London, U.K. --- (METERING.COM) --- October 14, 2011 - Interest in increasing in decentralized generation and distribution through mini-grids to improving access to modern energy services in rural areas in developing countries, according to a new briefing paper from the Global Village Energy Partnership (GVEP).

In this context a mini-grid is defined as a power source of less than 3 MW (diesel, hydro, biomass, hybrid) supplying a local distribution grid connected to domestic, business and institutional customers in the locality.

The policy briefing states that mini-grid approaches present a number of new opportunities for rural electrification. However, their penetration remains low in most developing countries, with their development having been greatest in Asia. For example, China has an estimated 60,000 , and Nepal, India, Vietnam, and Sri Lanka each have between 100 to 1,000 mini-grids.

The policy briefing continues that experience indicates that in many contexts there are still considerable challenges to be overcome if they are to be scaled up, in particular in Africa where the challenges, largely economic, are the greatest.

Technical challenges include poor matching to local context and poor maintenance.

According to the policy briefing, the most successful mini-grid schemes have been developed where their design has carefully considered local economic, social and environmental conditions, where sustainable financial models have been developed, and where the national policy and regulatory context is sensitive to the requirements of building mini-grids. Many of these factors are very context specific.

Other factors for successful development include in community schemes allocating sufficient time during project design to establish clear governance structures and to build community trust. Mini-grid schemes also need to be linked into wider rural development strategies in order to match demand.

Sustainable finance to cover upfront costs should also be secured. Ideally, at least the operation and maintenance costs must pay for themselves (through tariffs) in the long run for schemes to be feasible.