Where does off-grid technology fit in?
When villages or towns are very far from existing infrastructure, or are very small, it can be much more cost-effective to use mini-grid or stand-alone systems to provide electricity.
What are the obstacles to market analysis in this field?
A lack of technical data, along with outdated institutional systems, can hinder progress. These new technologies and approaches are creating possibilities that did not exist before, but they are capital intensive and have a long payback time in a sector where capital is still relatively limited. Careful market analysis is therefore required to target communities that are in need, can pay,have potential for growth, and are unlikely to be connected to the grid before the off-grid project can pay off. The information required for this analysis is often hard to come by or non-existent in developing countries, which prevents both the private and public sectors from being able to plan strategically.
Five key lessons and recommendations emerge from efforts to date
- Recommendation 1: The market for off-grid development is there and can be an important driver of increased access in areas that are far from the grid. Even when countries have ambitious goals of connecting the entire country, off-grid solutions can be a stopgap to quicken the pace of electrification, while also increasing generating capacity – a particularly valuable factor in situations where system capacity is insufficient to supply newly extended grid lines.
- Recommendation 2: GIS is already being used around the world to target areas that are both in need (far from the grid and not likely to be connected soon) and offering a promising market (densely populated and already spending on other fuels, while also offering the potential for development of non-household uses of electricity). GIS capabilities have allowed the sector to expand and attract international finance and interest, but governments and development partners must support these approaches to bring transformational change that will add benefit throughout the sector.
- Recommendation 3: Many developing countries still suffer from a lack of accessible and transparent data, which discourages private sector investments at a larger scale. The problem lies not only in the actual lack of data, but also in making what data there are available for use. Attitudes are slowly changing, with many countries embracing the benefits created by open-data policies – a promising trend that should be encouraged.
- Recommendation 4: Many of the technical advances achieved to date require highly specialized capacity and resources, which has kept many players from achieving higher efficiency. With open data and focused efforts in certain areas where data can be transformational as a public good, it is possible to create a more level playing field and reduce the barriers to entering the market. Modern analytics are showing promise by transforming data into insights and information that can be used to make decisions.
- Recommendation 5: All the discoveries from the activities reported here have shown that support from the public sector is needed to foster interdepartmental and multi-stakeholder cooperation. Without alignment of goals between public and private institutions, private developers will constantly be on the defensive. They depend on government data for planning, and on government regulation and policy for continued profitability. Government planners should recognize that private developers offer a powerful force for improving access to electricity and the development benefits it brings.