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54 Towards Scaling up of Electricity Access
tends to be less and the funds flow at a later stage of the project operation in most
cases, thereby not helping much with the financing challenge.
Finally, given that the donor and multilateral funding agencies have played an
important role in providing capital support in this area in many countries, there
remains a dependency on donor support. However, whether this can continue for long
and whether donor support would be sufficient to meet the capital needs of off-grid
electrification remain to be seen.
The regulatory challenges include the following:
55 As there can be numerous small, off-grid systems in a country, the regulatory
burden on the regulatory agency as well as the regulated entity can be huge.
Already, most of the developing countries are experiencing regulatory capacity
constraints and the additional mandate can deteriorate their performance. On
the other hand, if the business remains unregulated, consumers may not get a
good deal.
55 The pricing issue comes as another challenge. As each supplier may rely on its
own specific configuration of technology, the cost of supply can vary even when
two mini-grids are located next to one another. Will each supplier charge its own
tariff or will there be a common regulated tariff? How will this be different from
the centralized grid tariff? Who sets them and how will they be modified? Will the
tariff be remunerative for the operator? Will there be any subsidy? How will this
be accounted for? All such questions can be raised.
55 The issue of quality control, monitoring of performance, reporting of incidents,
and consumer protection will assume importance when diverse technologies,
business models, and delivery options are used. Managing these require a strong
regulatory capacity, which is missing in most developing countries.
55 Do these businesses need protection from competition? What happens when the
grid is extended? How does the investor recover costs or how will his investment
be protected? Will inter-connection of mini-grids to the national grid require a
new set of electricity regulation?
As an introduction to the scale up and replication issues, (Bhattacharyya and
Cook 2013) did not provide answers to these issues but these pertinent issues highlight
the challenges that exist in scaling up and replication of off-grid electrification.
Another study analysed the scaling up and replication issues related to off-grid
electrification (Krithika et al. 2015). The study carried out an extensive literature review
and considered a number of off-grid projects/programmes. The main conclusions of
the study include the following:
55 First, financial assistance/support for energy enterprises or project implementing
entity emerges as a critical factor. The type of financial assistance should depend
tends to be less and the funds flow at a later stage of the project operation in most
cases, thereby not helping much with the financing challenge.
Finally, given that the donor and multilateral funding agencies have played an
important role in providing capital support in this area in many countries, there
remains a dependency on donor support. However, whether this can continue for long
and whether donor support would be sufficient to meet the capital needs of off-grid
electrification remain to be seen.
The regulatory challenges include the following:
55 As there can be numerous small, off-grid systems in a country, the regulatory
burden on the regulatory agency as well as the regulated entity can be huge.
Already, most of the developing countries are experiencing regulatory capacity
constraints and the additional mandate can deteriorate their performance. On
the other hand, if the business remains unregulated, consumers may not get a
good deal.
55 The pricing issue comes as another challenge. As each supplier may rely on its
own specific configuration of technology, the cost of supply can vary even when
two mini-grids are located next to one another. Will each supplier charge its own
tariff or will there be a common regulated tariff? How will this be different from
the centralized grid tariff? Who sets them and how will they be modified? Will the
tariff be remunerative for the operator? Will there be any subsidy? How will this
be accounted for? All such questions can be raised.
55 The issue of quality control, monitoring of performance, reporting of incidents,
and consumer protection will assume importance when diverse technologies,
business models, and delivery options are used. Managing these require a strong
regulatory capacity, which is missing in most developing countries.
55 Do these businesses need protection from competition? What happens when the
grid is extended? How does the investor recover costs or how will his investment
be protected? Will inter-connection of mini-grids to the national grid require a
new set of electricity regulation?
As an introduction to the scale up and replication issues, (Bhattacharyya and
Cook 2013) did not provide answers to these issues but these pertinent issues highlight
the challenges that exist in scaling up and replication of off-grid electrification.
Another study analysed the scaling up and replication issues related to off-grid
electrification (Krithika et al. 2015). The study carried out an extensive literature review
and considered a number of off-grid projects/programmes. The main conclusions of
the study include the following:
55 First, financial assistance/support for energy enterprises or project implementing
entity emerges as a critical factor. The type of financial assistance should depend
