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Supportive framework conditions for green mini-grids

Supportive framework conditions for green mini-grids

State 

completed

Date 

1 January, 2013 to 31 March, 2014

Country 

South Africa

Region 

Southern Africa

Summary

This type of activity was part of the RECP start-up phase and is now being offered under the Service Line SEADS.

The SADC region of Africa faces major challenges in improving access to modern energy services. Overall household access to electricity in SADC remains persistently low, apart from South Africa — as low as 14% in some member states. More critically, the electrification rate for rural households is as low as 3-4% in several countries, and only three countries have rural connection rates higher than 50%. 

Many rural communities will remain unconnected to the national electricity grid for the foreseeable future. To meet the access targets set by the SADC Ministers of Energy, there is a need to accelerate the development of mini-grids to serve these remote centres. There is also a significant opportunity to further the SADC goal of increasing the role of renewable energy in electricity generation through orienting the minigrids to renewable energy as a sole source or as a complement to thermal generation.

The immediate objective of the project was to provide the policy and regulatory tools for creating supportive framework conditions to foster the development of mini-grids in the SADC Region. The expected project outcome is to stimulate increased access to modern energy and distributed renewable generation capacity.

The main activities of the project were:

  • assessment of the current status of policy and regulation regarding mini-grids
  • provision of a framework to attract investment into mini-grids in the SADC region
  • country studies (in Zimbabwe and Namibia) – for both countries identification of gaps in the mini-grid framework and drafting of a National Action Plan were undertaken, in close consultation with national stakeholders
  • training in the use of the quantitative (tariff) tools developed during the project.

The project produced outputs which are categorized as follows:

  • reports – Including information on existing mini-grids and regulatory frameworks and a final report providing an overview of the support framework developed
  • guidelines on the four main dimensions of the mini-grids support framework: 1) Market needs and demand 2) Technology choice & technical regulation 3) Ownership, financing & economic regulation 4) Planning & development process and role clarity 
  • legal templates – Generation Licence, Distribution Licence and Power Purchase Agreement templates
  • tariff models – Retail Tariff Tool, Power Purchase Tool & Feed In Tariff Tool and
  • country case studies on Zimbabwe and Namibia including Gap Analysis and Action Plans.

EUEI PDF has received positive feedback about the tools, which are publicly available on the website for downloading. During its 34th meeting on 24th of July 2015, the energy ministers of the South African Development Community (SADC) endorsed the outputs of the work on framework conditions for green mini-grids, done by SADC’s Regional Electricity Regulators’ Association (RERA) and the RECP, and obliged member states to report on their national implementation on an annual basis. Furthermore, the energy ministers pledged to install additional 24GW of capacity by 2019, 70% of which is expected to come from renewable energy sources.

In addition, the work under this project has fed into the development of the Mini-Grid Policy Toolkit. Namibia and Zimbabwe, the two countries where the case studies were implemented, subsequent activities have followed. EUEI PDF may, upon request, consider assisting other countries with analyses of gaps in their mini-grid support frameworks and formulation of National Action Plans to address those gaps.

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