Andrew Barnett, Member SIGMA Advisory Group, reflects on discussions, themes and presentations from the SIGMA Final Dissemination Event.
I found this a most enjoyable meeting, from which I learned a great deal. The four SIGMA presentations were clear and insightful. My overall impression is that a coherent story is emerging about Mini grids in Africa. The teams have injected a sense of realism into what is in practice a very tough business. This is in contrast to the overly optimistic impression given by the otherwise excellent ESMAP review of mini grids [1].
SIGMA’s research can help to frame a new narrative about mini grids. Perhaps the most important element of such a narrative is being clear about objectives. One objective aims at increasing relatively poor people’s access to modern energy services offered by electricity, particularly in off-grid and remote locations. The second objective is to promote small scale renewable energy in financially sustainable enterprises. Such a narrative need not shy away from the global experience that providing modern electrical services to poor people almost always will require some sort of subsidy (as was the case in much of Europe and the US). The key here is to try to make the subsidies “smarter” than is often the case. Smart subsidies that help make markets, rather than destroy them. In this context it is important to recognize how many grid systems in Africa are not profitable, providing substantial, if unintended subsidies to the relatively rich people they currently supply. The World Bank recognizes that two or more decades of power sector reform to achieve financial viability in central grids, using the so-called “standard model” have not been successful [2].
Anecdotally it would appear that the pursuit of the second objective, to produce financially viable small scale (often PV) systems is having some success when electricity supply is carefully matched to financially viable loads. This appears to be particularly the case with water pumping for fish farms, cold storage, and crop processing. These systems may well also provide employment and modern energy services to poorer people, but the main objective is a financially viable investment often away from the electricity grid. The discussion of electric bikes was new to me, but probably likely to be of increasing importance.
The problem arises when aid donors in particular confuse the two objectives and promote what one participant labelled “fictional models of profitability” in the area of “energy access”.
There would appear to be evidence that private sector investment is flowing to the PV sector in Africa. What is less clear is where it is going. A number of presentations described how private sector investment had not been as attracted to the sector as initially anticipated. But certainly, some private investment is likely to be blended with grant funds or aid backed guarantees. But other investments will no doubt be going to the more profitable end of the market and clients who have a reliable ability to produce an adequate return on the investment.
All the presentations inevitably mentioned end-use technologies. But in my opinion the issue of end-use devices could usefully be given a more explicit and extensive treatment. Many of the papers alluded to the fact that the choice of appliances determines the nature, scale and distribution of the impact of modern energy services, and that the question of who chooses and has access to the devices is crucial. But in my view, more could usefully be made of these experiences. A more explicit treatment of end-use technology could then be explicitly linked to the evidence of power relations, divisions within “communities”, and the nature of poverty that a number of participants described.
I found the discussion about the nature of “failure” to be particularly important. Many of the SIGMA teams found a large proportion of mini grids that were no longer working, and this gives the sense of realism to the reports. The presentations often noted that the technology has “limited sustainability”, “limited business viability”, many mini grids “were no longer working”, systems were often “underused” while others (a smaller proportion?) were overloaded.
The idea of success and failure is closely linked to the idea of “accountability”, as both SIGMA researchers and participants observed. Such an approach is rare in my experience. Monitoring and Evaluation rarely identifies the individuals and institutions who should have taken responsibility for technology choice, operations and maintenance. Again, it is in the nature of power relations that researchers and project managers will be reluctant to hold to account those who promote unrealistic expectations of financially viable “energy access”, and those who promote their own programmes without coordinating with others, both aid agencies and utilities and their grid extensions.
Certainly, one can believe that there are many actors in the mini grid sector that are incentivized to emphasize (and often only report) “success”. The SIGMA experience did not shy away from the realities of the mini-grid sector and reported on the wide range of results that have been experienced. This has produced rich evidence of what seems to work and what does not. It has been a learning experience from which many useful recommendations will follow.
[1] ESMAP (Energy Sector Management Assistance Program). 2022. 2022 Mini Grids for Half a Billion People: Market Outlook and Handbook for Decision Makers. © Washington, DC: World Bank. http://hdl.handle.net/10986/38082 License: CC BY 3.0 IGO.
[2] Rethinking Power Sector Reform in the Developing World, by Vivien Foster and Anshul Rana , 2020. Sustainable Infrastructure Series. Washington, DC: World Bank. doi:10.1596/978-1-4648-1442-6. License: Creative Commons Attribution CC BY 3.0 IGO. The study is based on over 30 background studies and reviews which are being published on a rolling basis in the World Bank’s Policy Research Working Paper series and can be accessed on the project World Bank, Washington, DC. website at http://www.esmap.org/ rethinking_power_sector_reform.
