According to the February 2021 “Unlocking Africa’s Mini-Grid Market” report, 60% of Africa’s population lives in rural areas. Only 5% of this rural population has access to modern electricity services, without which sustainable development cannot take place.
In most cases, these rural customers have low power demand, which presents a challenge to mini-grid developers due to the fact that projects have high upfront investment costs and a need to generate sufficient revenues to service loans and create modest returns for investors. This creates a chicken and egg scenario: low electricity demand disincentives investments in the power systems that are a prerequisite to the same sustainable, pro-poor development that has been proven to gradually drive up energy demand.
The African Minigrid Developers Association’s (AMDA) Benchmarking Minigrids in Africa report says that generation costs make up 45% of the costs of setting up an isolated mini-grid consisting of solar PV panels, batteries, backup diesel generators, and other relevant assets. Battery storage costs are a major factor in projects’ CAPEX costs. Operating a backup diesel generator during prolonged periods of overcast weather or in times of higher demand further pushes up the operational costs. Estimates put the median levelized cost of electricity (LCOE) for mini-grids globally at approximately $0.66/kilowatt-hour. This means that developers need to set tariffs that are often much higher than the retail tariffs charged by national utility companies to fully recover the costs of their investments.
MyHydro, an innovative, transformational, water-to-wire utility investment firm for Africa, wants to bring down the cost of power for Africa’s off-grid communities. MyHydro is banking on the fact that hydroelectricity is still one of the cheapest forms of power in Africa, and indeed globally. Of equal importance, hydropower projects can generate electricity around the clock if the water source being used is also continuous and the project is appropriately designed.
MyHydro is partnering with US-based turbine manufacturer and hydropower developer Natel Energy, which is backed by Breakthrough Energy Ventures, Schneider Electric Ventures, and Chevron Technology Ventures, to bring Natel’s fish-safe Restoration Hydro Turbine to Africa. The Restoration Hydro Turbine is a modular low-head turbine, meaning it operates with a hydraulic head in the range of 2 meters to 20 meters and at capacities of up to 3 megawatts (MW) per unit. When scaling up is required, multiple units can be installed at the same site, or in a cascade on the same river.
This turbine’s modular design opens up a whole new range of opportunities close to major load centers such as small villages, commercial farms, mines, factories, and towns that are close to rivers. Modularity enables designs to be replicated across multiple sites, decreasing design costs and increasing scalability, which drives down investment costs and allows MyHydro to deliver more cost-effective electricity to its customers. Rivers featuring small 6- to 8-meter rapids can now be utilized to produce electricity, supplying consumers who have no access to the power grid with reliable and renewable energy. Off-grid game lodges and tourist resorts that are near rivers can also benefit from the MyHydro and Natel collaboration. Natel’s RHT is fish-safe and compact, ensuring that installations minimize environmental disturbances, and unlike diesel generators, produce no noise or air pollution.
More about Natel’s next-generation 1.5-megawatt Restoration Hydro Turbine (RHT):
- High performance: >90% hydraulic efficiency
- Compact: The RHT’s compact, cavitation-less design reduces excavation requirements and enables up to 40% cost savings on civil works when compared to conventional low-head turbines
- Fish safe: The RHT is fish-safe, allowing 99% of fish to pass through the turbine safely, reducing the need for costly and complex fine fish screens and thus project CAPEX and OPEX costs.
- Flexibility: The RHT is available in a wide variety of well-known and convenient form factors including axial pit and bulb turbines, radial inflow / open-flume intake turbines, Saxo / z-type turbines to provide greater flexibility for both greenfield projects and the retrofitting of existing water infrastructure (i.e., non-powered dams, irrigation weirs, etc.)
- Modular and scalable: Most conventional turbines employ custom, site-specific, bespoke designs that increase per unit turbine costs and slow manufacturing, development, and construction timelines. Natel’s modular turbines decrease turbine manufacturing and design costs by harnessing economies of scale. The same economies of scale that drive manufacturing costs down can also be extended to key civil design components to help reduce civil design and engineering costs when deployed across multiple sites, thus reducing overall project costs and increasing scalability.
MyHydro’s distributed hydroelectric plants can be built in about a year once all project approvals and licenses have been granted. As part of its development process, MyHydro analysis incorporates a 50-year historical view of river flows, as well as guidance from local communities to ensure that its plants will generate enough electricity to meet the off-taker’s expectations.
MyHydro is launching in the Democratic Republic of Congo (DRC) in 2022 as its first market. The DRC has been chosen due to its excellent hydrology and the poor state and lack of capacity of its power system. MyHydro is working with the DRC’s Rural Electrification Agency to expand access to electricity in the country. There are a lot of rivers in Africa that have good flow rates in places such as Guinea, Angola, Uganda, South Africa, Angola, Zambia, Zimbabwe, and many more.
As the world races to decarbonize, mini- and micro-hydropower plants could help replace small ailing thermal power plants which are now close to the end of their lifecycle. One of the main challenges in this area is the fact that some state-owned power utilities are defaulting on payment, putting IPPs into serious financial trouble. Some other bumps along road include currency disputes, such as the recent currency dispute between the utility company and an independent power producer in Zimbabwe.
There could be another attractive market, however, targeting private off-takers such as data centers and blue chip firms that are looking to increase the penetration of renewable energy sources in their operations. Some of these firms, such as Amazon, are already incorporating off-site solar plants. Amazon recently installed a 10 MW solar plant in the Northern Cape in South Africa. MyHydro’s solutions, using modular 1.5 MW turbines which are easily scalable to 10 MW and more, could also now be an option for these types of off-takers.
Images courtesy of MyHydro
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