Finding a Sustainable Solution for Electrification in Africa

Innovative business models and a drop in solar tech costs will see Africa’s off grid renewables projects grow.
Published: Fri 21 Aug 2015

Africa is filled to the brim with renewable energy potential. It boasts world-class solar potential, a vast belt of clean geothermal reserves, strong winds, and great potential for micro hydro and no-dam hydro.  The solar potential is especially huge, with an average of 325 days of sunlight for the majority of the countries and 80% of land in Sub-Saharan Africa receiving almost 2,000kWh per square metre per year of solar energy.

However much of it has yet to be harnessed in a sustainable way, leaving millions without a reliable source of power. Many of the solutions are either not cost efficient or do not offer the level of service needed to support economic development and improve quality of life.

Finding the right technical solution

Small off-grid solar systems have been set up in response to the high capital costs involved in grid expansion in rural and outlying areas. However, generally these tend to be difficult to service and offer a very limited source of power.

Traditional microgrids are also not the answer as they are usually powered by diesel generators which emit toxic pollutants and are expensive to operate. These systems also lack adequate control technology, which makes them susceptible to energy theft. Also, income from these are dependent upon local personnel to collect fees from customers in ­person, often resulting in collection rates as low as 50%. So, from a financial perspective, there is a great deal of risk.

It’s not all about the technology

While various technological solutions play an important role in solving Africa’s energy crisis, it’s not enough. The long-standing issue of inaccessibility calls for a more holistic solution.

A good example of this is Powerhive’s energy solution which seems to be getting some positive results obtained from pilots done in Kenya. The company seems to have found a workable solution for the African continent as well as for other emerging markets. Their solution lies in decreasing solar and battery costs, innovative financing mechanisms, and custom­ built technology.

Powerhive has built a microgrid solution designed to provide reliable, grid­ comparable service to remote communities by offering the following:

➢ Cost ­efficiency optimized for village­ scale deployment

➢ Sufficient appliance­ compatible AC electricity to power productive uses

➢ A reliable, low maintenance, 100% renewable (solar & battery) generation system

➢ Pay­-as-­you-­go retail service and theft detection to eliminate non­-payment

➢ Data to attract the financing necessary for scale.

The proof is in the pilot

Powerhive's first pilot project of 1.5kW was commissioned in 2012, catering to a small cluster of residential customers in the village of Mokomoni. Customers use Powerhive electricity for indoor and outdoor security lighting, mobile phone charging, and small appliances such as radios and televisions. Previously, these residents relied on kerosene for lighting and disposable batteries to power small appliances (e.g. radios). They frequently walked kilometres to central kiosks where they could pay to charge their cell phones.

The next three sites, serving approximately 1,500 people, were built in 2013 in the villages of Nyamondo, Matangamano, and Bara Nne. At 10, 20, and 50kW, they are capable of supporting larger clusters of users that include light commercial loads from customers such as welders, carpenters and millers. Previously, these commercial customers relied on diesel generators, which are costly to operate and difficult to maintain.

The solution has seen the average daily electricity usage increase and 90% of the pilot participants have a positive credit balance. Pilot participants are happily replacing their kerosene, battery, cell phone charging, and diesel expenditure with clean, reliable microgrid electricity from Powerhive powering community development.

Through a partnership with Equity Bank of Kenya, Powerhive has helped its customers to access credit for appliance purchases. In addition to seed funding, Powerhive has also provided business training to entrepreneurs­­.

By carefully tracking electricity use and commercial success of these customers, Powerhive identifies promising entrepreneurs and offers them a broader range of appliance financing and other commercial products.

The key challenge for Africa is not only to increase access and consumption, but to also ensure access to cleaner energy services and sustainable consumption so that communities will not pay the price for poorly planned energy developments in the future.

An energy future based on total energy access and a more equitable balance between decentralized and centralized energy investments is the best way forward.