Digitalisation & solar in emerging markets


Around one billion people – mostly concentrated in South Asia and Sub-Saharan Africa – still live without access to electricity, and for hundreds of millions more, the electricity is simply unreliable or too expensive.8 The systemic lack of access to sustainable, secure and affordable electricity is deterring social and economic development in emerging economies,9 and leaving economic opportunities untapped. The number of people gaining access to electricity has been steadily increasing over the last years, but efforts need to greatly accelerate if the world is to meet the Sustainable Development Goal 7 and ensure access to affordable, reliable, sustainable and modern energy for all by 2030. One way to ensure access to electricity for all is by extending the grid in places where the grid does not exist or where the grid is simply too weak and unreliable. However, extending grid-based electricity has important hurdles including connecting to an already weak transmission and distribution grid, insufficient power generation capacity to meet the electricity demand, high costs of extending the electricity network to remote areas, or simply a lack of affordability to pay for the electricity.

Solar-based mini-grids
Off-grid electrification includes the deployment of minigrids. A mini-grid (a very small version of which is called microgrid) is a network of small-scale electricity generators, and possibly energy storage systems, that supplies electricity to a localised group of customers. Mini-grids are small networks that can be independent (autonomous) of a nearby grid or can be connected to the main grid. Mini-grids are being rapidly deployed to customers where the utility grid is absent or has failed. Globally, at least 19,000 mini-grids installed in 134 countries provide electricity to about 47 million people, most of them in rural areas. Emerging markets in Asia have the most mini-grids installed today, while Africa has the largest share of planned mini-grids.

Demand forecasting and Demand Side Management in off-grid contexts
Forecasting of power demand plays an essential role in the electric industry, as it provides the basis for making decisions in power system planning and operation, both for utility-scale and off-grid solutions. In rural and remote areas in Africa, Asia-Pacific, Latin America and the Caribbean, forecasting demand is especially challenging because new customers often lack
historical data about their electricity consumption. In the context of mini-grids – where integrating renewable energies from variable and distributed resources is a complex piece of work – digitalisation helps developers to reduce operational costs and thereby optimise their projects to be much more effective for the consumers.15 For both new (greenfield) and hybridized existing projects (brownfield), digital technologies can be adopted throughout different phases of decentralised rural electrification projects. For example, mini-grid sizing can be optimised by relying on more accurate load profiles: that can be achieved using remote monitoring and modern control system equipment like smart meters. Already existing systems can be optimised through Demand Side Management (DSM).


Operation & Maintenance in remote areas
Operation and maintenance (O&M) of solar PV systems in remote areas – often off-grid systems and mini-grids – come with various challenges due to several factors. First, off-grid projects are sometimes funded through various grants, only covering the installation costs but
not long-term O&M. Second, rural populations who are beneficiaries of off-grid installations can in many situations not afford O&M costs, especially when it comes to replacing spare parts and components. Third, the necessary technical skills to execute quality O&M services are not always available in rural areas where off-grid PV systems and microgrids are located. These issues can impact the long-term health of off-grid solar systems and mini-grids negatively, which is a problem on multiple levels. On the one hand, the lack of (quality) O&M services leads to higher operational costs, lower energy output and a lower return on investment due to increased failure rates of systems and components. On the other hand, regular failures of solar systems create distrust in local communities and decreases public acceptance of the energy transition.

Pay-as-you-go for solar
The off-grid solar sector has been at the forefront of leveraging technological innovation and digital solutions to reach as many customers as possible. A new and increasingly common digital solar business model in frontier markets is pay-as-you-go (PAYGo) solar. Digital innovation has created a sweet spot – delivering excellent products and services for customers, enabling low-cost operations for companies, and protecting assets and revenue streams for investors.The business model allows customers to pay for their off-grid solar product in small installments. Particularly in East Africa, companies utilise the ubiquity of mobile phones to allow customers to pay their regular instalments with mobile money, e.g. M-Pesa in Kenya. In the second half of 2018, GOGLA members and affiliates reported sales of almost one million PAYGoenabled products.


Grid-connected solar PV is now being deployed in many regions of the world, in some more
competitively than other. Companies active in these regions include a mix of new local entrants, global players from European or other mature market developers, or semi autonomous subsidiaries of global players. In any case, best practices tested in more mature solar markets such as Europe are being imported, adapted, or even replaced by more suitable
techniques, depending on past experiences in comparable climates, grids, and design requirements. Not all solutions readily exist though. Some emerging solar markets face challenges that previously only existed in very selected regions, and not at the same scale. To cite a few, advanced grid support functionalities by solar plants have been championed, challenged and greatly improved following deployments in weak grids such as islands or countries with a less stable or saturated grid infrastructure. PV module soiling faces new extremes in India and the Middle East and requires digitally-optimised detection and wash
schedule optimisation techniques, and new cleaning solutions requiring less water.

Smart data analytics and machine learning to improve asset performance
Asset operators and owners need to manage more sites demonstrating diverse characteristics and needs, with limited personnel and budget. Managing portfolios reaching 1 GW or more in size is a challenge in any circumstance – even more so when the portfolio is fast increasing and the team is relatively new. Emerging markets may not yet have all the skilled workforce they need on hand to make thorough assessments of their assets. Thus, they benefit significantly from readily available data analytics tools to identify PV module or inverter failures, prescribe
performance-based corrective actions, and identify low performers.

Digital asset management
With the professionalization and globalisation of solar investors and investment portfolios, service quality expectations are changing and rising rapidly, which puts increasing requirements on asset managers – both in mature and emerging markets. As opposed to operation and maintenance (O&M) service providers, who take care of the solar power plant on a technical level, asset managers deal with the commercial and financial management of a solar investment. They manage a company – or a portfolio of Special Purpose Vehicles (SPVs) – rather than a power plant, often across different geographies, with different regulatory and environmental challenges and with a variety of different business models. Asset managers cover topics such as accounting and financial reporting, cash-flow management, debt management, insurance management, Power Purchase Agreement (PPA) management, SPV
representation, O&M contractor supervision, land leasing and any other statutory or regulatory obligations arising from the operation of solar power plants.


Grid intelligent solar
Through intelligent plant controls paired with solutionoriented plant sizing/layout, solar can be used to create cost-effective flexible capacity that supports supply and demand balancing. This is increasingly interesting in markets with less stable or saturated grid infrastructure. Utility-scale solar power plants support grid reliability by providing features such as ramping capability, voltage support, fault ride-through and other services, and in some cases, more effectively than conventional power plants.


Blockchain-based solutions to digitalise, decentralise and decarbonise electric grids worldwide
Multinational corporations provide a growing source of demand for new renewable energy projects across the globe. Corporate buyers, however, face significant challenges finding and procuring renewable energy from (preferably new) projects. These challenges are amplified in emerging markets, where buyers also lack trust in the credibility of available options. Corporate buyers want to modernise renewable energy procurement such that finding, buying and proving purchases of electricity generated from renewables in any market where they and their suppliers have operations provides the comparable user experience of booking a flight or hotel. In other words, buyers want something better compared to how renewable energy markets today depend on third-party brokers who match buyers with procurement options meeting their diverse requirements and manual updating of spreadsheets and market-specific tracking systems based on any transactions.


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