A New Standard to End Energy Poverty

By Kisa Giebink
July 14, 2021

Okra is on board for the journey to provide >1000kWh/year to every man, woman and child.

A study by the Rockefeller Foundation and the Energy for Growth Hub proposes a new standard to define energy poverty; they’ve set a new threshold for extreme poverty at 1000 kWh/year/capita consumed in and outside the home. This includes 300 kWh/year/capita for residential consumption. Despite this, the currently recognised threshold for energy poverty remains at 50 kWh/year/capita for rural populations – barely enough to power a mobile phone and a few lightbulbs year-round.

Many of the current off-grid electrification strategies will also likely fail to bump people above this newly proposed poverty line.

But let’s take a step back – what’s the challenge? Why can’t we just extend the national grid? Let’s recap some of the key obstacles to energizing the last-mile.

A significant portion of unenergized people around the world live in extremely isolated rural off-grid communities. In Cambodia, visiting an Okra mesh-grid involves driving down a bumpy dirt road for many hours and sometimes, depending on the season, a long boat ride across a lake will follow. The difficulty of working in this kind of last-mile terrain makes national grid extension economically unviable. In the Philippines, government research indicates that there isn’t a feasible way to grid connect >50% of the 2 million off-grid households, many of which are located on remote islands.

In addition, households in rural off-grid communities are often arranged in an irregular manner, with some households clustered together in small pockets, and others spread out. The picture below shows a typical off-grid village with houses expanding outwards, sometimes 100 meters from the nearest house.

Most housholds in last-mile off-grid villages are dispersed in an irregular manner

This type of community layout, which is seen across the globe in last-mile areas, also makes it infeasible to deploy traditional off-grid electrification solutions like mini/microgrids; the cost of installing enough transmission infrastructure to reach every household is prohibitively expensive. This is why most centralized AC microgrids operate at a loss – especially in last-mile communities.

— For the rest of this blog, we will use the term “microgrid” to refer to centralized AC grids that utilize a star topology for distribution. “Minigrids” employ the same distribution architecture and are also commonly used to energize rural areas, hence the comparative statements made against microgrids are effectively relevant to minigrids as well.

The average cost of an AC microgrid can be up to $1,500 per connection. Once you take into account the additional operational costs over a 10 year period, the average revenue per household to just pay off a microgrid connection in 10 years would typically amount to greater than 20% of total household income.

Microgrids are an elegant solution, and they have made admirable progress towards energizing peri-urban areas, but they’re simply not fit to energize last-mile off-grid communities.

Solar home systems (SHS) have also been popularized over the last decade as an adequate technology to energize the last-mile. They’ve typically been deployed under subsidy programs which have enabled mass roll out in countries like Kenya (see KOSAP) where 80% of electrification is attributed to SHS (250,000 SHS deployed).

SHS typically provides 20Wp to 200Wp and can even power energy saving television sets. The most commonly deployed SHS is 50Wp with total available energy of about 50kWh/household/year which falls well below the energy poverty targets of 300kWh/year/capita. In addition, SHS are often deployed without any after-sales service or maintenance which results in many households reverting to darkness after a couple of years.

When our staff are in the field, they often encounter broken or unused SHS. We wonder whether these communities are being counted as ‘energized’ and written off as progress towards SDG 7. This isn’t the kind of affordable, reliable and sustainable energy access that will uplift last-mile communities.

We need a solution that can deliver adequate energy at an affordable cost so that project developers are financially incentivized to and eradicate energy poverty across the globe.

At Okra, we believe energy access means access to the modern economy and the opportunities that come with it. That’s why we developed tech to support mesh-grids: a new approach to last-mile electrification that leverages the decentralized nature of solar panels and batteries. Mesh-grids are built by installing our Pod at each individual household, along with solar panels and batteries, and then interconnecting neighbouring households into power-sharing networks that pool energy from multiple systems and maximize resource utilisation.

Our mesh-grids can deliver 657 kWh per household/year average energy availability. And by leveraging the mesh, individual households can access 2600kWh / per household/year – all households have a maximum power output of 1200W – enough to power multiple productive appliances simultaneously. In combination with appliance financing (via our Harvest platform), communities powered by Okra’s have unlocked productive and impactful use of energy.

Any effort made towards energizing underserved men, women and children, deserves praise, but the only way we can accelerate towards global energy access targets by 2030 is to match the market with the appropriate solution. Doing otherwise is analogous to taking 1 step forward and 10 steps backward as end-consumers grow increasingly frustrated and distrusting of service providers. Microgrids, SHS and mesh-grids all have their place in the market – so let’s make sure we’re blending these solutions appropriately.

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Kisa works in project development at Okra, helping our partners to leverage finance and innovative business models to scale up their reach. Her background is in renewable energy investment in North America and the Mekong region. She holds a Masters of Management in Finance from McGill University.