The ABC Approach to Microgrid Development in Frontier Markets

Addressing this financial issue is an emerging model for rural microgrid installation, the phased “ABC” deployment approach. This approach is based on first addressing an (A)  anchor client (typically the largest user in a community), next expanding the system to meet the local (B) business  demand and finally expanding to serve the broader  (C) Community, including residential areas.  The phased roll-out simplifies the financing process required to launch the microgrid.  Starting with a single client makes evaluation and due diligence much simpler. The process avoids the potential complexities of residential billing, payment systems, and pre-paid meters often present when  selling immediately to a community.

As a starting point, the anchor client can be any significant energy user including a factory, commercial building, telecoms tower, or water-pumping facility.  These power users will typically already have a commercial basis for their operations.  They will also often have banking relationships and credit histories that make them more “bankable” as off-takers.  If they’ve been  operating for several years, they will be relatively stable from a financier’s perspective.  As the microgrid replaces or reduces fuel consumption from expensive diesel generation, the reduced fuel costs can provide clear cost savings and economic rationale for adopting a renewable microgrid.

Read Full Article at Microgrid News by HOMER Energy

Arnaud heads the Gommyr team and brings more than 10 years experience in the renewable energy and finance sectors. He has a passion for working on sustainable business models for deploying renewable energy in microgrid and localized power solutions. Prior to founding Gommyr, he managed the Piraeus Clean Energy fund, investing in renewable energy and cleantech projects in South East Europe and the Eastern Mediterranean region. Earlier he was a manager with McKinsey & Company serving clients on projects in the energy, renewables and climate change sectors across Europe and Africa. At the beginning of his career he spent several years working in engineering and as a manager with a number of start-ups in the high tech sector in Canada. Arnaud holds a BEng in Electrical Engineering from McGill University and an MBA from INSEAD.

Microgrid Media