Bridging the Gap Between the Off-Grid and On-Grid Worlds

The Grid is Good

• Grid is not dirty or clean: it is agnostic to source - it is a networking tool

• Our world is increasingly networked, so why are we being regressive about energy? – personal hard drives are cheap, but that

doesn’t mean we’re rejecting the efficiency of cloud storage and large central servers

• Need to balance idealism with pragmatism

• Africa should aim for full grid connectivity

"Distributed" is good, "Discrete"? Maybe not…

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USA (30 kWh/day) Germany (10 kWh/day) Mexico (5 kWh/day) India (2.5 kWh/day)

Cost of Storage to Go "Off-Grid" (25 year NPV)

Current ($350/kWh) Future 1 ($200/kWh) Future 2 ($100/kWh)

At current battery pricing, it costs $3,500 to go off-grid if you want to use 2.5 kWh/day

At optimistic future battery pricing, it costs $1,000 to go off-grid if you want to use 2.5 kWh/day

The GRID is the biggest, cheapest BATTERY available!

Convergence is Critical

• Whatever architecture we dream up for the future of power in Africa, it needs to converge on the future energy system everywhere else in the world

• Recent historical example: Telecoms – Unified global GSM architecture means when US/Europe gets

4G it flows quickly to developing markets – If developing markets used a fundamentally different

architecture, they could not benefit from innovation in more mature markets

Off-Grid Matters!

• Enormous moral & economic need to solve immediate energy access deficits, and off-grid can move faster because it’s private-sector driven

• The key is that off-grid initiatives must be:

• Able to be integrated with the grid

• Built as part of a cohesive energy system architecture

• Off-grid and on-grid can learn from each other…

Convergence!

On-Grid & Off-Grid Should Work Together #1 : Solve the Problem Faster

• Top Down (main grid) and Bottom Up (off-grid) approaches are NOT mutually exclusive – we should be pursuing both

Solar Home

Systems

Off-Grid Micro-Grids

Grid-Connected

Micro-Grids

Main Grid Expansions

Bottom Up Top Down

Private sector involvement = SPEED

The key is that all of the pieces are built to be integrable with each other

On-Grid & Off-Grid Should Work Together #2 : Future-Proof the Energy System

Substation

Transformer

Home

Neighborhood

Municipality

1. Distributed Generation Ubiquitous

2. Distributed Storage at Home, Neighborhood, and Municipal levels (as well as Commercial)

3. Increasingly high % of renewables at Industrial scale

4. Smart metering at consumption nodes

% %

Smart Metering

What We Must Avoid • Non-convergence: where do Solar Home Systems lead, if

they aren't built for grid integration?

• Confusing the concepts of "discrete" and "distributed“: the grid is still the biggest, cheapest battery you can find.

• Misunderstanding the market: many unconnected people in Africa are closer to the grid than is realized.

How do we solve the energy access challenge for now and the future?

The “off-grid” and “on-grid” worlds need to start working together!

•Value Reflective Tariffs ($5/kWh??)

•Reliability matters

•Energy provision = gateway for other services

•Pre-pay / smart metering

•Grid networking = lower pricing and larger scale consumption (productive loads)

• Infrastructure for the long term

• Long term project financing

At the moment, there is no dialog despite both trying to solve the same problem

“Team Off-Grid”

“Team Grid”

Financing

• Subsidies have long existed in every other region

• Enormous amount of support being offered to the off-grid sector but it is highly fragmented

• Call for a more coordinated approach that builds donor-funded subsidy policies that emulate the ones that have worked in developed markets (and are still working)