The mini-grid and district heating has been in practice for a while in Northern Europe These are mid-size cogeneration plants (CHP), usually 10-20MWe, that supply electricity and hot water to a city neighborhood.
In Africa, this model can be scaled down to the level of micro grid. The challenges facing electrical power in Africa concern not only generation. Distribution as well as metering and collections are very problematic. With the grid suffering from theft and neglect, even the availability of generation will not get electricity to customers.
This does not seem to be a problem for mobile phone system operators. The idea behind the micro grid is to emulate elements of the vertical integration of mobile operators.
At the center of the concept is an entrepreneur (or a co-operative) that is able to generate, distribute and collect. Electricity from biomass is generated at 2-4 cents per kWh, and sell it to neighbors at 10-12 cents, which is a 60% discount over diesel. Since the number of neighbors thus supplied is small, distribution and collection are less problematic, since a there’s a strong personal relationship.
In Nigeria for example, anyone can distribute up to 100kW to several clients, and up to 1MW to a single off-taker.
Individual entrepreneurs (or co-operatives) can therefore become small power companies, meeting the needs of a small neighborhood or a cluster of businesses, and making good money in the process.