There are now more than 100,000 mini-grid stations across Africa, these little power generation stations are serving to bridge Africa’s rural power gap and Tanzania is no exception.
While the country leads Africa in rural electrification efforts, there is still huge gap between demand and supply and the solution to cover it lays in mini-grids, small power stations that generate power at localized remote points.
To date, Tanzania has well over 100 mini-grids that provide electrical power to over 250,000 people in remote corners of the country. These mini-grids provide close to 200 MW using biomass, fossil fuel and solar systems as well as hybrids of these energy sources.
Tanzania’s national policies also support adoption of renewable energy technologies. Off-grid electrification using renewable energy technologies can offer a power solution to rural and remote areas. These efforts are inline with the global Sustainable Development Goals.
SDG number 7 calls for governments to set in place mechanism that will ensure that by 2030 not only will majority of their population have access to modern energy services but also to double the use of renewable energy to meet this demand.
Even though Tanzania’s national grid produces over 1,500MW through hydro and natural gas power stations and reaches over 9 million people, this is still a tip of the iceberg for a country of over 56 million people.
To complicate the equation further, majority of this population (80%) lives in rural areas where the national grid does not reach. It is difficult to distribute the central power line to remote areas partly due to terrain but also due to the priority given to city centers where more economic production takes place.
However, with continued efforts to mechanize agriculture as the country heads to middle income status, rural electrification is not optional any more, it’s a basic necessity to industrialize the agriculture sector. A report titled, Accelerating Mini-grid Deployment in Sub-Saharan Africa: Lessons from Tanzania, says it is actually more cost-effective to use a decentralized approach that is to use mini-grids to provide rural electrical solutions.
This is how Tanzania has become a regional leader in mini-grid development. The country has even established an independent Rural Development Agency and Fund, the latter to administer the former to finance rural electrification efforts using both the central line and mini-grids to reach even the remotest most isolated communities.
Thanks to the use of mini-grids, Tanzania’s rural economies are on the rise and that means increase in financial inclusion as well with that, the general welfare of rural communities. Other than agriculture industrialization, these mini grids power schools, health clinics, small businesses and homes too.
Funding Rural Electrification
Tanzania has, for over a decade now, been developing legal frameworks to encourage adoption of rural electrification solutions. In 2008, Tanzania developed what was called the Small Power Producers Framework, a cost effective solution to power its villages. Thanks to this financial mechanism, the set up of mini-grids almost doubled in the following few years.
However, the framework initially covered only biomass and hydro power development but as technology brought new possibilities in the name of solar and wind power generation farms, Tanzania’s parliament also evolved and revised the legal framework in 2015 to include solar and wind solutions.
Power distribution in Tanzania is under TANESCO but energy generation in all its forms is under the Energy and Water Utilities Regulatory Authority (EWURA). It is under EWURA’s visionary leadership that Tanzania, was able to increase its set up and use of mini-grids.
EWURA served to simplify the licensing and registration requirements for the establishment of mini0grid power houses. As a result, investors were encouraged to venture into the lucrative and largely untapped sub-sector.
EWURA achieved this through what it termed as ‘third generation mini-grid framework’ which opened doors for investors by simplifying what was otherwise on one hand unregulated and on the other hand stifled bottlenecked process.
Under this framework mini-grids were allowed to be set up in multiple locations using a single license for the production of any amount above 1MW. It also allowed registration for mini-grids that maintained the use of the same technology but for production of electricity below 1 MW.
This format also allowed for compensation to mini-grid owners when the main grid finally reaches the isolated locations. It is these legal bridges that allowed for Tanzania to power its rural areas. What was previously envisioned as an insurmountable hurdle, became doable thanks to the establishment of mini-grids.
This is where Tanzania’s regional neighbors can learn and adopt a simple solution to their own rural electrification problems. Waiting to get the central national line to all rural areas is not a viable approach, at least not for the near future. Yet, rural areas are sleeping economic giants with the potential to give Africa and the rest of the World, food security, boost national economies, slash down poverty levels and generally improve the well-being of millions of people.
Remember, in most African countries, over 80 percent of the population lives in rural areas, so any poverty reduction efforts serve no good if they are directed to city centers and their vicinity, poverty reduction must focus on rural areas and power generation and distribution is at the center of poverty reduction making mini-grids the practical solution to address this Sustainable Goal.