Digital opportunity in rural electrification grows

Once rural electrification is fixed, utilities, consumers and private investors can expect to reap great opportunities from digital solutions.
Published: Fri 16 Sep 2016

Rural electrification is moving along somewhat sluggishly. The International Energy Agency (IEA) has projected that although Sub-Saharan Africa’s nearly one billion people will gain access to electricity by 2040, around 530 million people in the outlying rural areas will continue to live without it. The IEA also says that by 2030, 1.2 billion will still not have access to electricity- 87% percent of this population will be in rural areas.

There is obviously a major gap in living standards and economic opportunities when it comes to comparing cities to rural areas. While power and light makes living conditions comfortable and productive, those with access to power enjoy important opportunities that have wider implications. The Internet has quickly become the route to education, healthcare, employment and higher incomes. However, a lack of access to electricity stands in the way of this.

In response to limited economic and social opportunities in rural areas, many will move to the urban areas to improve their economic prospects. However, another approach is to deploy renewable energy and battery storage in these rural areas.[Minigrids empowering communities].

Until recently, renewable energy was viewed as costly and uncompetitive when compared with traditional energy systems. But this is changing fast. Renewables make the best use of scarce capital by using smart meters to better manage a grid, increasing efficient energy use. They also support the efficient development of massive supply stores in the form of advanced batteries. When used in the electricity grid, advanced batteries not only improve efficiency, but also allow energy managers to bring electricity to remote and underserved areas around the world.

Innovative digitally-enabled energy technologies

With new digitally-enabled energy technologies, the output of reliable power can expand access to between 80 million and 110 million people over a relatively short period of time.

There is a wave of innovation in Africa to overcome unreliable and inadequate electricity supply. The Kenyan non-profit Ushahidi is developing a product called BRCK that can switch networks and power sources seamlessly to combat that unreliability. Engerati has written about companies that are designing solar charger and battery-storage units which give those in remote areas to generate sufficient electricity to power a mobile phone, a computer, a radio, and lighting. If mass produced and distributed across the rural Africa, the potential would be significant.[Finding a sustainable solution for electrification in Africa.]

 

If the current drive for large-scale renewable solutions continues, solar power could become the world’s largest source of electricity by 2050, according to the IEA. So, it goes without saying that in many parts of the developing world, the first supplies of electricity that rural consumers will use is clean power generated by solar panels. As solar panel and installation costs drop even further, this future will become even more attainable. The per-watt price of a photovoltaic cell has already dropped by 85%. [$1 trillion for solar energy by 2030.]

Added to this equation is the advances made in the energy storage sector. McKinsey Global Institute has estimated that energy storage could produce up to $50 billion a year in value by enabling electrification of new area by 2025 - half its value globally.s.

Internet of Things transforming rural areas

Taking this conversation one step further is the topic, Internet of Things. Economies across the world are looking eagerly to the Internet of Things (IoT) to transform business models, reimagine customer experiences and reinvent public services.

While Western governments focus on repurposing and in some cases overhauling legacy IT infrastructures to seize the IoT opportunity, places like Africa (with little to no critical infrastructure) have the ability to establish an infrastructure robust enough to support the current and future mobile, cloud and big data needs of its population.

IoT requires a machine-to-machine communications network to connect machines, devices and objects to the internet, turning them into ‘intelligent’ assets capable of sending and receiving large amounts of data.

According to Vodafone’s 2015 M2M Barometer Report 35% of organisations in Africa have M2M deployments in place and IDC predicts significant potential for M2M growth across the African continent in energy services. Enterprises and growing urban populations in mature markets such as South Africa, Kenya and Nigeria can look forward to great opportunities created by the technology. [Mobile brings utility services to 2 million underserved]

There are some exciting developments taking place in remote African communities as they increasingly gain access to technologies that can bring powerful socio-economic benefits. Using M2M connectivity, innovative off-grid energy suppliers, such as BBOXX, are supplying solar power generators to African consumers in rural areas. Vodafone M2M SIMs installed in every solar unit connect BBOXX’s smart generators to a global network. Units can be deployed quickly anywhere in the world and installation updates, fault checks and usage tracking can be managed centrally. This provides remote households and people located in rural off-grid areas with access to a cost-effective, reliable and consistent power supply – and BBOXX with a scalable business model.

On average, households using the smart generators are saving US$17 per month, with some even using the solar kits to create small businesses such as phone charging. As many as 71% of households interviewed by BBOXX claim to be bringing in additional income from the technology, averaging at $49 per month. The technology is also helping to improve educational outcomes in Uganda by giving students a stronger sense of morale and safety. Following the installation of 51 BBOXX solar systems in eight primary schools in 2014, enrollment rates from boys have increased by 63%, while the number of students who feel scared or unsafe at night has dropped from 85% to less than 1% .

Technological revolution

Africa is at a pivotal moment in its technological revolution. By quickly capitalising on its lack of legacy infrastructure, the continent has an opportunity to leapfrog Europe and Northern America to connect its people, places and things.

The faster this occurs, the sooner its businesses can build competitive advantage on the global stage.

Further reading

International Energy Agency-Africa Energy Outlook [pdf]

 

Related Webinar