The International Renewable Energy Agency (IRENA) has launched a report titled; “Quality Infrastructure for Smart Mini-Grids”. The report highlights the crucial role of quality infrastructure (QI) – standards, testing, certification – for a rapid and sustained market growth for renewable mini-grids. Transforming the global energy system in line with global climate and sustainability goals calls for rapid uptake of renewables for all kinds of energy use. Renewable mini-grids can be key providers of electricity access in remote areas and islands. Furthermore, interconnecting one mini-grid with another, or else with the main grid, can bring multiple benefits. Grid-connected mini-grids can increase power resilience and reliability, while allowing the integration of higher share of renewable electricity and therefore decreasing energy costs.

Mini-grids are complex systems with different suppliers, they are developed for different applications and there is often high regulatory uncertainty regarding their installation and operation. The sustainable market growth and long-term profitability of mini-grid systems requires QI. REGlobal provides the key findings and excerpts of the report…

Key findings of the report:

  • IRENA analysis identified a global market with an installed capacity of 4.16 gigawatts (GW) of off-grid renewable energy mini-grids, predominantly power by bioenergy linked to industrial mini-grids. Hydropower mini-grids in particular have recently increased their deployment in the community and industry sectors. Solar PV mini-grid installations are commonly used for commercial, community and agriculture purposes.
  • Mini-grids using 100% renewable energy are becoming a cost-competitive solution compared with mini-grids based on liquid fossil fuel generators. The levelised cost of electricity (LCOE) of renewable mini-grids ranges from USD 0.39 per kilowatt-hour (kWh) to USD 0.75per kWh, with prospects of decreasing to USD 0.20 per kWh by 2035.
  • Innovations and technological advancements continue to expand the range of uses and improve the operation of mini-grids. The core functionalities for a renewable mini-grid are power generation, energy storage, conversion, consumption, and Control, manage and measure (CMM). Internet of things (IoT) based platforms will form the backbone of the CMM functionality in the future, while innovations in storage technology will enhance the applications for mini-grids.
  • Examples of mini-grids that stopped operating after just a few years illustrate how a lack of QI (from poor components quality to lack of inspection or training) leads to the loss of the investment, the loss of the expected electricity production, and more generally damages the national market reputation. Mini-grids market development must go hand in hand with QI development.
  • QI, including comprehensive standards, testing, certification and accreditation, inspection and monitoring, and metrology, is key to reduce risks associated to mini-grids development. Effective QI can improve finance conditions, reduce legal, regulatory and performance uncertainty, further reduce LCOE and enhance trade and scalability of mini-grid markets.
  • Currently most of the QI is oriented to the functionality of individual components of a mini-grid, and not to the overall mini-grid system. However, mini-grids are complex systems and should not be considered as the simple sum of their parts. A comprehensive approach to the development of QI is necessary.
  • The main challenge for mini-grid lies with system-level testing. More flexible and cost–effective testing methods can reduce this risk perception associated with mini-grids. The combination of physical components with simulations allows testing of the control functionality of a mini-grid without having to construct the complete mini-grid, while limiting testing costs and facilitating easy adjustments.
  • A gradual approach to integrate QI in policy frameworks is required. Policies should consider the constant evolution of mini-grids and refer to different levels of QI at different times at market development. The experience from the solar PV market uptake shows that mini-grids also need a certain level of national and international QI for a sustainable market.
  • Renewable mini-grids, which combine loads and renewable energy resources, are seeing growing motivation for their deployment, driven by the many benefits these integrated energy infrastructures can bring to key market segments such as islands and remote communities. Renewable mini-grids can provide electricity access, increase power resilience and reliability, reduce energy costs and carbon footprints, and improve the quality of life.
  • With increasing deployment, it is crucial to look at these systems’ performance, durability and adaptability to new developments. This sheds light on the crucial role of developing quality assurance mechanisms and so-called “quality infrastructure”, which is explained in the report, to successfully secure robust renewable mini-grids that can serve present and future human generations.

Renewable mini-grids of the future

The growth of mini-grid markets should be accompanied by a strong quality infrastructure that ensures that the implemented systems will deliver the expected services and benefits in the long term. International standards, testing and licensing facilities are key to ensuring the high quality of deployed mini-grids.

The core functionalities for a renewable mini-grid are: power generation; energy storage; conversion; consumption; CMM.

Renewable mini-grids of the future will have more advanced CMM operations, due to the development and widespread use of smart meters and IoT solutions, as well as improved data availability and forecast of renewable energy generation. Mini-grids have an inherent level of intelligence and data collection. IoT-based platforms will form the backbone of CMM functionality in the future.

Innovations in storage technologies will also impact the mini-grids of the future, with storage technologies ranging from batteries to electrolyser technologies, with different applications. The integration of electric vehicles (EVs) has many benefits for mini-grids as they can be seen as storage for intermittent renewable generation. However, it also poses a set of challenges that are different from those involved in the integration of EVs in a national grid infrastructure.

On the consumer side, the traditional consumers-to-prosumers transition is accompanied by a variety of technological innovations ranging from local generation, storage and controls to innovative transaction technologies. Also, mini-grids are great environments for peer-to-peer electricity trading, which facilitates a better use of the local generated electricity between consumers (Figure 1).

Today’s renewable mini-grids

Many efforts have been made to collect mini-grid data, but multiple sources still vary from one to the other. As a very fast-moving sector in recent years, it hasn’t been easy to estimate the global share of mini-grids, grid-connected and off-grid, powered by renewable energy sources. Estimates are clearer for the global share of mini-grids: there are about 19, 000 installed mini-grids globally, and about half use diesel and other fossil fuel-powered generators (ESMAP, 2019). There is a great market potential to replace this large quantity of emitting mini-grids with renewable energy sources.

IRENA analysis identified an installed capacity of 4.16 gigawatts (GW) of off-grid renewable energy mini-grids, serving a population of at least 8 million people (Figure 2). Bioenergy-based mini-grids show the highest installed capacity, due to the fact that they are often used in high-power industrial mini-grids. Wind- and hydropower-based mini-grids are deployed across different end-use sectors. Hydropower mini-grids in particular have recently increased their deployment in the residential and industry sectors. Solar PV mini-grid installations are commonly used for commercial, residential and agriculture purposes.

When possible, interconnecting a mini-grid with another one or with the main grid can bring a series of benefits, changing the operation mode of mini-grids. Figure 3 summarizes the different types of minigrids. Grid-connected renewable mini-grids can make the power supply more reliable and resilient as well as boost renewable sources to be a significant contributor to energy generation. However, autonomous renewable mini-grids are mainly relevant for remote areas, both for rural electrification and for facilities in remote areas.

The off-grid and interconnected mini-grids are expected to see enhanced deployment in coming years, and the grid-connected segment is expected to see the biggest growth as a result of the increasing mini-grid activity of utilities and growing grid issues in urban, commercial and industrial areas (Global data, 2018).

Although the cost of mini-grid hardware has generally declined in recent years as a result of increased competition and policy-driven incentives, the downwards evolution of soft costs, which are associated with customised engineering studies and regulatory, environmental and interconnection compliance, is sometimes restricted because of non-competitive regulatory friction (Cherian, 2017). Therefore, these costs currently represent a larger percentage of total costs compared with past years. The findings for 100% renewable energy-based autonomous basic service and autonomous full service community mini-grids, where the LCOE in 2020 for the autonomous basic ranges from USD 0.39 per kWh to USD 0.58 per kWh and for autonomous full from USD 0.50 per kWh-USD 0.75 per kWh (summarized in Figure 4). Mini-grids using 100% renewable energy are a cost-competitive solution compared with small gasoline and diesel generators (USD 0.35/kWh-USD 0.70/kWh (Agenbroad, et al., 2018)).

For islands and remote communities (without access to a distribution grid, e.g. desert or mountain communities), energy access is the primary driver. The integration of renewable energy in these mini-grids enables a decrease in the cost of energy, with additional benefits of service quality, positive environmental impact and quality of life. (The drivers encountered for the different categories and applications of mini-grids are presented in Figure 5).

Quality infrastructure

The sustainable market growth and long-term profitability of mini-grid systems require QI. Mini-grids are complex systems with different suppliers, they are developed for different applications, and most of the time there is high regulatory uncertainty regarding their installation and operation. QI, including comprehensive standards, testing, certification and accreditation, inspection and monitoring, and metrology, is key to reducing risks. QI elements are illustrated in Figure 6.

QI’s main goal is to promote quality products, processes and services; to prevent or overcome market barriers; and to make technical co-operation easier (IRENA, 2015a). This would ultimately reduce system downtime and improve mini-grid operation and maintenance. QI also entails a direct economic benefit for stakeholders (reduced LCOE) in that its presence reduces risk for investors and leads to better financing conditions for future projects, illustrated in Figure 7. The technical and regulatory clarity that QI brings along stimulates sustainable innovation and instils confidence in global mini-grid markets. This in turn facilitates trade and allows mini-grid system providers to easily expand their operations across different regions.

This report identifies that today, most of the QI and standardisation work is oriented to the functionality of individual components of a mini-grid, and not to the overall mini-grid system. In the pathway towards smart mini-grids, further efforts are needed to elaborate standards and other QI elements at a mini-grid system level. To achieve this, current gaps in each of the mini-grids functionalities have to be filled.

A main challenge for mini-grids lies with the system-level testing. The main goal of mini-grid testing is to make it easy and safe to repeat a mini-grid system in varying circumstances. Standardised testing procedures that allow mini-grid CMM equipment to be tested in varying conditions and in different configurations are key to doing this. Nowadays, mini-grids system-level testing is often done through physical tests during system building and commissioning, or even at the end of mini-grid deployment. This results in a higher risk perception by stakeholders.

A mini-grid’s quality of operation depends on the quality of its components and design, but also on its installation and maintenance. There are no accredited certification bodies for mini-grid installers (and operators) yet, as there are for PV installations and other renewable energy resources, mainly due to the absence of relevant standards. Where licensing requirements, e.g. for PV installers, already exist, the extension of existing licence trainings to include storage and system control could be a solution.

QI development benefits all stakeholders, but the complexity of mini-grids and the disruption they generate for traditional business models create bottlenecks in the process (decision-making inertia resulting in difficulties to develop comprehensive QI). In this context, policy is key to ensuring not only the affordability of mini-grids, but also that safety issues are addressed appropriately and that reliability and quality of service to the end customer are ensured. To that end, QI provides the means to assess the conformity of mini-grids with relevant standards and best practices and their compliance with appropriate regulations.

One of the biggest difficulties is to formulate clear policy goals that can catalyse mini-grid implementation, taking into account demographic changes, industrial evolution, urban development and the electrical infrastructure required.

Therefore, policy mechanisms can facilitate conformity (through guidelines, development of national standards or participation in international standardisation) or impose compliance (through regulations, licensing and enlisting procedures). In an incipient mini-grid market it might be easier and more effective for policy makers to issue safety and design guidelines than to integrate QI into legislative actions (laws, mandates and technical regulations), which are more suited to a more mature market.

Going forward, policy makers should first refer to the available international and national quality infrastructure when drafting mini-grid regulations and policy. When doing this, it is crucial to consider the current level of market development and to adjust quality requirements accordingly.

The full report can be accessed by clicking here