Publication:
Investing in Mini Grids Now, Integrating with the Main Grid Later: A Menu of Good Policy and Regulatory Option

Loading...
Thumbnail Image
Files in English
English PDF (755.13 KB)
2,548 downloads
English Text (59.17 KB)
48 downloads
Date
2019-05
ISSN
Published
2019-05
Editor(s)
Abstract
Mini grids can economically supply electricity to people in areas that the main grid is unlikely to reach soon. Mini grids can be quickly deployed and are increasingly price-competitive against traditional sources of energy. They can attract private financing and operate without subsidies when allowed to charge cost-recovery tariffs. Moreover, the arrival of the main grid does not mean that the investment in mini grids will be wasted: their generation and distribution assets can generally be reused in an integrated system. The key is to define—in advance—technical standards and commercial options for integration once the main grid arrives.
Link to Data Set
Citation
World Bank Group. 2019. Investing in Mini Grids Now, Integrating with the Main Grid Later: A Menu of Good Policy and Regulatory Option. Live Wire;No. 2019/97. © World Bank. http://hdl.handle.net/10986/31772 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Report Series
Live Wire
Other publications in this report series
  • Publication
    Decarbonizing Ammonia and Nitrogen Fertilizers with Clean Hydrogen
    (Washington, DC: World Bank, 2025-03-12) World Bank
    Synthetic fertilizers are essential to sustaining the world’s population, but their production is responsible for 1.8–2.4 percent of global greenhouse gas emissions. Clean hydrogen holds growing potential (amid falling costs) to decarbonize fertilizer production. Hydrogen produces synthetic ammonia, a building block of most fertilizers. With the fertilizer market as a reliable off-taker, this shift could support the overall expansion of clean hydrogen, even as it boosts global food security. However, this transition may require adjustments, including changes in fertilizer types and modifications to existing subsidy schemes.
  • Publication
    Mini Grids for Underserved Main Grid Customers
    (Washington, DC: World Bank, 2024-06-21) Tenenbaum, Bernard; Greacen, Chris; Shrestha, Ashish
    Can mini grids help to solve the problem of poorly served main grid connected communities A mini grid is an electricity generation and distribution network that supplies electricity to a localized group of customers. Mini grids can be isolated from or connected to the main grid. To date, most mini grids in Sub-Saharan Africa have been built in electrically isolated rural villages not connected to the main grid. Based on broad experience working with mini grid programs in more than 20 low- and middle-income countries and five detailed case studies, the authors offer observations and recommendations about mini grids in general and a new type known as “undergrid mini grids” being used in Nigeria and India to serve poorly served communities.
  • Publication
    Mobilizing Commercial Financing to Scale Up Energy Efficiency in the Public Sector
    (Washington, DC: World Bank, 2025-01-22) Limaye, Dilip; Singh, Jas; Lee, Selena Jihyun
    Scaling up energy efficiency is critical to the energy transition—and the public sector is a good place to start. Programs in public buildings, in particular, can introduce new models and thus help shape markets. Given the limits of public financing against huge investment needs, countries must unlock commercial financing. The first steps are to adopt international best practices and select financing mechanisms suited to local policy and regulatory frameworks, public agency characteristics, implementation barriers, and the maturity of financial markets.
  • Publication
    Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants
    (Washington, DC: World Bank, 2024-06-06) Tavoulareas, Stratos
    Finding fuel sources to replace coal in power plants is crucial in the march toward decarbonization. Biomass and ammonia are two options offering significant potential. Both can be used with coal or alone in newly constructed facilities or in modified power plants. Relatively new power plants are good candidates for modification. While work is underway demonstrating the feasibility of each material, there are logistical challenges to address, particularly in the case of ammonia.
  • Publication
    Net Zero Energy by 2060
    (Washington, DC: World Bank, 2024-06-07) Doczi, Szilvia
    In the long term, both energy security and decarbonization in the region will depend on substantial increases in national climate ambitions. Achieving those increases will depend, in turn, on equally substantial increases in investment in low-carbon technologies, accompanied by timely policies and regulatory measures. The World Bank has developed a whole-energy-system model, data driven, technology rich, and bottom-up, to project optimal least-cost pathways for Europe and Central Asia to achieve a net zero energy target by 2060. This Live Wire is based on a report published in March 2024 (World Bank and ESMAP 2024).
Journal
Journal Volume
Journal Issue
Collections

Related items

Showing items related by metadata.

  • Publication
    From the Bottom Up : How Small Power Producers and Mini-Grids Can Deliver Electrification and Renewable Energy in Africa
    (Washington, DC: World Bank, 2014-01-15) Tenenbaum, Bernard; Greacen, Chris; Siyambalapitiya, Tilak; Knuckles, James
    Most Sub-Saharan African countries try to promote rural electrification through both centralized and decentralized approaches. This guide focuses on the decentralized approach, providing practical guidance on how small power producers and mini-grid operators can deliver both electrification and renewable energy in rural areas. It describes four basic types of on- and off-grid small power producers, as well as several hybrid combinations that are emerging in Africa and elsewhere. The guide highlights the ground-level regulatory and policy questions that must be answered by electricity regulators, rural energy agencies, and ministries to promote commercially sustainable investments by private operators and community organizations. Among the practical questions addressed is how to design and implement retail tariffs, quality of service standards, feed-in tariffs, and backup tariffs. The guide also analyzes the regulatory implementation issues triggered by donor grants and so-called top-up payments. It provides a primer for nonengineers on interconnection and operating standards for small power producers connected to main grids and isolated mini-grids. It analyzes whether the option of small power distributors, used widely in Asia, could be employed in Sub-Saharan Africa, and addresses two often ignored questions: what to do “when the big grid connects to the little grid” and how to practice light-handed regulation. Finally, the guide considers the threshold question of when to regulate and when to deregulate tariffs. All these implementation issues are presented with specific ground-level options and recommendations rather than just general pronouncements. In addition, to make the discussion more useful to practitioners, the guide provides numerous real-world examples of successful and unsuccessful regulatory and policy actions taken in Kenya, South Africa, and Tanzania, as well as Nepal, Sri Lanka, and Thailand. Many of the decisions are inherently controversial because they directly affect the economic interests of investors and consumers. The guide highlights rather than hides these real-world controversies by drawing upon candid comments of key stakeholders—national utility managers, mini-grid operators, government officials, and and consumers.
  • Publication
    Technical and Economic Assessment of Off-grid, Mini-grid and Grid Electrification Technologies
    (Washington, DC, 2007-12) World Bank
    This report is part of the Energy and Water Department's commitment to providing new techniques and knowledge which complement the direct investment and other assistance to electrification as provided by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The purpose of this report is to convey the results of an assessment of the current and future economic readiness of electric power generation alternatives for developing countries. The objective of the technical and economic assessment was to systematically characterize the commercial and economic prospects of renewable and fossil fuel-fired electricity generation technologies now, and in the near future. The study was designed to cover the widest possible range of electrification applications faced by energy services delivery and power system planners, whether supply is provided through grid networks or stand-alone or mini-grid configurations. The assessment was conducted using a standard approach and is presented in a consistent fashion for each power generation technology configuration. The assessment time frame includes current status and forecast development trends over the period 2005-15, while the economic assessment considers a range of typical operating conditions (peak, off-peak) and grid configurations (off-grid, mini-grid, interconnected grid) for various scales of demand. The technology characterization reflects the current stage of commercialization, including indicative cost reduction trends over 10 years. This study is limited in several ways. First, it is time-bound. It does not reflect new technology developments or new secular trends that have emerged since the terms of reference were formalized. Secondly, it is bound by the available literature. Thirdly, the results are generalized and represent averaging over what are important specific conditions (although the uncertainty analysis accounts for this somewhat).
  • Publication
    Ensuring That Regulations Evolve as Mini Grids Mature
    (World Bank, Washington, DC, 2019-05-24) World Bank Group
    As they mature, mini grid sectors evolve from marginally viable competitive entrants to potential monopoly providers of essential services. In early stages, overly stringent regulation can choke the sector’s growth. In later stages, however, closer regulation is usually necessary to protect customers. Regulators can manage the regulatory evolution required of this sector by defining its growth phases and spelling out, in advance, the regulations that will apply at each stage.
  • Publication
    Policy and Governance Framework for Off-grid Rural Electrification with Renewable Energy Sources
    (Washington, DC, 2008-10) World Bank
    The objective of the study was to develop an adequate policy and governance framework for off- grid rural electrification by: assessing the effectiveness and key socio-economic factors and governance structures in present off-grid electricity supply schemes; and exploring and testing sustainable decentralized service-delivery models for future large-scale off-grid rural electrification in Pakistan. This study has attempted to develop a policy and governance framework for implementing sustainable large-scale off-grid rural electrification in Pakistan. This was done by assessing the effectiveness of existing policy, governance, and institutional frameworks in actual implementation of off-grid supply (OS) projects in the country; examining regional and global models for off-grid supply which have worked; and exploring which combination of these experiences might work to scale-up access in Pakistan to reach the roughly 7,000 villages which are not likely to be supplied by grid electricity in the near future. Pakistan has in place, with the 'policy for development of renewable energy for power generation' (2006), a policy framework for renewable energy development, with a particular emphasis on attracting the private sector investments. One of the goals of the policy is to 'help ensure universal access to electricity in all regions of the country.' The RE policy spells out the financial and fiscal facilities to be provided to private sector investors who wish to set up off-grid and dispersed RE power generation. However, experience in Pakistan as well as globally shows that OS for rural electrification, to any large scale, will be unlikely to attract investment from the private sector without support from the government.
  • Publication
    Technical and Economic Assessment of Off-grid, Mini-grid and Grid Electrification Technologies : Annex 1. Detailed Technology Descriptions and Cost Assumptions
    (Washington, DC, 2007-12) World Bank
    This report is part of the Energy and Water Department's commitment to providing new techniques and knowledge which complement the direct investment and other assistance to electrification as provided by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The purpose of this report is to convey the results of an assessment of the current and future economic readiness of electric power generation alternatives for developing countries. The objective of the technical and economic assessment was to systematically characterize the commercial and economic prospects of renewable and fossil fuel-fired electricity generation technologies now, and in the near future. The study was designed to cover the widest possible range of electrification applications faced by energy services delivery and power system planners, whether supply is provided through grid networks or stand-alone or mini-grid configurations. The assessment was conducted using a standard approach and is presented in a consistent fashion for each power generation technology configuration. The assessment time frame includes current status and forecast development trends over the period 2005-15, while the economic assessment considers a range of typical operating conditions (peak, off-peak) and grid configurations (off-grid, mini-grid, interconnected grid) for various scales of demand. The technology characterization reflects the current stage of commercialization, including indicative cost reduction trends over 10 years. This study is limited in several ways. First, it is time-bound. It does not reflect new technology developments or new secular trends that have emerged since the terms of reference were formalized. Secondly, it is bound by the available literature. Thirdly, the results are generalized and represent averaging over what are important specific conditions (although the uncertainty analysis accounts for this somewhat).

Users also downloaded

Showing related downloaded files

  • Publication
    State of Social Protection Report 2025
    (Washington, DC: World Bank, 2025-04-07) World Bank
    Social protection goes well beyond cash transfers; it includes policies and programs that bridge skill, financial, and information gaps, aiding people in securing better jobs. The three pillars of social protection—social assistance, social insurance, and labor market programs—support households and workers in handling crises, escaping poverty, facing transitions, and seizing employment opportunities. But despite a substantial expansion over the past decade, 2 billion people remain uncovered or inadequately covered across low- and middle-income countries. Drawing from administrative and household survey data from the World Bank’s Atlas of Social Protection Indicators of Resilience and Equity (ASPIRE), the "State of Social Protection Report 2025: The 2-Billion-Person Challenge" documents advances and challenges to strengthening social protection and labor systems across low- and middle-income countries, analyzing the evolution of expenditure, coverage, and adequacy of support. This report details four policy action areas governments can embrace to maximize the benefits of adequate social protection for all: extending social protection to those in need; strengthening the adequacy of social protection support; building shock-proof social protection systems; and optimizing social protection financing. The report discusses how the path of reforms will depend on country context, capacity, and fiscal space. The rising frequency of shocks and crises calls for major investments in the adaptability and preparedness of social protection and labor systems. Amid a world in transition, social protection is more important and necessary than ever.
  • Publication
    Detox Development
    (Washington, DC : World Bank, 2023-06-15) Damania, Richard; Balseca, Esteban; de Fontaubert, Charlotte; Gill, Joshua; Kim, Kichan; Rentschler, Jun; Russ, Jason; Zaveri, Esha
    Clean air, land, and oceans are critical for human health and nutrition and underpin much of the world’s economy. Yet they suffer from degradation, poor management, and overuse due to government subsidies. "Detox Development: Repurposing Environmentally Harmful Subsidies" examines the impact of subsidies on these foundational natural assets. Explicit and implicit subsidies—estimated to exceed US$7 trillion per year—not only promote inefficiencies but also cause much environmental harm. Poor air quality is responsible for approximately 1 in 5 deaths globally. And as the new analyses in this report show, a significant number of these deaths can be attributed to fossil fuel subsidies. Agriculture is the largest user of land worldwide, feeding the world and employing 1 billion people, including 78 percent of the world’s poor. But it is subsidized in ways that promote inefficiency, inequity, and unsustainability. Subsidies are shown to drive the deterioration of water quality and increase water scarcity by incentivizing overextraction. In addition, they are responsible for 14 percent of annual deforestation, incentivizing the production of crops that are cultivated near forests. These subsidies are also implicated in the spread of zoonotic and vector-borne diseases, especially malaria. Finally, oceans support the world’s fisheries and supply about 3 billion people with almost 20 percent of their protein intake from animals. Yet they are in a collective state of crisis, with more than 34 percent of fisheries overfished, exacerbated by open-access regimes and capacity-increasing subsidies. Although the literature on subsidies is large, this report fills significant knowledge gaps using new data and methods. In doing so, it enhances understanding of the scale and impact of subsidies and offers solutions to reform or repurpose them in efficient and equitable ways. The aim is to enhance understanding of the magnitude, consequences, and drivers of policy successes and failures in order to render reforms more achievable.
  • Publication
    Global Economic Prospects, June 2024
    (Washington, DC: World Bank, 2024-06-11) World Bank
    After several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.
  • Publication
    Global Economic Prospects, January 2025
    (Washington, DC: World Bank, 2025-01-16) World Bank
    Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.
  • Publication
    Europe and Central Asia Economic Update, Fall 2024: Better Education for Stronger Growth
    (Washington, DC: World Bank, 2024-10-17) Izvorski, Ivailo; Kasyanenko, Sergiy; Lokshin, Michael M.; Torre, Iván
    Economic growth in Europe and Central Asia (ECA) is likely to moderate from 3.5 percent in 2023 to 3.3 percent this year. This is significantly weaker than the 4.1 percent average growth in 2000-19. Growth this year is driven by expansionary fiscal policies and strong private consumption. External demand is less favorable because of weak economic expansion in major trading partners, like the European Union. Growth is likely to slow further in 2025, mostly because of the easing of expansion in the Russian Federation and Turkiye. This Europe and Central Asia Economic Update calls for a major overhaul of education systems across the region, particularly higher education, to unleash the talent needed to reinvigorate growth and boost convergence with high-income countries. Universities in the region suffer from poor management, outdated curricula, and inadequate funding and infrastructure. A mismatch between graduates' skills and the skills employers are seeking leads to wasted potential and contributes to the region's brain drain. Reversing the decline in the quality of education will require prioritizing improvements in teacher training, updated curricula, and investment in educational infrastructure. In higher education, reforms are needed to consolidate university systems, integrate them with research centers, and provide reskilling opportunities for adult workers.