Author: fusiongrid

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Technical Overview of the Fusion Grid Pilot System

Iurii Demidov, LUT University

Fusion Grid project focuses on the provision of electricity, connectivity, and digital services to the rural areas of developing countries. Namibia is a target site for the installation which has one of the higher potentials for PV power installation in the world. Therefore, the system is designed as a PV-based off-grid. The power system is scaled to provide consumers with initial electricity usage with an uninterrupted 24/7 power supply. In addition to the users’ load power system should supply control, and measuring devices, and 4G LTE base transceiver station (BTS), which is the connectivity source. All of these devices have the main priority as it is required for connectivity, digital services, and remote monitoring and support.

Figure 1. Technical structure of the Fusion Grid pilot system.

The system is designed to be modular and easily scalable. Figure 1 illustrates the structure of a system module. The module is a self-sufficient off-grid power unit, which can be operated as an independent system or be interconnected with the other systems. It consists of 12 panels  PV array that gives 3.66kW power production and used as sun time power supply; battery storage which includes 2 li-ion batteries with 8kWh energy in total and used and night time power supply, multifunctional device that includes a battery charger, MPPT, and inverter; BTS, and control and monitoring devices. The module installs at the high consumption user, which can be a big household or small business, and is sized to supply 5 consumers. In case when the consumers’ load increases and depending on the time of major consumption, PV array or battery storage can be also increased by adding a parallel string of panels or battery.

The control system introduced to the off-grid system manages energy balance and keeps an uninterrupted power supply. Estimation of batteries lifetime, a functionality allows to predict the time of its condition, replacement, by evaluating energy storage degradation.

Digital services are another great advantage of the Fusion Grid concept. It allows consumers to track and manage their energy consumption and system state, in addition, provision of connectivity ensures remote support and monitoring.

The designed technical concept brings a lot of benefits. The combination of electricity, connectivity, and digital services provides consumers with the possibility to use the Internet and contributes to society digitization. Scalability of the system allows to size the system according to the consumers’ need and modular structure gives the opportunity to gradually establish a power distribution system, moving from single off-grid to complex electricity distribution generation power system.

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Differences between the developing and industrial countries in building electricity supply infrastructure

Samuli Honkapuro
Samuli.honkapuro@lut.fi

Electrification in most of the western countries started at the end of the 19th century. Primary driver was electrification of the industry sites, and electrification of the whole society expanded from industrial sites towards cities, and during 20th century also to rural areas. Electrification by the expansion of the grid was driven by the economy of scale in centralized generation.

However, the cost of the distributed renewable generation has decreased drastically in 21st century. At the moment, solar power is the lowest cost generation type in the areas close to equator, while in the boreal area lowest cost is achieved by wind power. Hence, economy of the scale is no more evident in the power sector. As the cost of the battery energy storages have also decreased radically, offgrid micro- and nanogrids are feasible options for electricity supply, especially in the areas with abundant sunshine.

When seeking the solutions for electrification of the rural areas in Africa, it might not be the best option to follow the process taken place over 100 years ago in Europe and North America but consider decentralized solution. Wireless communication has replaced wired technologies in connectivity solutions, and a bit similar development is taking place in electrification. Although low voltage power lines are still needed as a last-mile solution, there are feasible alternatives for building high-voltage transmission lines.

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Fusion Grid as an accelerator for entrepreneurship

Pietari Keskinen, Aalto University

Unemployment is a big problem in Namibia. One of the ways that has been proposed to alleviate it is to support entrepreneurship [1]. However, becoming a successful entrepreneur is also difficult when the resources are scarce, as they might be in many areas of Namibia. One of the issues the potential entrepreneurs face is the lack of access to needed technologies [2].

One of the Fusion Grid work packages is directly linked to promotion of entrepreneurship. Gaining electricity and access to mobile services gives the project beneficiaries resources to start new business activities, or to enhance already existing ones. We have examples of this coming directly from our test houses. One of the residents have used the electricity to power tools. He has started a small scale business of building and selling furniture, and hopes to hire employees to help him in the future. Another resident from another house creates flower arrangements needed in weddings, and also her work has become more efficient when she got lightning to her house.

However, the connection to Internet allows even more possibilities for budding entrepreneurs. Having access to trainings and better business opportunities might be even more important and efficient support for entrepreneurs than direct from government [3]. Mobile connections allow the entrepreneurs to access training materials in Internet, as well as other relevant services such as crowdfunding [4].

During the Fusion Grid project we have tried to found ways to ease the entrepreneurs access to the free services that would be available for them. We have curated a list of resources that can be easily found when the Fusion Grid WiFis are used to access Internet. We have also attempted to define the help that the potential entrepreneurs would need to access the digital services into a concrete role that could be taught to some members of the community [4].

Our research during this project have indicated that the digital services indeed have a promise for creating better livelihoods in Global South [5], and that there are business models that could efficiently use the developing connections [6]. We hope that the resources that Fusion Grid project has brought can be used productive manner to create jobs and prosperity to both the residents of our test houses but also wider into their communities.

[1] Government of the Republic of Namibia: Office of the President: Harambee Prosperity Plan. (2016).

[2] Warnecke, T.: Social Innovation, Gender, and Technology: Bridging the Resource Gap. J. Econ. Issues. 51, 305–314 (2017). https://doi.org/10.1080/00213624.2017.1320508.

[3] Brixiová, Z., Ncube, M., Bicaba, Z.: Skills and Youth Entrepreneurship in Africa: Analysis with Evidence from Swaziland. World Dev. 67, 11–26 (2015).

[4] Arvila, N., Winschiers-Theophilus, H., Keskinen, P., Laurikainen, R., Nieminen, M.: Enabling successful crowdfunding for entrepreneurs in marginalized communities. In: Proceedings of the 23rd International Conference on Academic Mindtrek. pp. 45–54. ACM, New York, NY, USA (2020).

[5] Keskinen, P., Winschiers-Theophilus, H.: Worker Empowerment in the Era of Sharing Economy Platforms in Global South. In: Proceedings of the 16th Participatory Design Conference on Exploratory Papers, Interactive Exhibitions, Workshops – PDC ’20 (2020).

[6] Keskinen, P., Arvila, N., Winschiers-Theophilus, H., Nieminen, M.: The Effect of Digital Community-Based Tourism Platform to Hosts’ Livelihood. In: Evolving Perspectives on ICTs in Global Souths – 11th International Development Informatics Association Conference, IDIA 2020, Macau, China, March 25–27, 2020, Proceedings. pp. 3–16. Springer International Publishing, Macau, China (2020).

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Bridging the digital divide with user friendly off-grid power and private LTE

The covid restrictions brutally showed that in 2020 access to digital services is a prerequisite for some of the most basic human rights – and even the richer countries experienced severe issues. According to NFER in the UK around one quarter of pupils experienced IT challenges when trying to participate in remote education. Imagine what the figure is in Africa, e.g. in Namibia, where schools were also closed and all of a sudden messaging applications served as link to the teachers.

Read the complete post by Heikki Almay via the web pages of Poutanet that carries the Nokia Kuha concept even further.

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Private investors: key players in rural microgrid development?

Henock Dibaba, LUT University

Microgrids are a suitable solution for rural Africa’s electricity challenge. However, most of the microgrid developments in the region are still carried out by government or donor initiatives. This hinders their expansion throughout the region.

Why it has been difficult to invest in rural microgrids?

For the vast majority of rural microgrid, investing without a subsides is not economically viable. This is mainly because of the characteristics of rural communities such as remote and dispersed customers, a lower income of customers and lower uptakes of electricity, which typically do not cover the costs.

How can countries improve rural microgrid development?

One way of improving rural microgrid expansion can be by inviting private investors to participate in capitalizing the sector. To enable them to do so, enabling regulation and viable business models are required. So far, private investors’ involvement in the microgrid sector remains minor; and for those that exists, they are mainly through parallel support from government or donors to reduce the risks involved.

There have been some improvements in the region; some countries already adopt enabling policies and regulations that promote private investment participation in the development of the rural microgrid. However, there should be further regional initiatives and established frameworks that create opportunities for private sector involvement.

Besides, a well-defined business model can play an important role in describing the business process and economics and can help improve rural microgrid expansion. Business model design includes technical, financial, ownership, and operational roles. Today, several business models have been designed and studied for public and commercial sector microgrids. However, many of these models focus on a specific part of the business process, such as economic benefits, success factors, or frameworks for policies and regulation. Hence, it becomes important to facilitate the business environment along with policy action to improve the private sector participation.

Who is considered a private investor? 

Investors for rural microgrid projects can be individuals, organizations, or larger firms. The type of investment can be in the form of equity, debt, or other forms of financial instruments.

Some of the common potential microgrid investors are:

– Angel investor: an individual who provides capital for start-ups or expansion, 

– Venture capitalists: equity provided by venture capital firms for startups that demonstrate high growth potential,

– Impact investors: investments made with the intention of impact on social and environmental issues parallel to financial incentives,

– Strategic investors: larger companies taking smaller equity of the same industry for seeking strategic advantages in the market, 

– Local community organization: collectively fund by local communities for investing in microgrid projects.

– Sovereign wealth funds (SWFs): investment fund owned by a state that invests in real or financial assets, 

– Other types of funds: these can be pension funds, insurance funds, foundations, and endowments.

A strategic way of financing projects

Funds for microgrid project development can be raised through different means. these can be:

– Pooled funds: are aggregating funds into a portfolio from different investors for microgrid development and operation. This can help investors to mitigate risks by diversifying and providing lower transaction costs. 

– Crowdfunding: a small amount of funding for a project from many peoples. Such fundraising is mostly made via internet platforms. It differs from pool funds since it targets small scale investors or individuals rather high net worth investors.

– Export financing: is a means of facilitating export sales of microgrid equipment to developing countries though competitive long-term funding by an export credit agency. The agencies provide guarantees and insurance for political risks for exporters and partner banks.

– Result based financing (RBF): are funds provided after achieving pre-agreed and verified results. Since RBF makes it possible to focus more on the results risk associated with ineffective use of funds can be limited. 

Are there notable companies that raised capital for microgrids?  

There have been many exemplary cases for raising funds for rural microgrids projects in Africa. Powerhive, Powergen, HuskPower and Total Eren successfully raised fuds for microgrid developments in Africa. In addition, major companies are also involved in the microgrid development projects as strategic investors including Tesla, Facebook, Schneider Electric, Engie, and ENO.

To sum up, with the right policies and descriptive business models countries could increase private investor’s confidence in microgrid development projects. There have been innovative financial tools and mechanisms which are becoming suitable solutions to tackle the previous long-existing challenges. Furthermore, project developments for microgrids should focus on communities as active stakeholders rather than seen as only a customer. This can help to create a sense of ownership among the communities.

References

1.      Power for All, Investor Position Paper: Unlocking Private Capital for Mini-Grids in Africa, https://www.powerforall.org/resources/calls-to-action/investor-position-paper-unlocking-private-capital-mini-grids-africa , [Accessed:18 -August 2020]

2.      Lockhart, E., Reber, T. and Booth, S., Financial and operational bundling strategies for sustainable micro-grid business, National Renewable Energy Laboratory, 2018.

3.      Arezki, R., and Sy, A., Financing Africa’s infrastructure deficit: From development banking to long-term investing, 2016