Key Issues

The development of renewable energy mini-grid systems is inexorably tied to policies that promote rural electrification, and it should not be considered in isolation.  The most critical issue is to avoid policies supporting rural electrification that are biased towards grid extension and to promote policies that support the implementation of mini-grid (or stand-alone) systems when these are more cost-effective.   The experience from countries that have successfully implemented renewable energy mini-grid systems can be summarized in the following key issues:

• Defining the roles of mini-grid and grid-extension options:  rural electrification planning frameworks and criteria to determine when to use grid extensions vs. mini-grids
• Developing regulatory frameworks for mini-grids:  cost-effective tariff schemes, sustainable and equitable subsidies, quality of service standards, and licensing for renewable energy mini-grids
• Establishing effective institutional structures:  national institutional structures for rural electrification and local institutional structures for renewable energy mini-grids
• Determining the least-cost mini-grid technology and optimum system size:  diesel generators, renewable energy technologies, or hybrid systems?
• Supporting capacity building for business management, system design and operation 

 

Lessons learned compiled by the NREL Village Power team based on developing a set of village power pilot projects¹ reinforce the key issued highlighted above.

¹ Renewables for Sustainable Village Power, L. Flowers, et. al., NREL/CP-500-28595, November 2000.