Africa can lead global en­ergy util­ity rev­o­lu­tion

Chronicle (Zimbabwe) - - Worldwide/opinion - Opin­ion Sam Slaugh­ter, Matt Til­leard and Jake Cu­sack

TRA­DI­TIONAL power util­i­ties are dy­ing. Dra­matic de­clines in the cost of so­lar power and bat­tery stor­age are fi­nally giv­ing con­sumers power over their own power sup­ply. Most util­i­ties are hop­ing it will all just go away. In some ways, the dis­rup­tion of elec­tric­ity is fol­low­ing the fa­mil­iar script of most trans­for­ma­tional tech­no­log­i­cal change.

How­ever, the set­ting for this script might sur­prise many. The blue­print for our en­ergy fu­ture could ar­rive first in Africa.

The tra­di­tional util­ity acts as a one-way pipe­line mov­ing elec­trons from large cen­tralised gen­er­a­tion to pas­sive con­sumers.

The util­ity of the fu­ture will be more like a stock ex­change: a mesh net­work that bal­ances dis­trib­uted nodes of gen­er­a­tion, stor­age, and con­sump­tion.

This global en­ergy rev­o­lu­tion will be the defin­ing tech­no­log­i­cal change of our cen­tury.

A multi-tril­lion dol­lar in­dus­try will be com­pletely dis­rupted. En­trepreneurs and large com­pa­nies are al­ready scram­bling for the Schum­pete­rian spoils from this cre­ative de­struc­tion.

Be­fore the ad­vent of mo­bile phones, few Africans had ac­cess to mod­ern telecom­mu­ni­ca­tions.

Now nearly ev­ery African has a mo­bile phone and mo­bile money is more ubiq­ui­tous in Africa than in de­vel­oped na­tions.

Africa “leapfrogged” the old sys­tem of cop­per land­lines with suf­fi­cient inertia to lead the fu­ture of mo­bile, not just catch up.

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.

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 on-grid 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 is the co-founder of Pow­erGen Re­new­able En­ergy, the mar­ket leader in so­lar mi­cro­grids in east Africa. Matt Til­leard and Jake Cu­sack are co-man­ag­ing partners of CrossBoundary En­ergy, Africa’s first in­vest­ment fund for com­mer­cial and in­dus­trial so­lar.

Pho­to­voltaic project in Mozam­bique us­ing Pico So­lar Home Sys­tem

An ex­am­ple of a foor top So­lar home sys­tem in­stal­la­tion

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