Just over a year ago, a friend asked me to contribute a writeup to her blog on Innovation. I've reproduced it below, especially as this is a topic which is near and dear to my heart. Enjoy.
Some of the key questions facing the growing economies in Africa - especially in regards to improving infrastructure and creating new avenues for revenue generation – revolve around energy. The how, where, which, who and what of energy.
How can Africa's vast potential to generate energy be harnessed?
Where will this energy come from?
Which forms of energy will be exploited?
Who will be responsible for developing these energy sources - the government or private enterprise?
What measures will be taken to ensure the sustainability - not just the renewability - of said energy?
As is usual with questions like these, there are easy answers which require complex solutions, not to mention an acute awareness of the infrastructure and socio-political climate on the ground.
This space is not enough for these questions to be answered with the required depth and technical detail, but I'm of the opinion that infrastructure development in Africa has to go past the fossil-powered 20th century and be driven by sustainable sources of energy. One of these is microgeneration, which I rank highly due to its ability to aid in development and revenue generation.
Microgeneration is the production of power that is less than 50 kW, enough to power most homes and small businesses. It is not a new concept by any means; in fact, energy consumers in urban parts of Africa where there are frequent outages are already involved in microgeneration. Yes, your noisy Chinese-made, diesel-guzzling, air-polluting generators!
The twist this time is to be able to duplicate this energy production in a sustainable fashion - solar, wind, hydro...you get the drift.
The cost required to install solar photovoltaic systems or geothermal systems or even a small windfarm in a remote desert area may be substantial, but what if this cost was passed on to businesses, rather than to consumers? Most of the power consumed in Africa today, and most of the power that will be consumed if the continent is develop in line with its potential, is consumed by the large skyscrapers and industrial plants in urban metropolises. Unfortunately, this power is mostly generated via the diesel generators referenced above.
What if governments were tasked with providing power to residential areas only, while businesses focused on harnessing their microgeneration? After all, diesel is a recurring expense and cannot be written off any tax books, whereas the wind farm in question would be a capitalized cost that can provide some tax breaks to business users.
Businesses can sell excess power back to the national grid and having a steady cost of energy can allow for better financial forecasting, boosting the bottom-line. This is a technology and process that can pay for itself if harnessed properly.
GovernmentsFreed of their obligations to corporate consumers, national grids can then focus on providing power to citizens as well as the ability to draw upon the excess power not used by the microgeneration plants owned by the businesses. Also, with a diverse array of energy streams – conventional, wind, solar, geothermal and hydro – to draw upon, the power utilities can optimize their delivery systems to minimize cost to themselves and the end-user. This can all be done without any excessive dip into treasury funds.
CitizensNo longer dependent on inefficient, loud, poisonous and environmentally-harmful generators, the citizens can lead healthier lives, while also paying lower costs for energy delivery. The availability of microgeneration can be extended to the home front for those owners and communities with the wherewithal. Cheaper power will also provide SMEs who don't have the economic robustness of large businesses the ability to sustain their ventures and drive market activity exponentially.
Microgeneration could well be the future of African power generation and economic activity. It provides a win-win-win-win for all stakeholders involved - businesses, governments, citizens and the environment. It will require some paradigm shifts in the way African financial houses operate, as well as in government regulations, but it is this writer's opinion that the benefits stand to outweigh the costs in the long run…and by a wide margin.