Opportunity
Somaliland has a bitter history of conflict – a war of independence, civil war, and ongoing battles over disputed territory – that has contributed to a woefully inadequate energy system. It has been shaped by short-term and local objectives, typified by privately operated, diesel-based mini-grids. While they require limited infrastructure investment, the running overheads are high. Much like diesel-generated electricity, solar photovoltaic and wind energy can be provided via minimal local grids: regional and national transmission and distribution infrastructure isn’t necessary. Through this project, we sought to work with local energy operators, who were well-established on their ‘turf’, to develop the capacity to implement renewables installations that would provide electricity at substantially lower cost.
Solution
The ESRES programme set out to develop an appropriate policy and regulatory framework. We were responsible for day-to-day programme management, developing regulatory standards and providing technical assistance to private operators as well as the Government of Somaliland. The programme had two phases.
In phase one we successfully ran a pilot project, creating hybrid diesel and solar PV mini grids. This gave the project team essential experience to launch the Somaliland Renewable Energy Fund, to reduce private operators’ financial risk during the construction and start-up phases of renewable power projects. We granted initial investment to six private operators. However, grants came with conditions: they had to commit to lowering their retail price to customers.
We linked the local operators with international engineering, procurement and construction contractors, who could install the PV panels and associated infrastructure, and train operatives to carry out repairs and maintenance. Creating this local-global partnership further reduced the risk profile of the programme, helping the operators move swiftly through project delivery and commissioning to operation and revenue-earning.
In phase two we expanded the programme, supporting three larger operators to achieve the same. These provided more renewable energy than all six projects from phase one combined, and at a lower price per kWh.
In addition to 5.7MW total installed generating capacity, the programme has delivered 3.1MWh of battery storage to provide grid stability and optimise supply.
Outcome
For a very poor country there is still a long way to go before electricity becomes widely available and affordable. However, ESRES has made a sizeable contribution. It increased renewables’ share of Somaliland’s energy mix from 1% to 15%. Providing renewable energy instead of using diesel generators is saving approximately 9000t CO2 annually.
ESRES connected 85,000 households and small businesses, and reduced the cost by more than a third, to $0.65/kWh. Bringing electricity to remote communities has improved opportunities for small businesses, education, health and safety.
ESRES has shown that implementing hybrid mini grids in fragile environments can be achieved successfully. The programme has provided valuable lessons that can be applied on projects in vulnerable and fragile locations the world-over – bringing the benefits of clean energy to government, private operators and society alike.