Exploring the nexus of mini-grids and digital technologies. Potentials, challenges and options for sustainable energy access in Sub-Saharan Africa

Access to clean, reliable and affordable energy is one of the key challenges for many countries in Sub-Saharan Africa. This is particularly the case in rural and remote areas which are often not connected to the national main grid. Mini-grids are expected to play an important role in providing access to sustainable and reliable energy in these areas. On the other hand, this report argues that mini-grids also need to meet a set of key requirements to become future-proof and contribute to the achievement of the United Nations Sustainable Development Goals (SDGs). Mini-grids should foster the integration of renewable energies. They should provide for equitable and affordable electricity costs and reliable electricity supply. They should be sensitive to the specific local context and foster the development of productive uses. Moreover, they should be flexible and adaptable to changing conditions, such as new technologies, increasing demand and the arrival of the main grid, and account for transparency and consumer protection. Finally, mini-grids should be designed in a way which reduces their ecological footprint as far as possible.

Over the past years, the mini-grid sector has seen an increase in the use of digital technologies while at the same time digital innovations transform the socioeconomic landscape in Sub-Saharan Africa. In light of these developments, the report explores how digital technologies could be applied to mini-grids to help meet the requirements mentioned above. The study identifies two levels of application for digital technologies in mini-grids: 1) the level of technical functionalities and system balancing which includes generation and storage, distribution and control as well as demand side management; and 2) the level of the mini-grid value chain, which includes finance, planning and design, operation and maintenance, customer management and the productive use of electricity. Across these application areas, digital technologies have the potential to provide solutions that enable more efficient and time-saving processes, reduce costs as well as improve services for the consumer. However, the use of digital technologies in mini-grids in rural Sub-Saharan Africa also poses new challenges and risks, in particular with regards to privacy and data security, and requires a high level of awareness for the creation of user-centric technologies. If the potentials are exploited and risks mitigated, digital technologies could contribute to achieving future-proof mini-grids that serve sustainable development in rural Sub-Saharan Africa. However, many of the potentials that could unfold through the integrated use of digital technologies in mini-grids have not yet been tapped into. Technical issues, even internet access, do not appear to be limiting factors for the application of digital technologies in mini-grids. Regulatory, economic and socio-cultural framework conditions play a much more decisive role. Against this backdrop, policy-makers, donor organisations and technology developers should collaborate to create favourable framework conditions and new impetus for a purposeful use of digital technologies in mini-grids. Amongst others, policy makers should provide long-term plans for grid extension so that mini-grid developers are able to evaluate the extent to which it makes sense to incorporate digital technologies. Policy-makers should further provide incentives and subsidies for projects serving the testing of digital solutions, develop suitable regulatory frameworks and support the development of technical standards and quality criteria. They also should develop legal frameworks for data security and consumer protection. Donor organisations could contribute to the meaningful use of digital technologies in mini-grids by including technical requirements for appropriate digital features in mini-grid tenders and incentivizing or even requiring that data from the mini-grids they fund is shared. They should further foster the collaboration between communities, innovators and local researchers, and support the creation of knowledge about the effects of digital technologies in mini-grids, for instance on costs, long-term sustainability, consumer satisfaction and the creation of productive uses. Lastly, companies and technology developers should always put consumer needs at the centre of technology development and consider the specific local contexts. They should engage in jointly developing standards that benefit the whole sector, embrace using open-source software and share their data and experiences from successes and failures.