Dependable electric service accessibility has a huge impact on economic welfare and activities. Still, 800 million people, especially in Sub-Saharan Africa, do not have access to electricity. Also, many countries face the problem of unreliable power supply. The demand for reliable electricity is increasing along with the need for a fast and huge transition to a clean and sustainable supply to deal with changing climatic conditions.
The past decade witnessed a decline in the production costs of wind and solar energy by 90%. However, the distribution and transmission costs are still high. The increase in renewable energy assists the chances for the production of renewable energy. This increase in renewable energy will support the generation of distributed RE if the main grids’ extension is an optimum option, especially in remote locations that have small populations. This will lead to a rise in mini-grids along with standalone storage systems and solar PV. All of them are cost-effective solutions that can give universal access.
A mini-grid is a collection of electricity generators and energy storage systems attached to a distribution network supplying electricity to local customers. A Solar Photovoltaic or PV system indicates an automatic solar system generating power that can charge battery banks during the day to be used at night.
For a transition to such solutions, there is a huge demand for mini-grid regulation which describes issuing of licenses, cost-oriented tariff setting, and the service quality for electricity provision using the construction and deployment of private sector mini-grids. Also, governments require modern institutional models as well as policy frameworks to incentivize and mobilize local communities and the private sector to invest in the electrification process through standalone systems and mini-grids. Agencies with enough capacity to plan and coordinate rural electrification have to be established.
Consistent innovation in the field of energy efficiency solutions and renewable energy and storage at the utility scale is another noticeable trend in the field of energy infrastructure. Innovations are happening in both financing mechanisms and technologies in the field of energy efficiency. The increased data analytics use and dispatch of smart power increase the innovations in solar and wind energy, enhancing the field of renewable energy resources.
Both World Bank Group and PPIAF are helping governments in their efforts to eliminate risks in project investments by implementing financial and regulatory incentives as well as credit improvements with RE procurement programs. It will increase the appeal of the market for global and local investors, a growing competition that will gradually reduce production and storage costs.
Green hydrogen will be playing a significant role in the energy infrastructure algorithms in the future. However, to scale up green hydrogen, more reductions in the cost of renewable energy to support clean electrolysis are required. It is also gaining importance as a replacement for hydrogen derived from fossil fuels.
Even after many digital and technological advancements, several electricity companies cannot make use of the changing trends in the energy service sector as utility reforms are still lagging in different developing countries. However, PPIAF is offering its support to governments to solve these issues.