Abstract

Mini grids can economically supply electricity to people in areas that the main grid is unlikely to reach soon. Mini grids can be quickly deployed and are increasingly price-competitive against traditional sources of energy. They can attract private financing and operate without subsidies when allowed to charge cost-recovery tariffs. Moreover, the arrival of the main grid does not mean that the investment in mini grids will be wasted: their generation and distribution assets can generally be reused in an integrated system. The key is to define—in advance—technical standards and commercial options for integration once the main grid arrives.

Highlights

  • Mini grids can economically supply electricity to people in areas that the main grid is unlikely to reach soon

  • This Live Wire was prepared by the Global Facility on Mini Grids, a program of the World Bank’s Energy Sector Management Assistance Program (ESMAP)

  • A lighter approach to standards may foster the development of mini grids in communities where subsidies are limited, and where the ability to pay for the desired service level rules out the use of technology compatible with the main grid

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Summary

Supported by THE BOTTOM LINE

Mini grids can economically supply electricity to people in areas that the main grid is unlikely to reach soon. Mini grids can be quickly deployed and are increasingly price-competitive against traditional sources of energy. They can attract private financing and operate without subsidies when allowed to charge cost-recovery tariffs. The arrival of the main grid does not mean that the investment in mini grids will be wasted: their generation and distribution assets can generally be reused in an integrated system. The key is to define—in advance—technical standards and commercial options for integration once the main grid arrives. This Live Wire was prepared by the Global Facility on Mini Grids, a program of the World Bank’s Energy Sector Management Assistance Program (ESMAP). Investing in Mini Grids Integrating with the Main Grid Later: A Menu of Good Policy and Regulatory Options

Why is this issue important?
Traditional Mini grid Main grid
Technical standards specific to mini grids
Asset buyout
No policy objective to protect the distribution companies from competition
Option to convert to SPP and SPD
Findings
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Full Text
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