Solar versus diesel off-grid systems

///Solar versus diesel off-grid systems

World Bank edited a paper analysing the potential of a scaling up of solar off grid energy in the agricultural areas of Egypt.

The researchers confirm: both Egyptian government and farmers companies could benefit of huge money saving by leaving the old power generators based on fossil fuelsThe scenario is often recurring in Africa. The metropolitan areas got a reliable and solid electricity grid but rural areas can get any access to a modern electricity grid and people must find alternatives, like fossil fuelled generators.

Today the new generation of photovoltaic off-grid solutions, like Solar Home Systems or Mini Grid, could give a profitable help to agriculture.

A recent paper by World Bank’s Energy and Extractives Global Practice Group studied an interesting case study: the potential scaling up of solar energy in Egypt, a country where diesel fuel also for generators is subsidized by government with heavy costs for public accounts and with poor relief for people living in rural areas. And, on top of that, no strong support to solar off grid solutions is laid down by the Egyptian laws.

A challenging scenario – the researchers say – with a consequence: heavy limitations to rural development in the next years.The numbers in Egypt mark a deep difference. In the country’s most populated areas towns are almost fully electrified (over 99 percent), yet the off-grid energy demand has a huge potential. A lot of areas without access to electric energy are the heart of new agricultural and tourism development and they need energy not only for small services but also for pumping water or to make the desalination units working. Solar off grid solutions are maybe the best way to bring energy in these areas but no incentives are coming from Egyptian government.

According to research, the off-grid areas are often dependent on diesel-based technologies, where the diesel fuel is in part supported by public incentives. But even so off-grid solar would be extremely economically attractive from government’s point of view, it would be a great chance to reduce the bill to subsidy fossil fuel. The World Bank’s researchers get an example: “At present, off-grid water pumping in agriculture consumes about 3.77 million tons of diesel per year. At the previous subsidized fuel price of EGP 1.8 per liter (prior to the 2016 increase in November), displacing this diesel fully with photovoltaic off grid systems could have saved the government 5.06 billion of EGP per year in diesel subsidies”. But no solar off-grid incentives are coming from Egypt, where government decided to increase the prices of diesel fuel from 1.8 EGP to 2.35 while facing a devaluation of national pound of over 50% making a solar off grid solution more profitable.

The forecasts say that diesel prices in 2019 could even rise to 12 -18 GDP per liter, making the solar off grid more and more competitive.  Also form a environmental point of view: “A single 2.5kW solar pump could provide CO2 emissions savings of 145 tons over its lifetime. Thus, if the off-grid market is scaled up, this presents a large opportunity for Egypt to reduce its national emissions.

2017-10-31T18:19:30+00:00 January 31st, 2017|Blog|