Often, I find myself in conversations on how to achieve universal electricity access by 2030. And yes, a lot of information is already out there on what has been done, what is being done, what still needs to be done and what may remain a hurdle that will require more than double effort and resources to achieve the universality goal. If we take the Kenyan electricity sub-sector for example, statistics indicate that at least 75% of the population has access to electricity as of today. A majority of these is predominantly people in the urban to peri-urban areas where grid extension, intensification or densification was relatively viable.

Retrospectively, Kenyan electricity accessibility was much lower slightly over a decade ago. The kind of progress we talk about today took a myriad of efforts such as the last mile connectivity program – which had its good and fair share of challenges.

But reaching the segment of the population several miles away from the national grid does not stop there, it also means rethinking the overall operation plan, the downtime and restoration plan. Because there is no reason to have connectivity only to end up with multiple interruptions or long durations of disconnection per year, if customer average interruption duration index (CAIDI) or system average interruption duration index (SAIDI) and other related indices are anything to go by.

With 25% of the population yet to be reached, majority of which is based in remote and hard to access regions, it is not going to be business as usual. Through the government Kenya Off-grid Solar Access Project (KOSAP) and Rural Electrification and Renewable Energy Corporation, work has also been ongoing to expand stand-alone systems and mini grids in remote locations across the country. Discussions around involvement of private players to build and operate energy infrastructure is taking centre stage now more than ever before.

This past month I had the opportunity to interact with several mini grids developers – to understand their operation and maintenance of the grid infrastructure – but to also interact with the customers and better understand the challenges that surround this market. It was particularly useful to penetrate some remote locations as part of an ongoing study of public vs private mini grids development. While most of this is information available on public domain, this post delves into the challenges and opportunities as part of a series on reflections and I have lessons learnt in the off-grid sub-sector over the years.

What must be done to accelerate access to electricity in remote off-grid locations:

1. Infrastructural and logistical challenges of deploying materials and equipment to extremely remote locations must be overcome – in our effort to visit a certain solar mini grid site, we drove several miles through a rather difficult terrain and in some cases went across what would be wide rivers on a rainy season. There is simply no way to get such sites during the rainy season – because there were no bridges. When you think about operating a site in such a location, then as a developer you have to really think twice on how your services will get to the customers, and how support services including technicians’ will get to site at such times. Is there room to have a pricing arrangement that recognizes these natural uncertainties? Because you are otherwise setting yourself on a loss venture for which no sane investor would go in there.
2. Productive use of electricity is good, but it requires the presence of a microeconomy for electricity to become the enabler of development- In short, by putting up electricity infrastructure without solving the root problem faced by a community e.g. lack of raw materials or factors of production required to engage in economic activity locally, electricity would not solve the actual development gap. In my case studies, I came across communities that struggle to put a meal per day on the table. Where land is completely dry and non-arable, where terrain is hard to access and far off from any trading centres. In one area, there was no means of livelihood other than fishing – for fisherfolk who were lucky to catch something a day. So, while on one side it sounds great to promote use of electricity, the real question becomes how will a community afford to pay for electricity if other enabling factors are not being addressed more holistically? I think we must equally concentrate on opening rural micro-economies for electricity use to make sense there – because customers can somehow have means to pay for it.
3. Introduce cross-subsidy programs to incentivize private mini grid developers. I have heard this suggestion mentioned severally in industry circles but not much effort going on to make it happen. While subsidy programs are generally discouraged due to risk of market distortion, I do not see any other way around it if we think about the hardship locations where the underserved 25% of the population is based. Some of these areas also happen to insecurity prone so you don’t only have to worry about how your materials make it to a site in good shape, but the threat to life poised to your human resources. The cost of accessing resources such as water which is important when you think about O&M of solar panels in a very dusty location must also be considered. In the case of public mini grids, the operational cost nightmare is somewhat solved by virtue of customers being under the utility provider. Depending on your customer category, the electricity tariff may well work to your advantage, especially for lifeline category of customers who use less than 30 units a month. There is need to think about the right incentive to offer private developers – because without spreading the risk of minimalistic customers – which is often the case in the remote areas – it is difficult to break even.
4. Rethinking battery energy storage especially in high temperature regions – Fortunately or unfortunately depending on how you choose to look at it, the 25% of underserved population also happens to be in the typically ASAL regions that experience rather hot temperatures. While technology has evolved over time to introduce ‘superior’ lithium-ion batteries that can withstand harsh temperature conditions, reality is that durability of batteries for off-grid systems remains a big struggle and, in some cases, deal breaker. For an industry where batteries alone, takes nearly 50% of the entire CAPEX cost, the cost of acquisition and maintaining energy storage in the long haul must come down. There is need to dedicate more resources toward research and innovation to find the best durable solution – locally and globally. And it must be found quickly if we are to reliably attain our universality agenda in the shortest time possible. In one of my site visits, 3 of 4 battery banks were problematic – and the only comfort to the site operator was the fact that daily electricity demand remains low. However, this demand was likely to shoot in the next few months if the ongoing construction of two large institutions – a school and hospital that could be seen in the area is anything to go by.
5. Maximizing on strengths of public private partnership for improved service delivery – Public and Private entities have their own unique strengths and weaknesses when it comes to developing, operating and maintaining off-grid infrastructure. On one hand, I saw a rather strict approach to workmanship from one side – adhering to minimum standards and guidelines. On the other hand, was an observation of relatively better O&M measures. These two can be merged to develop but also operate and maintain infrastructure assets in the long term.

Until the next post, happy new month!