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Demand Assessment for Mini-grids

From energypedia

Introduction to Demand Assessment

A critical step in the village selection process for a mini-grid is the assessment of electricity demand before its implementation. This demand assessment should in the best case assess the electricity demand and the ability to pay in 100% of households and 100% of productive user and social institutions.

Different methodologies with varying processes are used to do this demand assessment. The demand assessment should always be adjusted to national and local conditions. Thus, there is not one generally accepted methodology available. Yet, the outcome of the demand assessment for mini-grids in different countries should be more or less the same disregarding the national and local conditions. . Certain data, after all, is always needed for an accurate technical design and a financial modelling for these mini-grids. The most basic data is the peak load in kW (for load forecast, plant design) and the energy demand in kWh (for demand forecast and revenues).

Methodologies

The main methodologies assessing the demand for electricity in mini-grids are using surveys to determine the willingness to pay (WTP) of different customer groups. The willingness to pay is “the maximum amount that an individual indicates that he or she is willing to pay for a good or service” (NRECA, 2009). It can be either asked directly, which results in the ´expressed´ WTP. This ´expressed´ WTP, however, can be very subjective and unreliable because of limited knowledge on energy service or intentional misinformation by interviewees (which can lead to overestimated demand of up to 50% (RECP, forthcoming)). WTP can also be ´revealed´ through asking questions on the current energy consumption and expenditure on comparable energy services. For example, surveyors can ask the potential customers what energy sources for lighting they currently use and what they pay for these sources (e.g. kerosene, candles, batteries, etc.). This reveals how much money is available for electric lighting systems. The revealed WTP does, however, have problems to assess the demand for services (e.g. TV, refrigerator, etc.) that are not used by future customers.

An alternative assessment methodology used by Inensus (a private project developer), which delivers accurate data, is to let the potential customers sign a pre-contracts for a specified amount of electricity at a specific price and only design mini-grid generation and distribution assets for the undersigned electricity demand.

Assessing future electricity demand is always difficult and it is even more difficult to assess the growth potential for the next 10-20 years. Indications for this demand growth rates can be gained by surveying electrified villages that are similar (in terms of economic activities, disposable income, demographic characteristics) in close geographic proximity to the planned project site/s, without suppressed electricity demand and with electricity systems supplying energy at equal quality and price as the planned mini-grid. [1]

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Process

A detailed exemplary process for the demand assessment can be found in NRECA (2009): "Guides for Electric Cooperative Development and Rural Electrification". This process usually starts with the preparation for the survey, continues the surveying itself and ends with the analysis of surveys." The main steps discusses in the report are:

“1. Identify the information needed.

2. Define the variables.

3. Formulate the necessary questions for the survey.

4. Design and test the instrument.

5. Design the database.

6. Define the target population.

7. Determine the size of the survey sample.

8. Establish a sample framework. and produce a map of the project area.

9. Select a random sample.

10. Instruct the enumerators.

11. Conduct and supervise the survey.

12. Enter, revise, and tabulate the data.

13. Analyze the data.

14. Calculate consumer willingness –to pay.

15. Calculate the economic benefits.

16. Present the final results.

17. Use the results in the technical and financial analysis.” (NRECA, 2009)


Not all the possible steps are mentioned in the NRECA (2009) report. Among others, some preparatory activities, first contact guidelines and potential community involvement in the demand assessment need clarification:

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Preparation

For some demand assessments (depending on the methodology used), project developers need to estimate the project costs, the connection costs, the electricity tariffs and should have set the business model before conducting the surveys. This will allow to gather more reliable demand data. Especially as the electricity tariff design, the amount and quality of electricity available and the mode of payment highly affect the electricity demand and the reliability of payment of potential customers. It might further be useful to know the cost of locally available electric appliances in order to gauge the likeliness of their affordability.

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First Contact

As the demand assessment personnel are often the first people in the village representing the mini-grid project they have to first introduce the project, its potential benefits, challenges and costs for the villagers without generating any expectations. After this presentation the support from the village for the mini-grid project can be assessed. Also villagers need for training on electricity and the potential support to the project (in kind labor or land for generation asset, etc.) can be determined.

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Community Involvement

After a first introduction of the potential mini-grid project it might be advantageous to hire villagers on a short term basis who can accompany the trained survey team during the demand assessment and thus provide input based on local knowledge.

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Demand Assessment Output Data

The demand assessment per se should at least result in the assessment of

(1) the initial demand of electricity from all potential consumer groups, consumptive and productive (commercial, public/community, agricultural, anchor loads/industrial) consumers and the ability and willingness to pay for this electricity (which is used to calculate the maximum aggregated initial load (in kW), the total electricity demand (in kWh) that is initially consumed),

(2) the position of the loads as well as the generator in a village map and

(3) the potential for load and energy demand growth in the future.

These parameters are essential for a proper sizing of the generating plant and of the distribution grid, and thus for the cost and profitability of the mini-grid.


Demand Assessment Output Data


measured

calculated

Village Data

Name of the Village

x


District

x


Country

x


Coordinates (GPS)

x


Electrification rate

x


Distance to the national grid

x


Map of the village

x


Total number of households

x


Total number of productive users

x


Total number of public building

x


Support from Village for mini-grid (informed consent to mini-grid implementation)

x



Electricity demand

Consumptive loads

Revealed WTP / expressed WTP / pre-contract of households (number, capacity, energy demand);

x

X

Affordability of connection cost and electric appliances

x

X

Aggregated village load profile of consumptive loads (one typical day) in kW of average load for each daytime (morning, afternoon, evening, night)

x


Aggregated village load profile of consumptive loads (one typical day) in kW of average load for each hour of the day


X

Annual (seasonal) load profile in terms of average load in kW for each month of the year


X

Load growth rates through years of operation (assessed in comparable electrified villages)

(x)

x


Productive Loads (incl. commercial loads, public/community infrastructure, agricultural loads, anchor loads, micro-enterprises(domestic productive users))

Type and number of productive users present in the village

x


Productive users revealed WTP/ expressed WTP/ pre-contract

x


Productive users ability to pay for electric machines and appliances

x


Productive users energy demand and typical daily load profiles for each agricultural season,

x


Load growth through years of operation


x

Position of productive loads (on map)

x


Commercial Loads (e.g. shops, bars, milling, pressing, rice-de-husking, workshops, ice-maker, battery charging, lantern renting)

x


Public/community Infrastructure (e.g. school, medical center, public building, street lights, community drinking water pump, drinking water purification, community center)

x


Agricultural loads (e.g. irrigation pumps) - incl. questions on crops per season, number and area of irrigated fields, existing wells (type, distance to village edge, water level, well depth, well diameter), existing irrigation pumps (type, size, usage hours (per day, and days per agricultural season), local water market structure (number of privately owned, community run, rented out pumps (price per hour, for how many hours), amount of water sold (at what price)

x


Anchor loads /industrial (e.g. telecom towers, mines, green-houses, hotels, lodges)

x


Aggregated load curve (all consumptive and productive users) daily, seasonal


x

Aggregated monthly electricity sales (INR) per year


x



Additional to the demand assessment per se – further essential information (see below) can be gathered by the demand assessment team.


Generation and distribution assets

Position of generator (on map)

x


Agreement from or contract with owner of the land for the usage of the land

x


Size of the land provided

x


Agreement from village for right of way for distribution lines through the village

x


(Water rights assessment)



(Biomass availability)






Raw data on demand assessment should include mobile phone numbers of respondents (for follow up questions and random sample data quality check

x




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Recommended Reading

NRECA (2009), “Guides for Electric Cooperative Development and Rural Electrification”

This report is probably the best guide to conduct a demand assessment for rural electrification projects. It presents in detail a methodology for evaluating the feasibility of rural electrification projects (module 5) and for calculating the consumer willingness to pay for electric service and the economic benefits of electrification projects (module 6).

ProSolar - GIZ Kenya 'What size shall it be? A guide to mini-grid sizing and demand forecasting' handbook 

Mini-Grid Sizing Guidebook.pdf

Most of the content of this handbook has general validity for load assessment and system sizing. However, the methodology for the actual sizing (Chapter 2) is based on the approach of the mini-grid builder, an online tool developed by GIZ ProSolar in 2015, based on the experiences made with load assessment and system sizing of a pilot solar-hybrid mini-grid in Talek, Narok County (Kenya). It should be noted that this is just one viable approach for system sizing, some others being mentioned in Chapter 3. This handbook focuses on the more challenging case of load assessment and sizing for new mini-grids in areas without electricity. Such ‘greenfield’ sites represent the larger share in terms of rural electrification opportunities. Furthermore, as solar-hybrid minigrids are often the most viable set-up in the sub-Saharan context, the main focus of this handbook is on these systems.

For more information please click here.



Reference

  1. ESMAP, 2000