AFRICA CAN LEAD GLOBAL ENERGY UTILITY REVOLUTION
Globally , the revolution in power resembles telecommunications two decades ago . New business models are threatening the old guard while promising a better future for consumers . Africa has the same big advantage in this transition : fewer change-resistant incumbents . More than 500 million Africans do not have any power at all .
From household to micro-grids
Africa ’ s energy leapfrog has already begun with the explosive spread of Solar Home Systems ( SHS ). These small , autonomous power systems incorporate a solar panel and a battery . They can power lights and charge of mobile phones . This can transform the life of low-income households previously reliant on firewood and kerosene lanterns .
Over the last five years , companies like Off-Grid : Electric , M-Kopa , d . light , and Mobisol have provided solar home systems to more than half a million customers in Africa . Soon they will reach millions . SHS ’ s success has galvanised large amounts of venture capital and debt financing into Africa . Solar on the continent increasingly looks like an exciting opportunity rather than speculative experiment .
Light and a charged phone dramatically improve the lives of the un-electrified poor . But the technology can do more .
The average American home uses 300 times the power the average home solar system produces . The next step is to provide ‘ productive power ’: more robust electricity for heavier duty and income generating use like power tools , cooking and irrigation .
The path to widespread provision of
productive power is increasingly clear . Larger power systems with increased functionality called ‘ micro-grids ’ are coming of age .
Micro-grids , as the name suggests , are miniature electricity grids that distribute power through traditional power lines and provide power comparable to main grids . Solar , which scales elegantly upwards and downwards , serves as a modular generation source .
Battery technology to store power at the village level has become viable . Smart metering and mobile money enable low-friction billing and customer management . Micro-grids have arrived and will accelerate Africa ’ s march towards a distributed future grid in two important ways .
First , and most importantly , aggregating demand and generation on a micro-grid unlocks the provision of productive power . The key difference between a micro-grid and a solar home system is the efficiencies created when generation and load are aggregated and “ smoothed ” among many customers .
Simply put , aggregation enables lower pricing . Autonomous systems are less efficient and even a steep reduction in the cost of battery storage will not change this fundamental reality .
As an extreme example , when you power your TV remote with AA batteries you are paying well over $ 100 / kWh . Most solar home system companies sell power for around $ 5 / kWh . Compare that to the $ 0.10-20 / kWh that most ongrid customers pay , and the economic imperative for sharing and spreading through a grid becomes clear .
Second , micro-grids are autonomous but can also be building blocks of a larger smart grid that delivers even more
aggregation and smoothing . Eventually micro-grids can become capillaries of a distributed grid , solving another key challenge that plagues African utilities : connecting people within the last few hundred metres of their power lines .
In Kenya , for example , more than half of the off-grid population lives within 600m of a low voltage line , with the segment within 200m sometimes referred to as “ under grid ” households . Building distributed micro-grids to connect these people , and then integrating these micro-grids into the main grid , solves the problem of building this final component of connectivity .
Battery storage and solar PV on the micro-grid can also provide stabilisation and additional power to the main grid , creating a national smart grid from the ground up .
Micro-grids are not a theoretical idea . Companies like PowerGen are already making them a reality . Every day in east Africa , customers on micro-grids are pressing a few keys on their mobile phones to transfer money to their energy accounts .
They are instantaneously rewarded with a balance confirmation that assures them continued use of their lights , blenders , TVs , refrigerators , and other appliances . Businesses like movie halls , restaurants , and hair salons are blossoming . Productive power allows communities to prosper .
We will all benefit from the transition of power taking place around us . Power will be cheaper , smarter , cleaner , and more flexible .
The foundations for that energy future are being laid today , and in Africa the setting is perfect to build the optimal architecture from the bottom up .
SAM SLAUGHTER co-founder of PowerGen Renewable Energy , the market leader in solar micro-grids in East Africa .
MATT TILLEARD co-managing partner of CrossBoundary Energy , Africa ’ s first investment fund for commercial and industrial solar .
JAKE CUSACK Co-managing partner of CrossBoundary Energy , Africa ’ s first investment fund for commercial and industrial solar .
2017 | Business Times Africa 57