THE “GOLDILOCKS” SCALE FOR RURAL POWER DISTRIBUTION

According to Kelly, extending centralised power grids into rural areas entails huge upfront costs, and network redundancies, presenting challenging economics for national utilities. On the other hand, household level power generation (i.e. solar home systems), while rapid to deploy, ignores potential economies of scale and is expensive for the consumer.

For much of rural Africa, the “just right” solution is megawatt-scale utilities of one to 20 MW capacity, serving tens or hundreds of thousands of customers. Here’s why:

• Distributed mini-utilities avoid the wait for expensive, governmentfunded transmission projects to bring the grid closer to rural communities. By generating and distributing power on a local basis, rural households can have access to energy sooner and more reliably. • Megawatt scale projects are large enough to attract infrastructure investors to provide loans for project construction at long tenors and relatively low interest rates, allowing for affordable end-user tariffs. • Most of the energy can be distributed and fully consumed with lower voltage networks that connect rural farming communities and towns. • Fully renewable, baseload generation from hydropower can be counted on at all hours of the day, making commercial and industrial use more viable, and can be supplemented by intermittent sources and storage