Gridless Expands Bitcoin Mining Minigrids To Unlock Africa's Last-Mile Energy

21st-century economies are built on the foundations of Energy and the Internet, on top of which the majority of other modern-day services run. Providing energy is amongst the single most important things you can do to advance humanity - your ability to move forward in the world relates directly to energy access.

Africa lags behind for this exact reason. There’s a lack of economic incentive to expand national electric grids here, especially beyond where marginal returns do not cover power installation costs. Most African countries pause their national grids where financial viability ends.

The further away you get from cities, the less disposable income people have, which also means a dwindling potential for electrical energy usage, the deeper into rural Africa you go. Mini-grids?have remained the only reason such villages still stand the chance for electrification.

Everybody agrees that mini-grids are the proper way to push electrification (and thus inclusive prosperity) into the edges of Africa. It’s just the funding model that we’re yet to solve.

The World Bank estimates that Africa will require 140,000 more mini-grid stations, up from the current 5,000 if it is to meet its energy demands in the next 20 years.

Minigrid Unit Economics And Financing Models

The unit economics of building a mini-grid are steep. To remain sustainable, mini-grids require a minimum amount of paid energy usage from surrounding villages, which retail users in the current model don’t provide enough of.

Additional business operations usually need to connect as well to attain this minimum energy usage.

In the best-case scenario, you spend $2000 to $4000 per generated Kilowatt to have a minigrid site running. For better economies of scale, you’d want to build bigger sites that yield better unit economics than comparatively smaller, more expensive sites.

Through Bitcoin mining, Gridless steps in to make this power equation more economically sustainable for mini-grids and small independent power producers (IPPs).

BTC mining is the only model so far that has made mini-grid stations sustainable. With the returns from mining, these mini-grid sites run more sustainably while simultaneously reducing energy costs for adjacent communities.

Traditional mini-grid financing is slow and bureaucratic. It comes from concessionary funding i.e. Foundations, the World Bank, Africa Development Bank (ADB), and Direct Foreign Investments (DFIs). It could take anywhere from 3 to 7 years to secure the capital and another 30 to realize an ROI on it.

In this new model, Gridless provides financing by being an anchor tenant and buyer of last resort for the surplus energy, demonstrating real returns that investors typically want to see before committing to the sector.

Gridless is a geographically agnostic off-taker, utilizing the excessive power generated at the mini-grid site prior to eventual community uptake. This way, Gridless supports the electrification of Africa, as well as the further decentralization of the Bitcoin network.

Not only does Gridless compress the ROI period in the new financing model, it also provides for the quicker expansion of these mini-grids as the anchor tenant and buyer of last resort at the site.

Finally, Gridless showcases how Bitcoin can subsidize green energy generation using Hydro Electric Power, Solar, and other renewable sources. The aligned incentives between Gridless, the community, and the on-site energy partner ensure that these projects are economically viable from the beginning.