Very important point Zahid...having strong institutional infrastructure (PPAs, market design, marked operators) is as important as the physical infrastructure i.e. transmission lines, generation capacity, reserve capacity, etc.
Interesting article, David. Can you share any examples from your business?
David Grant said:
This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."
South Africa is also currently plagued by load shedding due to insufficient generation capability.
Hello all, i am Robert Laporte, founder and CEO of Neutopia ecoSOLUTIONS inc, the world’s first Social Impact Sustainable Community company. We have eliminated most obstacles to affordable energy for Africa and have created a most unique business model that has attracted unlimited investment for global change. We are now simply seeking project locations. Our system can identify business cases within 10 minutes for any GPS Coordinate on the planet. I look forward to collaboration via Business Fights Poverty as our page will be up in the near future and forums such as this will stimulate ideas and immediate action plans.
....and Zahid, you mentioned you wanted some practical examples. It's hard to pick out just one, as access to reliable power stifles most in many parts of Africa. A couple weeks ago I was visiting a large rice farm in Tanzania we have funded, to convert waste rice husks to usable power. The lack of consistent power from the grid was causing them to rely heavily on diesel back-up, pushing energy costs up x4 and making their business - and the livelihoods of almost 6,000 farmers that supply them - in jeopardy.
Many of the factories we work with in East Africa are regularly out of power. That leaves them slower on meeting orders. As a result their overseas competition win the orders. Also, they cope with the lack of power by having a chunk of their capital tied up in generators that produce very expensive power. All making them less competitive.
There are so many ways that the energy gap impacts life - and business - in Africa, that it's almost the wrong question to ask. The better focus is on what development advancements could be made by increasing access to reliable, cost-effective power to Africans - or more a propos to this forum. How will closing the energy gap reduce poverty...?
That sounds intriguing, Robert. Where can we and others find out more?
Robert Laporte said:
Hello all, i am Robert Laporte, founder and CEO of Neutopia ecoSOLUTIONS inc, the world's first Social Impact Sustainable Community company. We have eliminated most obstacles to affordable energy for Africa and have created a most unique business model that has attracted unlimited investment for global change. We are now simply seeking project locations. Our system can identify business cases within 10 minutes for any GPS Coordinate on the planet. I look forward to collaboration via Business Fights Poverty as our page will be up in the near future and forums such as this will stimulate ideas and immediate action plans.
All our facilities have on-site generation capacity where there is a likelihood of power interruption, so we have not had any production impacts. There are of course costs associated with the capital outlay of buying on-site generators and operational expenditure to run them when there are power cuts.
Zahid Torres-Rahman said:
Interesting article, David. Can you share any examples from your business?
David Grant said:This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."
South Africa is also currently plagued by load shedding due to insufficient generation capability.
Thank you for sharing that example, Conall.
Conall O'Caoimh said:
Many of the factories we work with in East Africa are regularly out of power. That leaves them slower on meeting orders. As a result their overseas competition win the orders. Also, they cope with the lack of power by having a chunk of their capital tied up in generators that produce very expensive power. All making them less competitive.
One of the challenges I see for African countries in closing their energy gap is the momentum that needs to be maintained in terms of political drive and investment to keep the physical infrastructure being built continuously both in transmission and generation capacity. One response that is usually suggested is to complement that big centralised effort with decentralised energy projects e.g. solar but that also shows other challenges such as maintenance costs, scale, etc...what's your take on that?
First time user, and just cannot seem to figure out how to follow and participate in the discussion. Looks like every time a person says something u need to click on their reply and be redirected to their site. Is there not a single pane where we can follow and enjoy all conversations?
The broader economic impacts are stark though. A recent stat from the South African Department of Public Enterprises is that “Load shedding ... costs the economy anywhere between 20 billion rand to 80 billion rand (approximately 1.6 - 6.6 billion US$) per month”.
Zahid Torres-Rahman said:
Interesting article, David. Can you share any examples from your business?
David Grant said:This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."
South Africa is also currently plagued by load shedding due to insufficient generation capability.
David - that highlights one key issue - that smaller companies, who may not be able to afford on-site generation capacity, or for whom it represents a higher proportion of their costs, are potentially far more impact by the energy gap.
David Grant said:
All our facilities have on-site generation capacity where there is a likelihood of power interruption, so we have not had any production impacts. There are of course costs associated with the capital outlay of buying on-site generators and operational expenditure to run them when there are power cuts.
Zahid Torres-Rahman said:Interesting article, David. Can you share any examples from your business?
David Grant said:This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."
South Africa is also currently plagued by load shedding due to insufficient generation capability.
Ok - let's move onto the second question:
Question 2: What are the opportunities for business to be part of the solution to closing the energy gap?
Zahid Torres-Rahman said:
Thanks for sharing that example, Rodger. How do farmers overcome that - if they do, that is. Or does it simply mean they lose their harvest all together?
Rodger Chali said:Eastern Zambia cotton unable to be harvested due to lack of sufficient power to run the ginnery machinery.
They harvest by hand, but the project which would normally take two weeks to finish, might take 6 weeks and hence affect other projects. In short its question of watch and see. helpless scenario.
Last Fri at a Virgin Unite event in London Claire Reid founder of Reel Gardening, SA, said that because she faced so many power outages (in J’berg) she had taken some of her production processes back to manual labour.
I agree here - another example from Mozambique draws on this, Speaking to women in Northern Mozambique who had gained access to electricity through our Energy & Environment Partnership programme, the biggest impact they had seen through increased access to energy was actually better access to communication. They saw a distinct difference between those that had electricity - and as a result made use of radios, tv, mobile phones - and those that didn't, in both their outlook and new ideas they brought in.
Christopher Camponovo said:
There are so many ways that the energy gap impacts life - and business - in Africa, that it's almost the wrong question to ask. The better focus is on what development advancements could be made by increasing access to reliable, cost-effective power to Africans - or more a propos to this forum. How will closing the energy gap reduce poverty...?
This is very true – and goes all the way down to the individual entrepreneur level. There are obviously huge numbers flying around relating to the direct cost to economies of weak infrastructure, but it's hard to put a figure on the opportunity cost of entrepreneurs unable to start up businesses or grow. If you look at the World Bank's Doing Business rankings, you'll see the extraordinary cost that African entrepreneurs need to pay to access a connection.
Zahid Torres-Rahman said:
David - that highlights one key issue - that smaller companies, who may not be able to afford on-site generation capacity, or for whom it represents a higher proportion of their costs, are potentially far more impact by the energy gap.
David Grant said:All our facilities have on-site generation capacity where there is a likelihood of power interruption, so we have not had any production impacts. There are of course costs associated with the capital outlay of buying on-site generators and operational expenditure to run them when there are power cuts.
Zahid Torres-Rahman said:Interesting article, David. Can you share any examples from your business?
David Grant said:This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."
South Africa is also currently plagued by load shedding due to insufficient generation capability.
Christian - I'm one of those people who argues that central utilities are not the sole solution...and, as you say, there are a number of challenges with smaller distributed generation projects. One of the biggest problems is one you haven't mentioned -- that is, coming up with commercially viable models that can be financed. The challenge is that the traditional project finance model isn't working for these smaller projects in Africa -- due largely to actual and perceived risk on the part of lenders....
I guess this is where business can be part of the solution...by developing innovative financing models and promoting distributed generation to close the Africa energy gap.
Hi Robert. The easiest way to stay on top of the discussion is to track the feed on the right hand side of this page. Click on the the word "replied" after the name of the person commenting to be directed straight to their comment. The comments in this central panel are in time order. Also - we'll be doing a summary of all this afterwards!
Robert Laporte said:
First time user, and just cannot seem to figure out how to follow and participate in the discussion. Looks like every time a person says something u need to click on their reply and be redirected to their site. Is there not a single pane where we can follow and enjoy all conversations?