Utility-Enabled Distributed Energy Resources Hub
Unreliable electricity supply from the national grid remains a challenge in many Sub-Saharan African countries. Interconnecting DERs through innovative win-win-win business models can address this supply gap, however, models are still nascent in most African markets. The DER Hub provides resources to help utilities and developers scale these solutions
Deploying utility-enabled distributed energy resources (DERs) presents a unique opportunity to address challenges of power availability and reliability across sub-Saharan Africa. Utility-enabled DERs are an innovative solution for electricity distribution companies (utilities or DisCos) to collaborate with project developers and customers, improving electricity supply and reliability. These models leverage clean energy assets, typically solar PV with electrical storage, as embedded generation, with existing distribution network infrastructure to deliver reliable power supply to customers at a lower cost.
Utility-enabled DERs can be deployed in urban, peri-urban, and rural settings and offer a solution that benefits all parties:
Utilities: Improved financial performance
Customers: Improved power supply for the millions of customers that rely on expensive often polluting fossil fuel generators to back up the grid outages
Developers: Increased opportunities to build DER projects in grid areas with higher monthly revenues
RMI's Utility-Enabled DERs Hub aims to demonstrate and accelerate how utility-enabled DERs can enhance distribution network flexibility and provide supplementary services to the national grid. The DER Hub offers templates for contract agreements, financial models, and project implementation plans, as well as case studies and other resources for utilities and developers to fast-track project implementation timelines and increase data sharing and transparency. Through collaboration with local partners, RMI intends to scale and replicate successful approaches within Nigeria and across the region.
RMI's DER Toolkit
RMI's DER toolkit provides energy decision-makers, utilities, and private developers with all the resources they need to initiate and follow projects from planning to implementation. It provides curated, standardized resources and templates for key documents in DER project preparation, development, and implementation. These resources help improve the understanding of utility-enabled DER business models among utilities and developers, thereby increasing their awareness and ability to implement these business models. The toolkit provides useful guides and templates that simplify and accelerate the project implementation process for utilities and developers. Finally, by standardizing and harmonizing documentation between utilities and developers, these resources help reduce misalignment during the project lifecycle and accelerate overall project implementation and decrease data asymmetry.
RMI's DER Implementation Handbook is the starting document for DisCos that are interested in using the standardized tools developed under this toolkit for utility-enabled DER project development and implementation. It introduces utility-enabled DERs and describes how they can benefit DisCos and their customers; describes why the toolkit is necessary, the objective of the toolkit, the tools, and how and when to use them during the project implementation process; and describes wider initiatives that will help DisCos successfully scale DERs.
The toolkit is comprised of 4 sections, each relating to a different phase of the DER project process.
Download RMI's DER Roadmap Report for an in-depth guide to DER business models.
Webinar – Fast-Tracking DER Projects: A Toolkit for Utilities, Developers, and Financiers
Project Agreement Templates
The templates enable parties, developers, and utilities to align on the various terms to ensure successful implementation. These documents streamline negotiations by providing pre-refined terms, reducing the time and risk typically associated with lengthy negotiations. Each template is tailored to address specific business model needs and operational contexts, ensuring comprehensive and efficient implementation.
Moreover, these templates are designed to manage risks effectively, ensuring that the agreements are bankable. They incorporate provisions for proper risk allocation among parties, mitigating potential financial and operational uncertainties. The templates enhance the viability and attractiveness of the business model to be used to develop projects that will be acceptable by investors and stakeholders alike.At the project agreement phase, you will need templates for both term sheets and contracts.
Term sheet: The term sheet is a legally non-binding document in which the parties provisionally spell out and agree on the key transaction parameters before further negotiations, particularly before moving into a binding contract agreement.
Financial Model Templates
The financial models calculate key financial metrics for utility-enabled DER projects for developers, utilities, and customers (for the C&I model). This enables both parties to assess the viability of proposed projects and estimate their projected returns. Additionally, by providing a single model that evaluates both utility and developer returns, the financial models can help the utility and developers reach agreement on the details of the project by ensuring that all decisions are beneficial for both parties.
Project Implementation Plan Templates
The project implementation plan (PIP) templates help users identify feasible utility-enabled DER project sites, and understand the steps required to initiate, prepare, and execute a project. The PIP also defines responsibilities between utilities and DER project developers, estimates how long it will take to complete these steps, and describes how they can mitigate common risks along the way. Finally, these resources help readers understand the steps for achieving compliance with all institutional, legal, regulatory, and standards requirements, including all necessary approvals, certifications, and permits as well as their typical timeline.
Project Procurement Templates
The project procurement templates will help users structure project procurement into a 2-stage competitive procurement process. They will help in soliciting bids from energy service companies and DER project developers, specifying the requirements that will be reflected in project agreements, and evaluating proposals from developers based on chosen criteria such as their project implementation track record, commercial history, financial capabilities, and more.
Where we Work
- Mokoloki: Nigeria's first rural commercial undergrid minigrid, online since February 2020. The project demonstrates a successful partnership between Ibadan Electricity Distribution Company, Nayo Tech, and Mokoloki community, resulting in new customers, growing electricity demand, and attracting businesses to the area.
- Toto: The first IMG in Nigeria, commissioned in November 2023. Starting with just 300 connections at the beginning of operations, Toto IMG now boasts of over 1,500 connections including homes, small and medium enterprises, and institutions like schools and the Toto general hospital.
- Zawaciki: The Zawaciki IMG is the first in northern Nigeria and the second in the country. The 1 MWp solar plant is currently the largest IMG in operation today. The solar plant caters to the energy needs of the Gida Dubu housing estate, and environs. Over 1,200 customers are connected to the solar IMG including homes, small and medium enterprises, and large industrial customers.
- Wuse Market: The Wuse Market is the largest commodity market in Abuja, the capital of Nigeria. Shop owners have for years relied on gasoline and diesel backup generators due to unreliable grid supply. These backup generators are expensive to run, noisy, and produce climate pollution. Solar developer GVE is commissioning a 1 MWp solar system with 1.2 MWh of storage to augment the unreliable grid supply at the market. On completion, the project will supply over 2,500 shops in the market, effectively removing the need for backup generators.
- Robinyo peri-urban community: Robinyo, a community located at the edge of Lagos and Ogun state at the tail end of the feeder, inherently has high technical losses. It also has very low metering rates below 25 percent. These two factors make it difficult for the utility to recover its cost for energy supplied. Darway Coast, in partnership with Ikeja Electric and the community development association, is currently constructing a 500 kWp solar interconnected minigrid with 624 kWh of battery energy storage.
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