the energy produced from the mini-grid system is utilised at all times.
What is Demand Stimulation?
Demand stimulation is a process of actively influencing electricity demand on mini-grid systems, so it tallies electricity generation. The energy demand is relatively low in rural communities compared to peri-urban and urban settlements. Most residents rely solely on agriculture as a means of livelihood and have adapted to living without electric power, making its availability dispensable. Therefore, the onus lies on mini-grid developers to stimulate consumers energy demand in various mini-grid locations.
Mini-grids undoubtedly fill the energy deficit gap in many off-grid communities. Mini-grid developers can play a significant role in stimulating demand by developing their projects in densely populated areas with significant local economic activities to ensure the financial viability of their projects. Developers also stimulate demand by providing appliance financing programmes to boost productive energy use that will stabilise mini-grid load profiles and increase capacity utilisation. However, to close energy access gaps, stakeholders and development organisations have to take a front role in leading the development and sustainability of mini-grids. In addition, mini-grid developers need adequate financial and technical infrastructure to stimulate energy demand to meet the capacity of their systems. This will ensure profitability from a business perspective and affordability and reliability from a customer viewpoint.
Mini-grid operators and developers face several challenges while ensuring demand stimulation. One of such challenges is the lack of adequate finance to procure appliances for consumers. Another challenge is the lack of technical know-how to direct consumers on how best to utilise their appliances. Technological limitation is yet another pressing difficulty posed to mini-grid developers in that there is an absence of adequate resources to gather real-time data to access a communities’ needs, level of economic potential and amount of energy required. The need for demand stimulation is a key component of a mini-grid system; as such, it must be integrated into its design phase. Financiers and development agencies should incorporate demand-side stimulation while considering grants for mini-grid developers. Furthermore, there is a need for capacity building in communities to increase the economic activity of locals to boost productive energy and resource utilisation.
Article authored by Ekene Mekwunye, a Research Analyst for The Electricity Hub. She is an environmental enthusiast, a researcher and an eloquent writer. She graduated top of her class from the University of Benin with a bachelor's degree in Environmental Biology.
Article was originally published on The Electricity Hub