Cost efficient and reliable rural electrification schemes for South Mediterranean countries based on Multi user Solar hybrid micro-Grids. The CRESMED project example: an integrated approach. Stéphane POUFFARY Head of the International Expertise and Energy Management Unit ADEME ­ French Environment and Energy Management Agency 500 route des Lucioles ­ 06560 Valbonne ­ France tel: +33 (0) 4 93 95 79 55 stephane.pouffary@ademe.fr Charlotte COLLEU Project officer - International Expertise and Energy Management Unit ADEME ­ French Environment and Energy Management Agency 500 route des Lucioles ­ 06560 Valbonne ­ France tel: +33 (0) 4 93 95 79 25 charlotte.colleu@ademe.fr<br/><br/>In<br/><br/>Southern<br/><br/>and<br/><br/>Eastern<br/><br/>Mediterranean<br/><br/>Countries<br/><br/>(SEMC),<br/><br/>decentralised<br/><br/>electrification is still an exception and is seldom taken into account in the energy planning. An emblematic counter-example is the Moroccan Global Rural<br/><br/>Electrification Programme (PERG) which has clearly and systematically included, on the basis of a cost-effective calculation, Rural Decentralised Electrification (RDE) as an alternative to grid extension for remote areas. In these countries, RDE is mainly based on diesel generators or solar home systems (SHS). The first alternative implies relatively low investment but the operation and maintenance costs are very high which often results in only few hours of daily service especially if we consider that, in remote areas, access to fuel is irregular. This is one of the reasons why solar home systems are preferred despite their higher upfront costs. However, they only provide service for a very limited number of appliances (mainly for lighting), collective applications are limited and they are not sufficient for the stimulation of economic activities. If most interviewed users of SHS declare being satisfied, the idea that &quot;solar is for the poor&quot; is also widespread. As an alternative, and taking advantage of successful European experiences, the CRESMED project aims at promoting in the SEMC the development of locally adapted Multi user Solar hybrid Grids (MSG) combining a high renewable<br/><br/><br/>contribution, a storage system (typically battery) and a back-up generator. The project is supported by the European Commission in the frame of the INCO 6th Framework Programme. It began in January 2006 for a 3,5 year duration. The consortium is gathering SEMC partners - Afrisol and CDER (Morocco), CDER (Algeria), LSES (Lebanon) and NERC (Jordan) - and European ones - TTA (Spain) project coordinator, ADEME, ARMINES and Transénergie (France), the Fraunhofer Institute (Germany) and SASSO (Italy). After having presented MSGs clearly recognized assets that can positively affect the social acceptance and cost-effectiveness of the RDE systems, we will present why an integrated approach is necessary in order to adapt the technology to the local country context looking for a balance between standardisation (cost reduction and an easy model implementation) and a tailored service provision (satisfaction of the needs and impact on development).<br/><br/>The MSG contribution to RDE social acceptance and cost-efficiency Combining solar and other locally available Renewable Energy Sources (RES) with storage and back-up generator presents several advantages. In general, when dealing only with RES the installation has to be sized according to the less favourable period of the year in order to ensure a 12 month service. As a consequence, during large periods, the system is oversized. Regarding a MSG system, the diesel backup can complete the RES contribution when needed. The RES rate is then optimized, energy production is more efficiently used and related investment costs are reduced. The system is also more flexible as it can withstand consumption picks or an increased demand, collective uses can be taken into account more easily and a 24 hour service can even be envisaged. Besides, compared to a diesel generator alone, operation and maintenance costs are reduced as well as the environmental impact (noise, air pollution, GHG emissions). Those elements have positive impacts on both social acceptance - by providing a better service - and system cost efficiency which are two key elements to foster a virtuous circle and ensure a scale up effect for decentralised power generation systems based on RES.<br/><br/><br/>Developing adapted MSG schemes in the SEMC: the necessity of an integrated approach A sustainable development of such systems also requires a deep reflection about the market, the local context, the financing models and tariff scheme, the demand to be covered, the used devices and the Management, Operation and Maintenance (M&amp;O&amp;M) schemes. All those elements will influence the MSG sizing and design and that is why the CRESMED project clearly adopts an integrated approach taking into account social, economical, financial and technical aspects.<br/><br/>Contrasted potential national markets The first phase of the project has led to an evaluation of the needs for energy services in the SEMC partners with a focus on rural areas. The national situations have revealed to be very contrasted. In Morocco, in 2006, the electrification rate was only of 89% despite a spectacular increase thanks to the PERG programme. Approximately 4 000 villages were still to be electrified and, although they may not all apply for MSG, PV decentralized systems potential was estimated to 10 MW over the next five years. In Algeria, the electrification rate is much higher (98%) but large parts of the country -approximately 1300 villages representing 64 000 households- are still out of reach by the national grid or the southern diesel power stations. In both cases remaining concerned areas have no or little electricity experience and thus not clearly well identified needs (highest value given to the first kWh). The situation is different in Jordan where the electrification rate is of 99,8% and only isolated farms and households remain without electricity. In Lebanon, national grid coverage is similar but the national utility is unable to cover the demand which results in regular programmed blackouts and in emergency cuts, in particular in rural areas. Facing this situation, private diesel generators, often supplying &quot;neighbourhood&quot; microgrids, have multiplied without any legal status and provide approximately 10% of the national electricity. Introducing MSGs could be convenient to lower the high operation and maintenance costs of those minigrids, especially in a context of rising diesel prices. Lack of awareness and high upfront costs are however two strong barriers and the implementation of public support schemes would imply to conceive a legal status for those micro-grids.<br/><br/><br/>Financing models, estimation of the needs and the definition of an appropriate tariff scheme: key elements for MSG design and sizing Access to electricity is recognised in all Mediterranean countries as a key element for socioeconomic development. Filling the development gap between urban and rural areas by an equal access to basic infrastructures is a sustainable way to prevent rural exodus and the growing concentration of the population in few urban areas. This general framework explains why the overcosts of remote areas electrification programmes often benefit from incentives mechanisms such as subsidies, cross subsidies in the tariff schemes, soft loans and tax credits that must be taken into account in the economic calculation during the planning phase. Avoided fossil fuel consumption and associated (more or less) burdensome state subsidies should also be more systematically taken into account in the choice of the electrification model. In Algeria, the objective of an equal access to electricity services prevails and the existing RDE programmes aim at supplying an equivalent standard to a conventional grid connection by installing a high total power (an average of 640 W per household in South Algeria allowing the use of refrigerators, fans, etc.). The Moroccan approach, trough the PERG, is somehow different as the service provided depends on the user ability to pay. The offer ranges from 50 W (lighting and radio) to 200 W allowing the use of a refrigerator. In Morocco, for what concerns the so-called &quot;fee for service&quot; scheme, a private operator covers the investment, installs the system and ensures the service and the maintenance for 10 years. The investment has then to be cost-effective after taking into account the existing economic incentives. Promoting such an approach, one of the main non technical issues to be tackled by the CRESMED project is the definition of an appropriated tariff scheme guaranteeing cost effectiveness, meaning in general to cover at least M&amp;O&amp;M and equipment replacement. To be synthetic, some divergent parameters have to be balanced. First, the tariff must be universal (if an isolated house of the village is to be equipped with a SHS rather than connected to the MSG, the household should pay according to a unique tariff scheme). Then, the system has to take care of small users with an appropriate tariff but has also to attract big potential consumers in order to ensure the overall economic balance and favour the development of productive applications.<br/><br/><br/>Besides, it needs to be in adequacy with the user's ability to pay which must not be underestimated as conventional energy sources such as batteries, candles or kerosene generate also high costs. This is crucial as the sizing of the system will depend on the energy to be provided which is related to the acceptable fee to be paid by the users as well as a correct estimate of the demand. The energy demand estimation can be performed through analysing the consumptions of similar villages connected to the grid, by referring to standard estimations or through questionnaires. The last option is however preferable as it reflects more the energy demand concern and associated services rather than just consumed kWhs. A demand management approach is then fully relevant in order to guarantee a service quality while minimizing the investment costs thanks to an optimal system sizing. In the CRESMED project, for instance, a list of available energy efficient appliances has been established for each country. Besides, existing algorithms used for European MSGs to limit the energy consumption are being further developed in order to be easily understood by the user, to keep the consumption within the tariff contracted and to avoid an overuse of the system that could impact negatively its life expectancy. The limitation also allows users to have their contracted energy amount assured every day.<br/><br/>Adapting MSG schemes to SEMC local context: technical and management aspects The CRESMED consortium has elaborated a MSG general design and<br/><br/>implementation manual. It presents the different grid configurations state of the art as well as devices characteristics and estimated costs, installation and operation general requirements and sizing examples. A software for the distribution network configuration design is also under development. These are universal tools but a large part of the CRESMED project is dedicated to the adaptation of devices and management schemes to the SEMC local context. This is the objective regarding MSG lifetime which is conditioned to reliable and robust devices (power conditioner, energy dispensers, small hydroelectric turbines, wind turbine). Taking advantage of past experiences, an important part of the CRESMED project is aiming at improving such devices behaviour under high temperatures (up to 60° ) and dusty conditions as well as at minimising maintenance needs. c<br/><br/><br/>This is of the utmost importance as the implementation of appropriate maintenance schemes, anticipation of equipment replacement and dedicated financing will avoid failure in the electrification process conducting to a bad reputation regarding RES. The CRESMED project intends to tackle this issue through two approaches: a technical one and an organisational one. On the technical side, adapted solutions for communication, monitoring and remote control through satellite of the MSGs are being developed. The automatic integration of operational data into a single management software will allow an unique operator to manage several MSGs with one computer (&quot;virtual power plants&quot; approach). This will alleviate the load of maintenance in remote areas while guaranteeing a regular follow-up of the system. On the organisational side, models for the implementation and operation of MSG systems in the target countries have been developed. The models cover the potential role of private and public investors, energy service companies and targeted community members during the whole project duration: definition and design phase, building phase, technical and commercial operation and maintenance, final evaluation and dismantling. Two basic models, the &quot;utility&quot; and the &quot;community&quot; ones can be adapted from one region to another according to the targeted number of systems and consumers as well as the possible local involvement of private companies, private and public institutions and agencies.<br/><br/>Conclusion The CRESMED approach aims at developing appropriated devices and technical schemes for MSG implementation in SEMC. It also proposes a set of useful tools, recommendations and check lists in order to ensure a sustainable implementation of the model. This integrated approach is necessary to ensure social acceptance and cost effectiveness and also to create a favourable context for a wide development. The results of the project will be disseminated among the rural electrification actors, through trainings and on the project website (http://project.cresmed.org/). A field test in a Moroccan village will also be the opportunity to confront the theoretical and technical outputs to a concrete application from planning to operation phases.