Over the past year, Parallax has been engaged with a variety of consultancy activities that address rural electrification in developing countries, with a focus on Green Mini-Grids in Africa. The intention is that the documents produced can now provide the basis for future practical interventions aiming to bring clean energy access to those in need.
SEforALL CEMG HIO
The MD of Parallax is currently the Chair of the Steering Committee for the Sustainable Energy for All (SEforALL) Clean Energy Mini-Grids (CEMG) High Impact Opportunity (HIO). The work of the CEMG HIO is outlined in its first Annual Report for 2015, which illustrates how this HIO is making a significant contribution to the SEforALL objectives. CEMGs offer an excellent example of the linkage between energy access, renewables and efficiency, and the connection to other development challenges. The activities of the HIO, helping SEforALL to share the progress made and the lessons learned in achieving the Sustainable Development Goals, provide a foundation for members to deliver effective CEMG installations in the future.
AfDB Africa Strategy for GMGs
This GMG Strategy proposes that African governments prioritise a number of key issues for immediate action, so as to create the necessary foundation for national GMG market development. In particular, there should be commitment from Governments to design streamlined GMG licensing procedures for legitimate GMG service providers; to publish expansion plans for the main grid and update them regularly; to determine and put into law dependable outcomes in the event of grid connection to a mini-grid, including fair compensation to GMG business owners for the loss of productive assets; and to put into law provisions permitting the application of cost-reflective and reasonable consumer tariffs, or provide regular compensatory subsidies for GMG operations.
As part of the World Bank’s “Global State of Energy Access Report”, Parallax was asked to write the chapter on “emerging and innovative business models” as well as to pull out the key messages from the report as a whole. Regarding business models, some of the main conclusions included the need to balance return-on-investment with customer affordability with public sector support often necessary to offset upfront private investment costs; emphasis on appropriate policy measures is an essential requirement ; clear grid expansion plans must be available to suppliers of alternative off-grid options; and training for local service providers is essential to build long-term supply and support structures, and allow delivery mechanisms for energy service to be effectively adapted to the unique local conditions.
EU SEforALL TAF
The European Union (EU) has committed significant support to the goals of Sustainable Energy for All (SEforALL) through its Technical Assistance Facility (TAF), which supports a wide range of activities. As part of this TAF initiative, Parallax considered the benefits of an EU “pricing tool” for rural electrification, aiming to select the most favourable electrification options for investment. The ultimate aim was to identify a tool for project selection and thereby help to establish a global centre of excellence for rural electrification. Ideally, such a tool would allow decision-makers to enter the parameters of a proposed intervention into the tool and generate output that shows what level of budget is acceptable. Amongst other criteria, this must involve an assessment of whether the likely price to the end consumer will be affordable (thereby indicating whether the proposed approach will be viable).
UNEP GMG market assessment
On behalf of UNEP, Parallax worked together with the UK Carbon Trust to creation of a mini-grid market opportunity assessment methodology and generate comparable data across several countries in Africa. This formed the “market intelligence” component of the African Development Bank’s “Green Mini-Grid Market Development Programme”. Parallax’s efforts were focussed on Mozambique since we have established a good understanding and contact network for green mini-grids in this country. All of the factors likely to influence the uptake of mini-grids were assessed, including the financial, policy and technology issues. Mozambique was subsequently recommended to the AfDB as a focus country for the follow-up implementation phase of its GMG programme.