Solar rural electrification is 30% cheaper than cost of grid expansion

Our rural folks continue to live in darkness despite the abundance of sunlight. 

According to the World Bank Data Sheet, one of the key issues in Africa’s Energy Sector is Low Access and Insufficient Capacity. Ghana as of 2012 has an electricity access rate of about 64.1%.  This means many folks in the rural segments are without electricity.  On rural electrification, the primary objective of the policy is to expand access as rapidly as can be afforded in a cost effective and environmentally friendly manner. The rural electrification policy includes a full menu of options which include on-grid and off-grid, mini grids, non-thermal and renewables.

It is important that strategies for rural electrification be renewable energy sources because Africa is extremely vulnerable to climate change and the continent has more solar radiation than any other continent on earth. 

Studies have revealed promising potential for this resource in Ghana. According to the SWERA Ghana Project report, Wa, the capital of the Upper West region, has the highest level of solar irradiation (5.524 KWh/m2-day) across the country. May is the month with the highest solar irradiation (5.897 KWh/m2-day), with August recording the lowest measurement (4.937kWh/m2-day) in Wa. Akim Oda on the contrary is the location that records the lowest radiation (4.567kWh/m2-day) measurements across the country. The highest measurement in Akim Oda was recorded in the month of April (5.176kWh/m2-day) and the lowest in August (3.802kWh/m2-day). This estimate tells that sunlight will provide useful solar energy for about 4 to 6 hours per day because during the early hours and late hours of the day the angle of the sun’s light is too low.

It is worth noting that only 2% of the total surface area of Ghana will give an average of 924 GigaWattHours of Solar Energy annually. 

In the tables below, let us examine closely the technical and financial potentials of a mini-grid Solar Power for a 250 household rural community which is about 18 to 20km to the National Power Grid extensions. The mini grid design is has a battery backup which is able to store power during the day which is consumed at night, the light is distributed using poles, these poles usually each carry a street light on it which pass through a village over a short distance then to household. In such areas, solar is not only a cost effective alternative for these communities, but also an effective method for improving health and quality of life in the developing world. 

For the unnamed community selected, the load demand per day for each household is 1.21kWh (Total Household Demand 302.5kWh/day) whiles the total demand for the Non-Household is 26.59kWh/Day.

Table 1. SIZING AN SPV SYSTEM OF 80-100 KW CAPACITY WITH STORAGE – 250 HOUSEHOLDS

* Cables, Poles, Joints, Installation Materials, Support and Storage Structures…etc

** O&M System Cost PV Mini-grid, and it’s generally 12% of CAPEX

*** Electrical losses is suggested generally to be 3% of total electricity generated.

**** Salvage value suggested to be 10% of total capital cost.

Assumptions

Interest on loan = 7%

Loan repayment period = 25years Equal payments of (principal + interest)

Battery life is 7 to 8 years. To be changed about 3 times in 25years

Table. 2

Financial Analysis of the Installed SPV System for the Community

Table. 3 CONSTRUCTION COST ESTIMATION OF MEDIUM VOLTAGE AND LOW VOLTAGE – NATIONAL GRID EXTENSION.

A community 18 – 20km from the Nearest Grid Station

Source: National Electrification Scheme (NES) Master Plan Review (2011-2020) pg 49-52

** Average inflation is assumed to be 13% from 2011

Glaringly, it is evident that extending electricity to a rural community (250 household) of about 18 to 20km to the National Power Grid extensions through Solar Rural Electrification costing (CAPEX) $761,700 USD is less cheap than doing a National Grid Extension to the same community which costs $1,199,420 USD. A savings of about $400,000 USD (30% of the cost of National Grid Extension) can be made on such a project for a rural community. With a payback period of 14.8years and (LCOE) a per kWh charge of $0.347 USD, this project is Economically Viable International Standards.

The increasingly acknowledgement of renewable energy as the sustainable energy and the current tariff hikes in our thermal based electricity sector should be enough motivation for extensive Solar energy sources research in Ghana and Africa as a whole. 

Current efforts to mitigate DUMSOR, necessitates extensive renewable energy research and investment in Ghana. 

Providing reliable cost-effective power for rural villages is a long way to go, this will improve their standard of living for our future generation.

More attention should be given to Solar Energy, because Ghana has the Potential.

Author: Maxmillian Kwarteng

SPS-3SiL 

mkwarteng@3sil.com.gh 

odeneho21@hotmail.com 

0203369968