Mini-grids: An Alternative to SHSS in South Africa

Mini-grids have been used to power rural areas for over 20 years.  A mini-grid, (which is also referred to as a ‘micro-grid’ for a lower capacity system), can be defined as a set of electricity generators and possibly energy storage systems interconnected to a distribution network that supplies electricity to a localized group of customers.

Historically, mini-grids have used diesel to supply the fuel for their generators. However, factors such as high carbon emissions, high running costs, fluctuating diesel prices, and levels of diesel availability, have led to a demand for a more sustainable solution. In recent years, renewable technologies such as hydro, wind, and solar PV have been applied to mini-grid applications. The cost of supplying mini-grids with renewable technologies is decreasing as the technologies mature. For example, the cost of solar mini-grids are expected to fall by 60% over the next two decades.

Figure 1. Example of a hybrid mini-grid set-up

Recent research in South Africa claims that right now, mini-grids are the most effective solution to satisfying the widespread energy demand that still exists in rural areas.

Mini-grids are considered by many to be a better alternative to standalone Solar Home Storage Systems (SHSS) in South Africa. Despite the widespread penetration of SHSS in rural communities in South Africa, research shows that the deployment of these systems has had no noticeable reduction in poverty alleviation to date. It is argued that the large costs of installation yet limited capacity and usage options of these standalone SHSS create a gap in terms of energy access between grid connected and off-grid households, leading to rural marginalization.

One particular paper calls for ‘Energy Justice’ in South Africa, and highlights that, on average, SHSS are expected to produce just 7.5 kWh/month. This is a striking 666.66% less than the 50 kWh/month promised by the Free Basic Electricity (FBE) program for the poorest homes within grid coverage.

Aside from the technology, factors such as policy formulation (procedural injustice), resource distribution (distributive injustice), and spatial distribution (injustice in the recognition of population groups’ special needs) exacerbate energy injustice in South Africa.

The specific impacts of this low rate of electricity access supplied by SHSS include increased exposure of rural households to diseases such as childhood pneumonia, chronic obstructive pulmonary disease (COPD).

Unfortunately, in many cases it is not possible to deploy mini-grids, as the concentration of homes in some rural communities is not dense enough to support an efficient mini-grid system. Where they can be deployed however, mini-grids can help to close the disparity between households with a grid connection and those without, if applied using best practices. For example, privately owned mini-grids can be a success working with supportive government policies, regulations and financing, and private sector actors tend to have specialist financial and technical competence to install, operate an,d manage mini-grids efficiently. The risk is that as soon as mini-grids become cost ineffective, private actors are no longer interested. Therefore, privately managed mini-grids are susceptible to changes in regulations or fixed tariffs which lower profitability, which can result in the abandonment of projects.

A mini-grid owned by its community, due to its nature, is more resistant to changes in regulations and tariffs. However, as community owned mini-grids are often donations from charitable projects and initiatives, it is important that in addition to the physical mini-grid system, communities have access to requisite training and management resources in order to maintain the system effectively. In both private sector and community-based mini-grids, it is essential to have effective mechanisms to monitor consumption, to avoid unfair electricity usage from some members of the community. Finally, in addition to the installation of new renewable mini-grids, recent research also shows that existing isolated non-renewable diesel mini-grids can be upgraded to hybrid mini-grids moving forward by utilizing renewable energy as their primary source.


Image courtesy of Flickr. Originally published by S&S on Sept. 19, 2019.


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