By: Varun Khanna, data scientist and consultant, CANADA.

In January of 2016, the Sustainable Development Goals of the 2030 Agenda adopted by world leaders in September 2015 came into force. The seventeen interlinked and global goals were designed to be a blueprint to achieve a better and more sustainable future. The Division for Sustainable Development Goals (DSDG) in the United Nations Department of Economic and Social affairs provides substantive support and capacity building regarding the implementation of the 2030 Agenda. More specifically, SDG7, is to drive towards affordable, reliable, and sustainable energy for all. As of 2018, the DSDG reported that 789 million people or 10.4% of the world’s population lack electricity.
Currently throughout Africa, there are wide variations in both energy usage and electrification rates. The current profile averages renewable generation at about 40% of total generation across Africa, with local numbers varying from country to country.
Many African countries derive large portions of their generation from renewable or clean sources. However, a significant portion of energy is generated using non-renewable sources generated at centralized facilities, that rely on transmission and distribution networks to transport energy to the people. As with other locations globally, this structure works for urban areas, but not so well for rural areas. Africa needs a single solution that can work for both urban and rural areas, that will also encourage resilience and increase the penetration of renewable energy. Using microgrids as the building blocks of the electrical system provides the rural areas with the foundation that they require for electrification now and in urban areas they provide the resiliency that has so far been elusive. These building blocks can subsequently be interconnected to form the larger grid that would empower citizens in both urban and rural settings to participate in generating and exchanging energy.

Transactive energy market design

Transactive Energy refers to a system of economic mechanisms and control techniques, the balancing of supply and demand and the ability to create value while executing it. In essence, transactive energy is a marketplace that allows producers and users of energy to transact with each other directly. For example, if a homeowner installed generation along with energy storage at their home, and realized that they did not consume all of the energy generated, rather than looking for a buyer to off-take the energy directly, they can sell the energy to the grid and then the buyer would buy the energy at their end. In this way, the two parties can conduct a “transaction” for the energy.
The transactive energy approach offers several key benefits to consumers:
• Better utilization of grid assets (i.e., the hardware that makes up the grid—everything from transformers and switches to vehicle-charging stations and smart meters) can lower costs, especially during peak demand conditions.
• Greater resilience and reliability will reduce the length and frequency of outages.
• Increased choice and information will give consumers greater control over personal energy use.
• Increased use of renewable energy resources will give individual consumers the satisfaction of contributing to larger, societal environmental goals.
Utilities, industry, and consumers must find a way to come together to collectively strive to attain these goals. In many areas, this means the establishment of an interconnected bidirectional grid system and some sort of market construct to govern and settle the exchange of energy among the interplay of players- Utilities own grid systems which have traditionally been designed to be unidirectional and most successful where there are large concentrations of people; most Industries own self- generation facilities due to the reliability levels of grid connections, with surplus capacity usually available but idle; Citizens often own rooftops and land, but not necessarily the means to generate. With traditional utilities and large industries as obvious participants, what would happen if there were more participants such as industrial sites, schools, shopping malls and residences. Would there be enough participants to generate sufficient capacity to allow for sustained exchange of energy and resources within a marketplace? If each residence or group of residences had energy self-sufficiency – generation and storage to balance their respective loads, in addition to commercial enterprises, office buildings and industries, excess generation and/or storage capacity could be sold for use in adjacent residences, building or commercial enterprises subject to the availability of a marketplace. Whether by using Virtual Power Plants (VPPs), excess generation, excess storage capacity or vehicle to grid (VtG) frameworks, there are many ways in which industry, commercial enterprises and individuals would have the ability to participate in transactive energy. Furthermore, all of this would be done hand-in- hand with the utilities and would work to deepen penetration of renewables and simultaneously make the electricity grid more reliable and resilient.
A sustainable approach that could be applied to both urban and rural situations would be to use microgrids and minigrids as building blocks for electrification. Each location would deploy renewable generation, storage, and distribution. Whether individual households (nanogrid), small villages (microgrids), industrial parks/facilities (microgrids) or towns (minigrids), this approach would bring independence and electrification to rural areas in self-contained building blocks. These grids could be implemented, owned, and operated by locals or could be provided as Energy as a Service by the utililties or industry. Generation could be a mix of clean and renewable sources, depending on the location and geography. Many of these could initially be standalone grids, with the eventual view that these independent building blocks could either be connected to each other, thereby creating larger bi-directional grids with shared resources or they could eventually be interconnected with the larger grid and have a place within the energy market.
This marketplace for buying and selling renewable energy is already being considered. While state run utilities already possess the ability to share resources through the five African Power Pools, the establishment of a marketplace would broaden the participation, allowing industries and commercial entities to be involved, eventually having this market filter down to the individual inhabitants. For this to happen, renewables penetration will have to increase, and electrical networks would need to be designed in a bidirectional grid of microgrids format. This will be facilitated through incentives within the marketplace. With the scheduled launch of a pan-African Single Electricity Market, AfSEM in mid-2021, the African Union and its members are signalling a move towards the ability to buy and sell electricity and its additional resources in an Africa wide marketplace. They are planning to link the five existing power pools in Africa using a single Power Master Plan. With this shift towards transactive energy, this may incentivise the more efficient use of grid assets and result in greater resilience through the entire interconnected system. Building a grid of interconnected microgrids may have some initial complexity in terms of design, implementation, and rules for energy sharing, but by preserving the ability for each building block to isolate from the system increases resilience while increasing the level of penetration of renewable energy and developing interconnectedness within the system. Developing both on-grid and off-grid resources could be the fastest way to both provide electrification to all and to encourage more participants in the Single Electrical Market which will increase the deployment and use of renewable energy.

Varun Khanna
Varun Khanna

Varun is a data scientist and consultant with an electrical engineering background. With over 20 years of experience in the power generation industry, he has travelled the world and has extensively designed and implemented power generation facilities and utility capital and asset management programs including the implementation of a number of renewable based microgrids and automation in the energy sector for Solar, Wind, Hydro, waste water and energy from waste. He likes to explore the relationships between numbers while uncovering and revealing the stories contained within the data. In the age of big data, these stories become realistic and valuable solutions and strategies for businesses. His data science knowledge has contributed and enhanced utilities and smart grid efforts through system modelling, outage detection and prediction and fraud detection. Varun has been involved with the development of machine learning based solutions and believes that this holds the key to the optimization required for energy transition. He sees a future that contains bidirectional power grids operating on a transactive platform. Varun has written a number of articles on transactive energy, decentralization of the grid and data driven decision making.


[1] IRENA, 2021. Renewable Capacity Statistics, International Renewable Energy Agency.
[2] IEA, 2020. SDG7 Data and Projections – Access to Electricity, International Energy Agency.
[3] IEA, 2020. Renewables 2020 Data Explorer, International Energy Agency.
[4] WBC, 2019. Access to Electricity, World Bank Group.
[5] UN, 2021. SDGs – Goal 7, United Nations Department of Economic and Social Affairs – Sustainable Development.

Mohamed Alhaj

Dr. Mohamed Alhaj is a young energy leader, a competent sustainable energy consultant, and an expert researcher. He is the founder and managing director of Terra Energy - a Rwanda-based clean energy consulting firm.

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