The term mini-grid refers to (relatively small) electric networks that are used to distribute alternate electric current within a village or neighbourhood. Such distribution solutions are mostly used in areas that are remote from national or regional grids.

Mini-grids are usually supplied by a single power generation station (e.g. Micro-Hydro power plant, Wind turbine, combustion engine running on Biogas or a Photovoltaic array). However, the combination of two or more generation technologies (hybrid power systems) attracts greater interest, as this is an option to improve the reliability of the electricity supply.

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1. Potential contribution to sustainable development

Global sustainable energy supply

The main role of mini-grids in the global energy supply is to enable access to electricity in areas that are not covered by central networks and have no option to be connected to a grid in the future. Mini-grids can also lead to a more widespread dissemination and faster deployment of renewable energy technologies. These are more flexible and can be implemented more easily using mini-grids rather than conventional energy technologies. They are therefore associated closely with renewable energy technologies.

Climate change mitigation

The application of mini-grids makes no direct contribution to climate change mitigation. However, in combination with electric power generation based on renewable sources, mini-grids can be key to reducing (or even avoiding) greenhouse gas emissions.

Millennium development goals

Mini-grids are technical solutions that are appropriate for areas with no access to central networks. This technology already plays an important role in measures addressing energy poverty. In particular in regions where a high proportion of the rural population does not have access to electricity, mini-grids adjusted to the specific local conditions can be important factors in social and economic development. The systems can also be managed and owned by local entrepreneurs or organisations, which in turn can boost local development.

2. Environmental Issues

Operation of mini-grids (i.e. without the generation facilities) can be considered as free of direct emissions. The major environmental impacts of mini-grids derive from the production of the components, the installation of the network and network losses.

Design of layout

An environmentally sensitive design of the layout of the mini-grids can avoid major impacts on the local environment from the installation process. For example, the design can include the extension of the distribution lines along already available paths to avoid additional interventions on the landscape.

Combination with renewable power

In rural areas, small engine-generation sets running on fossil fuels are commonly used to supply electricity. These devices often cover the electricity demand of single households or small workshops for just a few hours per day. Mini-grids distributing renewable electricity can reduce or avoid the emissions from these kinds of fossil fuel options.

3. Social Issues

Installing a mini-grid involves long-term intervention on the collective reality of a community. The involvement of the local population is therefore crucial at different stages of the development process. Securing the community's access to electricity can lead to significant improvements in the living conditions of individuals and the community as a whole.

Ownership, operation and management

Clear ownership and a well-defined assignment of responsibilities are fundamental for the sustainability of the project. Two main approaches are commonly used:

  1. A private entrepreneur (e.g. one villager with some investment capacity) takes a major part on the capital costs of the project and assumes the operation and maintenance of the system.
  2. Some kind of village or common ownership is established. Organisational experience would be valuable in this case. The continuity of the organisational structure and long-term commitment are essential for the sustainability of the project.

Assessing demand and ability to pay

The expected demand of electricity should be assessed when designing the system. This requires the participation of the future end users.

Communication and consultation is also necessary in order to establish a proper tariff scheme, one that is adapted to the ability to pay and the consumption patterns of the end users while at the same time ensuring the financial sustainability of the project. Assessing the current energy expenses that could be replaced by the connection to the mini-grid can help to estimate the tariff structure for the service.

In both kinds of ownership approaches, a tariff scheme should be established that allows the entrepreneur or the responsible organisation to cover operation and maintenance costs, repay possible loans and obtain a profit margin.

Technical and managerial training

Technical and managerial skills are a prerequisite for ensuring the continued operation of the system. The implementation of mini-grid projects therefore has to include training and building the capacities of locals. To this end, identifying individuals in the community that show long-term commitment may become crucial.

Electrifying social facilities

Having social facilities such schools or health centres as end users of the mini-grid can have positive effects for both sides: It can lead to a significant improvement in the supply of social services and it can enhance the economic feasibility of the mini-grid as social facilities have a relatively fixed power demand, which means that the system operator can predict revenues.

Improvement of living conditions

Securing access to electricity can lead to significant improvement in the quality of life of the local population. There are various positive effects:

  • The possibility of using electric lighting is a cleaner and less risky option than traditional combustion lamps.
  • The availability of electricity opens up a wide range of communication, information and entertainment options.
  • Being able to run electrical devices (e.g. freezers, electrical tools, motors, etc.) helps small businesses to grow
  • Social services such as health care, education or community activities can be improved by using electric appliances.

4. Development status and prospects

All the components necessary to build mini-grids are already commercial products. However, the availability (as well as the prices) of components may vary strongly from region to region. In addition to the supply of components, technical skills are needed to use mini-grids because, unlike other technologies, a mini-grid must be designed according to the very case-specific conditions. The development of training and design tools to facilitate local capacity building may therefore be crucial to the widespread use of mini-grids.

5. Economic Issues

The capital costs of mini-grids vary strongly, depending on the project. An evaluation of projects with mini-grids installed in different contexts found that investment levels varied widely: from a very basic design in Laos of around USD 20 per consumer to a very sophisticated design in the Ivory Coast of around USD 650 per consumer1.

Using local resources

The costliest components of mini-grids are often the poles and the cables. In some cases, poles can be manufactured using resources that are available locally, while the community can supply a significant share of the labour required during construction.

Costs per kilometre

The main factors determining the capital costs of a mini-grid are the total length of the cable and the peak load to be distributed. The typical costs of Indian electrification programmes are reported to be USD 3,500 per kilometre for low-voltage lines2.


  1. Energy Sector Management Assistance Program (ESMAP) (2000): Mini-Grid Design Manual, Technical Paper 007
  2. Energy Sector Management Assistance Program (ESMAP) (2007): Technical and Economic Assessment of Off-grid, Mini-grid and Grid Electrification Technologies


Good Practice Examples and Related Activities

All Examples in Asia