Renewable Microgrids: A Cornerstone for Solving Development and Climate Challenges

Feb. 26, 2015
Two birds, one technology? Renewable microgrids can be a cornerstone for addressing development and climate challenges in the energy sector, says Arnaud Henin of Gommyr Power Networks.

Arnaud Henin, Gommyr Power Networks

Two birds, one technology? Renewable microgrids can be a cornerstone for addressing development and climate challenges in the energy sector, says Arnaud Henin of Gommyr Power Networks.

One of the main challenges in addressing climate change is how to limit global emissions while enabling countries and their people to achieve critical development goals.  The tension is acute between economic growth and development on the one hand, and the environmental issues of moderating emissions and climate impact on the other.

The situation is further complicated as climate change itself is considered a critical development challenge that is expected to disproportionately impact emerging markets whose people are already more vulnerable.

Indeed, this trade-off between development and climate is one of the main points of contention in global climate negotiations.

The costs of adapting to changing climate, the costs of worsening global inequality and the costs of reducing emissions add up to mind-boggling sums with critical implications for all parties and countries in the negotiations. The emerging view is to focus on green development pathways that limit emissions (eg. contribute lower emissions than a business as usual alternative) and are climate-resilient (eg. that are adapted for future climate conditions).

However, at the local initiative level, the trade-offs between development and growth often still exist, as the greener options are in many cases more expensive.  Preserving forests, using biofuels, and promoting electric vehicles can all be worthy objectives, but will typically have economic implications at the local level, especially on the short term.  Without the underlying economic incentives, initiatives typically fail or lead to perverse results.

There are, however, certain technologies that can achieve both development and climate goals.  Renewable-focused microgrids present a critical and currently underutilized example.

Microgrids are small localized power networks that include supply (electricity generation) and demand (electricity use) as well as the interconnection between the two.  A microgrid network can either be connected to a larger power grid or be completely autonomous.  Renewable microgrids generate a significant proportion of their energy from local renewable sources, such as photovoltaic panels, wind turbines, biomass or small hydro plants.

Renewable microgrids and distributed renewable generation can and do empower local communities…

Renewable microgrids and distributed renewable generation can and do empower local communities and businesses in both developed and emerging markets by giving them full control of their power.

Power is critical for social and economic development. Having a reliable and sustainable local power supply that can be relied on for the long-term can have huge impacts on growth, income and quality of life. Renewable microgrids also provide secondary benefits for power end users such as noise reduction from less generator use, lower fuel storage needs, simpler logistics and less transportation needs, as well as possible job creation for local operations and maintenance of the microgrid.

Underlying economics offer the biggest incentive for deploying renewable microgrids.  In remote regions the cost of extending the main power grid is prohibitive, forcing the communities and businesses in these areas to generate their own power.  In these cases, the typical power sources are diesel generators – power sources that are both expensive and high emitting.  Renewable technologies can typically generate power at less than half the cost of diesel generation and is cost competitive even with battery storage.

The technology is available and ready, the costs are extremely competitive and the need is clear. Renewable microgrids are just beginning to be deployed at scale in many regions of the world, and the sector is forecast to grow rapidly in the period to 2020.

What is needed at this stage is a coordination across the layers of stakeholders, multilateral organizations to local governments and officials, policymakers to provide the regulatory and legal frameworks — and with financial institutions to fund those initiatives that will wholeheartedly support the deployment of renewable microgrids as a solution to both urgent climate and development needs.

Arnaud Henin is a founder and managing director of Gommyr Power Networks, a company focused on the business, economics and financing of renewable focused microgrids and distributed energy projects.  

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