Southern Africa faces a number of severe energy pressures. Power production falls far short of demand, grid development has been slow, and the electricity sector depends heavily on fossil fuels and hydropower, which makes it vulnerable to oil price volatility and the effects of climate change. There is an urgent need to diversify the generation mix by tapping into the region’s vast renewable energy potential.
Achieving a larger, diverse, secure and low-carbon energy sector requires a variety of solutions. Along with continued development of national grids, decentralized options such as mini-grids are needed, particularly in areas where grid extension is not technically or financially feasible.
This discussion brief highlights the energy pressures faced by member states within the Southern Africa Development Community (SADC) and explores how renewable energy mini-grids might provide an alternative and additional energy solution to relieve these pressures. The brief is based on a desk study comprising a review of recent research and policy documents on mini-grids in the SADC region.
Mini-grids are still mostly in the pilot phase in most countries, and their contribution to southern Africa’s electricity mix remains minimal. Existing mini-grid solutions vary widely depending on size, location relative to the grid, technology, ownership and operation models.
Scaling up the use of mini-grids is a major challenge, as countries have yet to find sustainable business models. Barriers to wider deployment include the relatively small size of the off-grid market, the low incomes of end-users in rural areas, low electricity tariffs that are unattractive to the private sector, lack of supportive policy and regulatory frameworks, and limited access to affordable longer-term finance.
There is no single solution to these challenges. Instead, mini-grid systems must be tailored to the local social, economic and cultural context, as otherwise they may not be fit for purpose. A supportive policy and regulatory environment is also crucial.
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