Increasing the viability of solar minigrids in rural areas

The graduates of our MSc in Sustainable Energy Futures go many places and study many things. Noah, from our 17/18 cohort has written us this great blog post on the research he did as part of his thesis.

An investigation of the potential for Demand Side Management in a solar minigrid in Rwanda

Over one billion people still have no access to modern energy, the majority of whom live in rural areas in Sub-Saharan Africa where incomes are significantly lower, terrains are difficult, and infrastructure is lacking. Minigrids, particularly those based on solar energy, are predicted to be a key solution to reducing this number. However, due to the low demand and incomes in most rural areas, many minigrid investments are not economically viable.

What measures can be put in place to make rural minigrids more viable?

To increase the viability of minigrids, innovative business models capable of stimulating energy demand are required. Energy use in most rural areas is largely dominated by domestic uses, with little energy being used for productive economic activities.

A customer installing a ReadyPay Solar Home System (SHS) -Photo by Fenix International
A customer installing a ReadyPay Solar Home System (SHS) -Photo by Fenix International

However, while the benefit of improved basic lighting and cooking methods in households is not inconsequential, it is essential that productive uses are incorporated in order to enjoy the full economic benefits of modern energy.

The promotion of the so-called productive uses including agricultural loads like irrigation and milling, as well as small scale industries, can create anchor loads that should increase the demand to a level beyond what typical rural households usually consume, as well as improving rural incomes in a virtuous cycle.

A virtuous cycle around improved energy access, investment in productive uses of energy, increased productivity, increased energy demand, increased revenue

Overview of the solution being implemented in Rwanda.

Map of RwandaRwanda has one of the highest population densities in Sub-Saharan Africa, a key factor favouring the proliferation of solar mini grids in the country. However, most of the population lives in rural areas and is reliant on primary agriculture. As a result, the poverty rate is high at 43.7%. In order to improve this situation, Energy 4 Impact (E4I), a global NGO is partnering with minigrid operators to provide improved energy for productive uses.

MeshPower is one of these companies, and they have commissioned a solar mini-grid to provide electricity in the rural village of Gitaraga, with E4I working with the rural entrepreneurs to develop their businesses and enable them to consume more energy.

What are the issues with solar minigrids when implementing productive uses?

However, solar minigrids in rural areas in particular also suffer from an added complication that while most production is during the day, demand is largely at night. While it is expected that productive uses occur during the day, and should therefore match demand with supply, it was observed on the MeshPower grid that a significant portion of demand still occurs after sundown, necessitating an extra investment in storage to achieve the same reliability as other technologies.

A load profile with productive uses (BLUE), shown against the expected solar generation (RED)
A load profile with productive uses (BLUE), shown against the expected solar generation (RED)

Can Demand Side Management be the solution? What are the key question?

As illustrated in the figure above, Meshpower desires to shift as much of the evening demand as possible to coincide with solar generation through Demand Side Management (DSM), thereby reducing the battery storage requirements. In this regard, the company offers a Time-of-Use tariff where the evening tariff is higher than the day tariff, in order to encourage more usage during the day.

The aim of this research was to therefore establish what the potential for this DSM mechanism was. The key questions to be answered were the following:

  • What are the current energy appliances in use, and how much energy do they consume?
  • At what time are these appliances used?
  • Can this demand be shifted across time?
  • At what cost to the user and the supplier?
  • What will the benefits be? And what are the barriers?

Answers to these questions would then determine whether tariffs could be effective as a DSM technique, and if not, suggest alternative methods. In addition, it was important to establish the practical potential for shifting demand across time in this setting, as well as the expected savings on system design.

Establishing the techno-economic potential of DSM in MeshPower mini-grid

Over a two-week field trip to Rwanda, the owners of the various businesses using the minigrid were interviewed and observed. A questionnaire was developed to ask questions around what type of appliances are used, when they are used, and if this demand is flexible. Furthermore, the questionnaire sought to establish how much consumers are willing to accept (WTA) to respond to the time of use tariffs by shifting their demand to daytime.

Examples of productive use of energy facilitated by MeshPower and E4I:

The study established that there is limited flexibility and potential for demand shifting among the current appliances being used on the grid. This is mainly due to the social factors that influence when the energy appliances are used. In particular, the agrarian livelihood of the population means that most appliances are not used before 1200hrs, while an evening community market increases the demand for energy after 1600hrs. Among the appliances that were found to be flexible, it was established that the willingness to shift usage was low, as measured by the level of discount price (125 RwF) demanded to respond positively to the ToU tariffs compared to the current discounted day tariff of 300 RwF.

The study then investigated the impact of demand shifting on the techno-economics of the minigrid using CLOVER, a minigrid simulation tool. It found that demand shifting reduced the required battery storage size from 40 kWh to 25kWh to meet the same level of system reliability. This led to a reduction in capital expenditure on battery storage of almost 40%.

Conclusions and recommendations

While a more positive response may be expected as users make more top-ups for energy and thus become more likely to seek out ways to save money, the study concludes that the biggest potential for DSM exists in integrating demand response using the smart grid. Using the smart grid to control the power drawn per appliance at different times of day may also lead to the desired behavioural change over time and thus influence usage times in the long term. Lastly, a mix of technologies may be required to fully meet the needs for productive use in consideration of the main economic activity in a given area. For example, communities heavily reliant on agriculture may benefit more from solar systems for irrigation, a solution that is difficult to implement using minigrids.

Noah Ochima

Noah OchimaAfter completing his Bsc Electrical Engineering on a full state scholarship, Noah went on to work for seven years with different internet service providers in Uganda. His experience in telecoms helped him appreciate the nexus between availability of energy and internet connectivity with many clients based in remote areas.

He joined the MSc in Sustainable Energy Futures following a placement with a renewable energy developer where he was involved in offering early stage support during the pre-feasibility stage of a 20MW biomass project.

The MSc not only offered him solid technical skills in sustainable energy, but also explored the areas of policy, economics and project management. For the next part of his career, he would like to take up opportunities in energy consulting and project management, particularly on energy for development

 

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