03 DISTRIBUTED RENEWABLE ENERGY FOR ENERGY ACCESS

Distributed renewable energy (DRE)i systems are power, cooking, heating and cooling systems that generate and distribute services independently of any centralised system, in both urban and rural areas of the developing world. They already provide energy services to millions of people, and their numbers continue to increase annually.

DRE systems can serve as a complement to centralised energy generation systems, or as a substitute. They can provide affordable lighting, enhance communications, and facilitate greater quality and availability of education due to longer studying periods and the enhanced use of informational technologies in the classroom. They also can provide greater quality and availability of health services. In addition, the use of DRE systems and integration of renewables into existing mini-grids can reduce dependence on fossil fuel imports.

DRE systems offer an unprecedented opportunity to accelerate the transition to modern energy services in remote and rural areas, while also offering co-benefitsii. Although these co-benefits are diverse and difficult to value and monetise, they cut across the following dimensions:

■ Cost savings when compared to the grid in many markets

■ Fuel availability and/or stability and predictability of prices

■ Modularity, flexibility and rapid construction times

■ Faster technological learning curves and rates of improvement compared to fossil fuels

■ Enhanced reliability and resilience

■ Improved health through reductions in indoor air pollution

■ Contribution to climate change mitigation

■ Reductions in deforestation and in environmental degradation

■ Positive effects on women’s empowerment

■ Reductions of poverty among vulnerable groups.1

This chapter provides a picture of the current status of DRE markets in developing countries and presents an overview of the major networks and programmes that were operational in 2016.

Status of Energy Access: An Overview

Approximately 1.19 billion people (about 16% of the global population) lived without electricity in 2014, about 15 million people fewer than in 2013.2 About 2.7 billion people (38% of the global population) are without clean cooking facilities.3

Figure 31. Electricity Access in Developing Countries, 2014

Figure 32. Access to Clean Cooking Facilities in Developing Countries, 2014

Numbers and trends differ greatly by region. The vast majority of people without access to electricity and clean cooking are in sub-Saharan Africa and the Oceania region, and most of them live in rural areas.4 (→ See Figures 31 and 32.)

In Africa, nearly 60% of people have no access to reliable electricity.5 To put these numbers in perspective, the entire continent of Africa has about 150 GW of installed power generating capacity, uses about 3% of the world’s electricity (mostly within South Africa) and accounts for only about 1% of the world’s CO2 emissions.6 The official electrification rate for sub-Saharan Africa is 35%, and only 13 of the region’s 38 countries have power systems larger than 1 GW.7 With only 50 GW of installed capacity, the entire electricity supply of sub-Saharan Africa (excluding South Africa) is less than that of the Republic of Korea.8

In addition, about 793 million people (69%) in Africa lack access to clean cooking facilities, the vast majority of which (792 million) are concentrated in sub-Saharan Africa.9 Roughly 134 million people in Nigeria, 92 million people in Ethiopia and 71 million people in the Democratic Republic of the Congo still rely on firewood, charcoal or dung for cooking purposes.10

In Asia, countries such as China, Malaysia and Singapore have made great strides towards electrification. Elsewhere in the region, however, comparatively high percentages of national populations remain without access to modern energy. India is home to more people without reliable access to electricity networks (244 million, or 19% of the population) than any other country worldwide.11 Bangladesh has approximately 60 million people without electricity access (38% of the population), Pakistan has 51 million people (27%), and Indonesia has 41 million people (16%).12 In Cambodia, 97% of the urban population has access to electricity, while only 18% of the rural population has access.13 In addition, the number of people relying on firewood, dung cakes, charcoal or crop residue to meet their household cooking needs is more than 819 million (63%) in India, 453 million (33%) in China, 142 million (89%) in Bangladesh, 105 million (56%) in Pakistan and 97 million (38%) in Indonesia.14

Although the Middle East and Northern Africa regions have electrification rates of almost 92% and 99%, respectively, in some individual countries high shares of the population still lack access to modern energy.15 In Yemen, 54% of the population (14 million people) does not have access to electricity, and 31% (8 million people) lacks access to modern cooking fuels and technologies.16

Similarly, in Latin America and the Caribbean, 95% of inhabitants have access to grid electricity; the 22 million people without access are concentrated largely in six countries: Bolivia, Colombia, Guatemala, Haiti, Nicaragua and Peru.17 About 65 million people in the region (14% of the population) do not have access to clean forms of cooking.18 In Haiti, 92% of the population is dependent on traditional cooking fuels and devices, while in Honduras, Guatemala and Nicaragua 50% or less of the population has access to clean cooking solutions.19

Distributed Renewable Energy Technologies and Markets

People in rural and remote regions generally acquire improved access to energy in three ways: 1) through household-level use of isolated devices and systems to generate power and heat for space and water heating, cooking and productive uses; 2) through community-level or renewable energy-based mini- or micro-grid systems; and 3) through grid-based electrification, where the grid is extended beyond urban and peri-urban areas.

This section focuses on the first two (distributed) means of improving energy access and includes small-scale solar PV and stand-alone lighting systems; wind turbines; biodiesel generators and micro-and pico-hydro stations for electricity generation; mini-grids; and solar and biomass heating and cooling units and cooking devices. Distributed energy use varies by price, resource base and type of household, among other factors.20

In recent years, off-grid solar energy has been one of the fastest growing industries in providing energy access.21 Between 2010 and 2016, about 23.5 million off-grid solar systems (pico-solar and solar home systems of less than 100 W) were sold worldwide, providing an array of services.22 In 2016, nearly 8.2 million off-grid solar systems were sold, representing a global increase of 41% compared to 2015.23 By 2016, more than 100 companies worldwide actively focused on stand-alone solar lanterns and solar home system (SHS) kits.24

Across the top five countries of the distributed solar industry, sales in India, Kenya and Uganda increased in 2016 compared to 2015, whereas sales in Ethiopia and Tanzania decreased.25 (→ See Figure 33.) Sales were highest in sub-Saharan Africa, although sales in that region decreased by about 1 million in 2016 (35%) compared to 2015..26

Figure 33. Sales of Off-Grid Solar Systems in Top 5 Countries, 2015-2016

Roughly 10% of the 600 million people living off-grid on the African continent are supplied with energy through DRE systems.27 Eastern Africa accounted for an estimated 70% of sales of pico-PV and SHS in sub-Saharan Africa in 2016.28 In Kenya, more than 30% of people living off the grid have a solar product at home.29 Several countries, including Benin, Nigeria and Rwanda, recorded sales exceeding 100,000 units in 2016.30 Benin recorded more than five-fold growth, which may be attributed mainly to active government engagement and to the introduction of Pay-As-You-Go (PAYG) models.31 In South-Central Asia, the second largest market for distributed solar systems, sales increased 19% from 2015 to 2016, including record sales of 3.1 million off-grid solar products in India.32

The smallest distributed solar PV systems are pico-PV systems (1-10 W), which can power small lights, low-power appliances and mobile phone charging stations.33 These systems typically decrease in size as the efficiency of appliances that use the generated power improves. Pico-PV systems replace kerosene lamps, candles and battery-powered flashlights and are the most widely used DRE technologies by far.34

Cumulative sales of branded pico-solar products (mainly portable lights) since 2010 surpassed 23 million units in 2016.35 In 2016, more than 7.5 million pico-PV products were sold, representing 94% of all off-grid solar products sales; sub-Saharan Africa and South Asia together accounted for 81% of global sales (6.57 million units).36 Products with a single light and mobile phone charging capability were the most-sold pico-PV products in the first half of 2016 and represented 38% and 41% of reported off-grid sales, respectively.37

Sales of small 3-10 W pico-solar systems are gaining momentum. In the first half of 2016, sales of these systems increased nearly five-fold to 750,000 units, from about 150,000 units in the second half of 2015.38 In South Asia, sales grew 547%, from 35,000 units to 227,000 units.39

Solar home systems (10-500 W) generally consist of a solar module and a battery, along with a charge control device, so that direct current (DC) power is available during dark and cloudy periods. SHS provide electricity to off-grid households for lighting, radios, television, refrigeration and access to the Internet. Systems in this size range also can be used for non-domestic applications such as powering telecommunications, water pumping, navigational aids, health clinics, educational facilities and community centres. For higher power demands (e.g., 500-1,000 W), larger solar panels, additional battery capacity and inverters may be needed; the advantages of such systems lie in their ability to power more-sophisticated electric appliances.40

As of 2016, more than 6 million SHS and kits were in operation worldwide, with 25 million people benefiting from them.41 Some 377,000 SHS (ranging from 10 W to 100-plus W) were sold worldwide in 2016; sales increased by more than 55% in the first half of 2016, to 204,000 units (compared to the 132,000 units sold from July to December 2015), and reached 172,000 units in the second half of 2016.42 Market leaders such as M-KOPA, Off Grid Electric, d.Light, BBOXX, Nova Lumos and Mobisol served about 700,000 customers as of 2016.43 Bangladesh – the largest SHS market worldwide – now has more than 4 million units installed. Off-grid SHS units are cost-competitive with the grid in many African countries and often offer energy services at equal or lower cost that are of better quality than lighting from kerosene lanterns.44

Small-scale wind turbinesi (100 kW or less) often are used to produce electricity for farms, homes and small businesses; off-grid applications include rural electrification, water pumping, telecommunication and hybrid systems with diesel and solar PV. Total installed capacity reached 415 MW in China by the end of 2015, and limited amounts of small-scale wind power capacity operate in other developing countries, including Argentina, India and Morocco.45

Biogas systems continued to be adopted for electricity provision in 2016. Natural oils from crops such as jatropha, and recycled agricultural or animal waste can produce a substitute fuel for diesel for power generation in small-scale applications, and agricultural residues (such as rice husks, straw, coconut husks, shell and maize stover) can be used for commercial-scale power generation. (→ See Biomass Energy section in Market and Industry Trends chapter.) At the end of 2015, at least 700,000 biogas digesters were in use across the developing world.46

During 2016, micro-hydropower systems (generally less than 100 kW; some micro-turbine systems produce 50-1,500 W) continued to be installed for off-grid applications, including irrigation, pumping and other forms of mechanical power as well as supplemental power sources for grid-connected users.47 In Nepal, more than 2,500 micro-hydro-based mini-grid systems, with a total capacity of about 25 MW, had been installed as of early 2016.48 In late 2016, the ADB announced plans to fund 1,000 micro-hydro plants in Pakistan’s Khyber Pakhtunkhwa province.49

In tandem with exponential increases in access to electricity supply, the use of electric household appliances is growing. Televisions and space cooling and refrigeration units are seen as key preferences for households after satisfying basic lighting and communication needs.50 Increasing the energy efficiency of these devices may have a positive impact on energy access.51 (→ See Sidebar 3.)

The deployment of renewable mini-grids accelerated in 2016 as well, and this market now exceeds USD 200 billion annually.52 Renewable mini/micro-grids are either emerging or mature in markets on almost every continent.53 (→ See Figure 34.) Mini-grid projects are being implemented with an increasing interest in interconnection, both to centralised grids and/or to other mini-grids.54

More than 23 MW of mini/micro-grid projects based on solar PV and wind power were announced in 2016, most of them in Africa.55 Madagascar partnered with Fluidic Energy to connect 100 remote villages (400,000 people) to electricity through a 7.5 MW solar PV-based mini-grid.56 Kenya successfully secured financing to build 9.6 MW of solar-powered mini-grids and 0.6 MW of wind-powered mini-grids.57 In 2016, a Tanzanian company launched the first of 30 hybrid mini-grids planned for a two-year period; the solar-diesel-power system, installed on Ukara Island, was expected to provide power to some 2,000 customers.58 In Asia, more than 156 Indian households were connected to a solar mini-grid project in the Ghatpendhri region during 2016.59

The use of DRE systems for cooking and heating continued to increase in 2016. A variety of technologies can provide cooking services in different capacities, which correspond to differences in performance and cost.60 (→ See Figure 35.) Wood, charcoal and dung are still widely used around the world for cooking purposes: dung is a major cooking fuel for about 185 million people.61 Existing substitutes include improved and cost-efficient biomass cook stoves, biogas cook stoves and electric hot plates powered by SHS or mini-grids. Electric cooking has reduced the consumption of firewood and/or charcoal between 10% and 40%, whereas biogas stoves, which are more widely used, have reduced these consumption levels between 66% and 80%.62

Figure 35. Cost of Various Cooking Technologies

In 2015, some 20 million clean cook stoves were distributed, an 18% increase from the 17 million distributed in 2014.63 China continued to lead installations in 2015, followed distantly by India, Ethiopia, Nigeria and Bangladesh. Outside of China, sub-Saharan Africa and South Asia were the two main markets for clean cook stoves, accounting for 24% (4.8 million) and 20% (3.9 million) of the units distributed.64 (→ See Figure 36.)

Figure 36. Number of Clean Cook Stoves Added in Top 5 Countries, 2014 and 2015

About 2.9 million solar cookers had been installed in the developing world by 2016.65 China had installed the highest number of units overall (100,000 solar cookers), and Madagascar had installed the highest number per capita (about 27 solar cookers per 100,000 inhabitants).66

The use of biogas for cooking also continued to increase in 2016.67 (→ See Figure 37.) Asia leads in total installations of domestic biogas plants, most of which are in China (42.6 million units at the end of 2016) and India (4.7 million units), with an estimated 620,000 units installed elsewhere in the region.68 Asia also saw more new installations of domestic biogas plants in 2016 than any other region.69 In Africa, 68,000 biogas plants had been installed as of late 2016, mainly through the African Biogas Partnership Programme; markets for biogas plants are growing on the continent, particularly in Kenya and Ethiopia.70 In Latin America, 90% of the cumulative biogas plants installed in 2016 were in Nicaragua.71

Figure 37. Number of Domestic Biogas Plants Installed in Top 5 Countries, Total and Annual Additions, 2014-2016

Total energy systems, which integrate different technologies to provide a bundle of services – usually electricity plus heating, cooking, pumping or other end-uses – showed noteworthy development, with new efforts emerging in 2016. Gamesa (Spain) launched its first energy system targeting the supply of electricity in areas without grid access by integrating solar PV, wind power, diesel and energy storage technologies to provide more than 2 MW of capacity.72 Mali expanded its electrification model of “Hybrid Systems Projects” consisting of diesel generators integrated with solar units and batteries.73 The “Powerhive” approach to total energy, which combines solar PV arrays, battery storage and smart metering systems with mobile telecommunications and payment applications, continued in East Africa during the year, and an additional USD 20 million in funding was announced to expand operations.74

Investment and Financing

To achieve the objective of universal access to energy by 2030, the Sustainable Energy for All (SEforALL) platform recommends an annual investment of USD 50 billion.75 Current levels (around USD 13 billion in 2013, focused mostly on electricity) are far from this target.76 Funding from multilateral organisations and bilateral donors continued to be the main source of financing for energy access investments (accounting for 55% of all such investments in 2013), though out of the total energy investment portfolios of major multilateral donors, the share of investment allocated to energy access and distributed renewable energy in particular, remains comparatively small.77 (→ See Figure 38.) Although public international finance for climate change and clean energy systems – one of many channels through which DRE is financed – totalled about USD 14.1 billion over the period 2003-2015, only 3% of this total (USD 475 million) was allocated to DRE-specific activities.78 Debt financing, equity and to some extent grants are the main financing vehicles in the DRE sector.

Figure 38. Overview of Multilateral Funding for Energy Access and Distributed Renewable Energy, 2012-2015

Investments from multilateral and bilateral funding sources continued to flow to DRE activities or projects in 2016. The World Bank pledged USD 625 million for a project that will install solar PV panels on rooftops around India.79 The ADB granted USD 1.1 billion in loans towards off-grid energy initiatives in India, Pakistan and Sri Lanka.80 The African Development Bank (AfDB), through the Sustainable Energy Fund for Africa (SEFA), awarded some USD 1 million to the Republic of Niger and USD 840,000 to Rwanda to promote mini-grids.81

During 2016, the Green Climate Fund (GCF) approved investments of USD 78.4 million in the Deutsche Bank Universal Green Energy Access Program (UGEAP) fund for Africa, which aims to raise USD 300 million total for DRE projects in Benin, Namibia, Nigeria and Tanzania.82 Deutsche Bank, through the UGEAP, will work with local financial institutions in an innovative structure that enables local banks to extend medium- and long-term loans to DRE companies and initiatives.83

The KawiSafi Ventures Fund for East Africa received USD 25 million in funding from the GCF in late 2015.84 In 2016, these funds (by means of equity and debt financing) were used to support d.light and BBOXX in expanding their businesses.85 Sweden donated USD 4.3 million to Uganda’s CleanStart programme, which is expected to enable 150,000 households to shift to clean energy by 2020.86

Investment in off-grid solar PV continued to grow in 2016, dominated mainly by investments in PAYG companies. (→ See Business Models section.) In 2016, some USD 223 million was raised by PAYG solar PV companies, an increase of about 40% from 2015.87 (→ See Figure 39.)

Figure 39. Investment in Pay-As-You-Go Solar Companies, 2012-2016

Lumos Global, an off-grid solar company operating in Nigeria, announced that it raised funding of USD 90 million (both debt financing and equity) during 2016 to further develop its operations – one of the largest amounts raised by a single company in a calendar year to date in the sector.88 d.light, a manufacturer of off-grid solar lighting and power products traditionally focused on cash sales, raised USD 30 million in 2016 to expand its PAYG business.89 BBOXX and Mobisol each raised USD 20 million to expand their operations in Kenya, Rwanda and Tanzania, and Off Grid Electric raised USD 18 million to expand its activities in the East Africa region.90 Although the off-grid solar market in South America is comparatively small, PowerMundo secured a grant of USD 300,000 during the year to expand its PAYG activities in Peru.91

Significant investment in mini-grids occurred in 2016, from both private and public entities. More than USD 75 million was raised for mini- and micro-grids through debt financing and equity in East Africa and South-Eastern Asia.92 The Kenyan government secured a loan of USD 37 million to install 23 solar mini-grids.93 PowerGen secured USD 4.5 million to expand its mini-grid portfolios in Kenya and Tanzania.94 In South-Eastern Asia, Fluidic Energy received USD 20 million from Asia Climate Partners to support the installation of its mini-grid systems.95 Powerhive secured USD 20 million to expand its micro-grid business in Africa and Oceania.96

Investment in clean cook stoves increased 28% (to USD 11.5 million) between 2014 and 2015, although this was still well below the high of USD 18 million witnessed in 2012 and 2013.97 (→ See Figure 40.) In 2016, the Uganda Clean Cooking Supply Expansion Project secured a grant of USD 2.2 million from the World Bank.98 A new USD 4 million fund, the Clean Cooking Working Capital Fund, awarded its first loans to Envirofit International and BioLite during the year to support the production and distribution of clean cook stoves in sub-Saharan Africa, India and Latin America.99

Figure 40. Investment in Clean Cook Stoves, 2011-2015

Alternative funding mechanisms such as crowdfunding continued to support the development of small DRE companies and initiatives, with USD 3.4 million raised in 2015.100 In 2016, Awango, the off-grid solar arm of Total (France), launched a social business and crowdfunding platform dedicated to providing access to energy.101 Crowdfunding for clean cook stoves in the private sector also is slowly gaining popularity, with early projects in Guatemala, Kenya and South Africa.102

Business Models for Distributed Renewable Energy

The most popular business models within the DRE sector in 2016 were distributed energy service companies (DESCOs) for mini/micro/pico-grids, the PAYG model for stand-alone systems, and microfinance and microcredit. Technological advances are helping to revolutionise business models for DRE systems. For example, in the developing world it is becoming increasingly common to use smart phones to pay for energy services.103

Under the DESCO, or “fee for service”, model, a customer pays regular fees for the use of a renewable energy system that is owned, operated and maintained by a supplying company. Benefits include service delivery, professional maintenance and system replacement in case of default; however, lack of ownership by users can lead to careless handling and damage.104 In 2016, the Rockefeller Foundation announced its Smart Power for Rural Development Initiative in India, which will support DESCOs such as OMC, DESI Power, TARAUrja and others to provide electricity to 1,000 villages through mini-grids.105 Also in 2016, the International Finance Corporation and the Bank of the Philippine Islands agreed to a risk-sharing facility that will provide loans and technical advice to clients investing in renewable energy and energy efficiency projects in the Philippines, helping to promote distributed energy projects, DESCOs and green building construction.106

The PAYG payment model, based on the DESCO principle, is a rapidly growing energy access solution. As of 2016, more than 32 companies operating in over 30 countries in Africa and South Asia were selling pico-solar products and SHS to more than 700,000 households in exchange for an upfront fee and regular payments through mobile money services.107 M-KOPA, the market leader, has connected some 400,000 East African households to solar power systems, installing 500 new SHS every day as of the end of 2016.108

The PAYG model, already well established in East Africa, is rapidly gaining prominence in Western Africa and Southern Asia as well. In Nigeria, by 2016, Arnergy’s PAYG service had deployed solar mini-grids across three previously off-grid villages, powering 600 homes.109 In Ghana, PEG secured financing during the year to expand its PAYG operations to Côte d'Ivoire.110 In Myanmar, Bright Lite began installing SHS in 3,000 households using the PAYG model.111

The PAYG model also is being used on a smaller scale to support the productive use of energy and clean cooking solutions. For example, Gham Power is using the model for the application of off-grid renewable energy used for water pumping and agro-processing mills, and KopaGas uses it for clean cooking.112

Under the microfinance and microcredit model, purchasers (such as households and small businesses) take out a small loan from a bank to cover the cost of DRE equipment. In 2016, Arc Finance announced that its Renewable Energy Microfinance and Microenterprise Program had benefited more than 1 million people across Haiti, Kenya, India, Nepal and Uganda through the sale of 200,000 DRE products.113 In Africa, a new microfinance project was launched in 2016 in Sierra Leone that provides microfinance-backed loans for SHS.114

In India, microfinance has become popular for the installation of solar PV. In 2016, Thrive Solar Energy partnered with WSDS Microfinance of Manipur to distribute its solar devices in the country’s rural areas.115 Frontier Markets finances and trains village-level entrepreneurs in rural areas of Rajasthan and Andhra Pradeshand on DRE applications.116 The social enterprise Boond also has relied on microfinance to disseminate solar systems, benefiting 100,000 people across Delhi National Capital Region, Rajasthan, Uttar Pradesh and other northern Indian states by 2016.117

Microfinance also has been used to address the upfront costs of clean cooking devices. In-house asset finance – loans provided to customers by energy companies, allowing them to pay on an instalment basis – enables households to purchase improved cook stoves immediately and to pay for the stoves over time based on their ability to pay. By shifting to more efficient improved cook stoves, households often reduce their cooking-related expenses, thereby increasing their ability to pay back their loans.118 Microfinance has become an important option for households in rural areas of developing countries that often lack access to finance for the upfront costs of clean cook stoves.119

Barriers and Policy Developments

The deployment of DRE systems in developing countries is subject to an array of barriers and challenges, including technical, economic, financial, political, institutional and socio-cultural factors, many of which are interconnected.120 Companies operating in the dynamic off-grid solar sector have identified the barriers that need to be overcome for the successful diffusion of DRE systems.121 The main barriers hindering expansion of the off-grid market include:

■ Policy uncertainty about off-grid electrification in national strategies, policies and regulations;

■ Lack of access to finance for both companies and consumers. A lack of working capital for companies, particularly those that provide end-user financing, may limit market development.Consumers without access to finance may be unable to pay the sometimes significant upfront costs of DRE systems;

■ Subsidies on kerosene and diesel, which affect the relative price of off-grid products compared to conventional products;

■ Fiscal and import barriers, such as high import tariffs and value-added tax (VAT) on DRE products, which may significantly increase the price of the products;

■ Lack of consumer awareness about the benefits of off-grid electrification solutions, especially during the early phase of market development;

■ Lack of product standards, which allows for the sale of low-quality and counterfeit products; and

■ Lack of a qualified and skilled workforce to support the development of the sector.122

In 2016, many countries implemented policy measures aimed at addressing these barriers and supporting DRE deployment, including dedicated electrification targets, fiscal incentives, regulations, auctions and exemptions on VAT and import duties.123 Quality Assurance (QA) frameworks also were adopted, particularly for off-grid solar products, to reduce the sale of low-quality offerings on the market.

Dedicated electrification targets, as well as specific targets for DRE technologies and mini-grids, were established during 2016. In Africa, Nigeria approved its Rural Electrification Strategy, which aims to increase the country’s electrification rate to 75% by 2020.124 Rwanda announced targets to increase access to electricity to more than 70% by 2018, out of which 22% will be through off-grid connections.125 In Asia, India announced plans for 10 GW of DRE capacity through the installation of 10,000 micro- and mini-grids by 2019, and China highlighted the importance of increasing future shares of renewable energy and distributed power generation as part of its ongoing electric power system reforms.126

Fiscal incentives to promote DRE products also were announced in 2016. In Asia, Indonesia put in place a rural electrification regulation that provides the framework and subsidies for electrifying the 12,000 villages currently without electricity in the country.127 The Indian state of Maharashtra began offering subsidies to government institutions and to the private sector for the use of off-grid solar PV, and the state of Uttar Pradesh enacted a 30% subsidy for mini-grid projects with a maximum capacity of 500 kW.128

Regulations in support of DRE were enacted during the year as well. The Nigerian Electricity Regulatory Commission released plans to finalise its mini-grid regulation, which will streamline permit and tariff procedures.129 Indonesia amended its FIT to apply new rates to distributed solar PV installations.130

In South America, Argentina launched tenders for 6,500 off-grid solar PV systems to supply electricity to an estimated 26,000 people in rural areas.131 Brazil’s 10th reserve auction also accepted 11 micro-hydro projects during the year.132 In Africa, Sierra Leone exempted all SHS from VAT and import duties.133 In Asia, Bangladesh reduced its import duty on improved cook stoves by 10%, making the stoves more cost-competitive.134 The Indian state of Madhya Pradesh enacted a policy in 2016 targeting distributed solar PV that includes tax exemptions alongside regulations for net metering.135

By the end of 2016, the Lighting Global QA programme for off-grid solar products had been adopted by Bangladesh, Ethiopia, Kenya and Nepal.136 In 2016, the Economic Community of West African States (ECOWAS) adopted a QA framework for off-grid rechargeable lighting appliances, which may be incorporated into the national legislation of member countries.137

Programme Developments

Dozens of international actors were involved in deploying DRE in 2016. (→ See Reference Tables 12 and 13.) Perhaps the most far-reaching and influential programme was the continuation of efforts to support the UN Sustainable Development Goals, of which SDG 7 focuses on universal energy access.138 The UN also continued to advance its SEforALL platform in 2016, focusing on building capacity in governments, organisations and private sector actors, and bringing various actors together to enable effective coalitions and partnerships.139 Between 2011 and 2015, more than 106 countries engaged with SEforALL, providing financial or in-kind contributions or working on tailored national strategies and investment plans.140 As of 2016, 68 rapid assessment and gap analyses had been developed to take stock of energy sector development at the national level.141

The UN Development Programme (UNDP) continued to provide grant financing for sustainable energy projects in 2016; since 1996, UNDP has provided more than USD 130 million for small, community-level projects.142 During 2016, UNDP focused efforts on policy support for DRE, including support for SHS and mini-grids through its Derisking Renewable Energy Investment (DREI) programme.143

Another major effort, Energising Development (EnDev), is an energy access partnership financed by seven donor countries: Australia, Germany, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom. In the first half of 2016, 370,000 people gained access to modern energy services through EnDev; in total, the partnership has provided efficient cooking technologies to more than 15 million people since 2005.144

In 2016, Power Africa announced USD 1 billion in new commit­ments to help double access to electricity in sub-Saharan Africa by adding 30 GW of capacity and 60 million household connections to the grid by 2030.145 This included 20 new USD 100,000 grants from the US African Development Foundation for African energy entrepreneurs in the newest round of the Off-Grid Energy Challenge.146 At the 22nd session of the UN climate conference (COP 22) in November 2016, Power Africa and USAID announced USD 4 million in new investments to eight companies that are revolutionising household solar power across Africa through the Scaling Off-Grid Energy Grand Challenge for Development.147 In addition, two new joint initiatives between the United States and India were announced in 2016 that will mobilise up to USD 1.4 billion to finance India’s commitment to universal energy access.148

The Global Alliance for Clean Cookstoves (GACC) continued to expand its operations, working with a strong network of public, private and non-profit partners to accelerate the production, deployment and use of clean and efficient cook stoves and fuels.149 As of November 2016, GACC had invested in competitive research grants to support studies across 23 countries.150 In collaboration with national alliances, GACC also invested energy in its awareness and Behaviour Change Communication (BCC) programme, which aims to increase demand for clean cook stoves in Bangladesh, Ghana, Guatemala and Uganda. Through innovative communication channels (such as radio ads, demonstrations and soap operas), the BCC reached millions of households and increased sales of clean cook stoves in 2016.151

The AfDB, through its New Deal on Energy for Africa project, aims to achieve universal access to modern energy services for the continent by 2025. Among the project’s goals are to increase off-grid generation by adding 75 million grid connections by 2025, 20 times the current total, as well as to increase access to clean cooking for around 130 million households.152 In 2016, the AfDB also launched a Green Mini-Grid Help Desk to provide online technical assistance on the myriad activities important to the business cycle of developing and operating a clean energy mini-grid.153

Also in 2016, the World Bank launched the Global Facility on Mini-Grids through its Energy Sector Management Assistance Program (ESMAP). ESMAP seeks to enhance the enabling environment for the development of mini-grids through adequate regulations, access to finance, and flexible and innovative payment models.154

The Future of DRE

The technical, economic and social potential of DRE systems remains a matter of great significance for more than 2 billion households around the world, particularly for women and young children, who spend a large portion of their time cooking or doing chores.155 The old paradigm of energy access through grid extension alone is becoming obsolete as bottom-up customer demand is motivating hundreds of millions of households to generate their own modern energy services through off-grid units or community-scale mini-grids.156 Mobile technology, PAYG business models, availability of microloans, the viability of micro-grids and falling technology prices continue to support DRE deployment worldwide. Sufficient levels of financing and optimal policy support could transform the ways in which private and public entities deliver energy access via DRE systems.