Infectious Memes

One of the most interesting revolutionary idea in sustainable energy is the idea of a distributed web-like electrical grid. The grid would act more like a bus (in the electronic sense) than like a one way pipe, and any house, factory or shop will be able to either supply it or draw from it, depending on their need and electricity production capacity, which could vary at different times of the day, week or year.The idea is powerful for multiple reasons. First it reduces the cost of utilizing alternative sources of energy. You don’t need to design for maximum energy requirements, since the grid will compensate for any shortage in energy that might arise. At the same time you can sell any excess generated (or harnessed) energy to the grid. There will be no need for batteries, which are typically a major part of the cost and complexity of an alternative energy solution.

The system will also be much more resilient and adaptable. The production of energy will be distributed and failure of a section of the power system will have lesser impact on the rest of it. The ramp up in energy production and consumption will be gradual, governed by market forces and will be considerably more democratic than current models.

The challenge with this model is two folds. The technologies needed to make it a reality are not fully developed yet. It is not just the cost-effective and easily deployable energy harnessing equipment (solar, wind, hydro, geothermal, etc.) that are not there yet, but the grid management systems that will be able to efficiently manage and account for millions of supply-consumption connections to the grid, and the market mechanism by which the dynamic price of electricity will be determined at any minute during the day.

The second challenge is existing infrastructure. The cost of the existing infrastructure is sunk cost. The amount of perceived waste is too high to make the transition to a new distributed system a natural one. This of course would be lesser of a challenge if the current economic and political climate allowed for the accounting of the environmental and health costs.

The end result is a chicken-and-egg-type dilemma. The high cost of creating a distributed and sustainable energy system is prohibitive when compared to the cheap cost of taping into the existing grid for cheap electricity, causing people to opt for choosing the latter most of the time unless motivated by conviction. On the other hand, without mass adoption, the status quo is likely to be maintained.

It is of course possible to stimulate change by policy or collective social will, but such approaches will take longer, and still be slowed down by the same limitations facing the economic route.

In those two challenges lies the opportunity for Africa.

Much of Africa suffers from complete lack of electricity or unreliable and often-interrupted electricity at best. 94% of Rwandans have no access to electricity. You might think that Rwanda is a small country with limited resources and a recent recovery from a brutal genocide and civil war, but the situation is not much better in other African nations. The one I am most familiar with is Nigeria, where even in the modern capital of Abuja, reliable and continuous electric power is a dream. Generators, their maintenance and fuel are significant unavoidable expenses for Nigerian businesses.

In my interaction with Nigerian businessmen and entrepreneurs, the number one reason they cite for not building their factories in Nigeria (and often opting to do it in South Africa instead) is the challenge of obtaining cost-effective and reliable electricity. The up front investment needed to build the energy infrastructure is prohibitive.

The lack of a reliable electric infrastructure is a real challenge to development in the African continent. And in the same way that Africa adopted the cell phone bypassing the time and labor intensive task of laying wires everywhere, Africa could bypass the traditional central electric generation system and jump to a distributed energy generation system.

By incentivising the local communities’ adoption of local and self-sustainable energy generation technologies, islands of local self-sustaining power system will emerge, growing in number and radius overtime until they merge.

The solution is already economically feasible when compared to the current cost of generators, gas and transportation (even in net oil exporting countries, which are often net importer of gas and diesel), but could be made even more feasible through subsidizing the acquisition of the technology and providing logistical and planning support for sharing energy sources within villages and urban communities.

The investment made by governments will also be easier to justify when compared to the cost of building central power generation plants and the networks required to distribute them.

The more interesting aspect is the opportunity to stimulate local scientific research and lay the ground for countless entrepreneurship opportunities. With technologies and business models to distribute and deploy them still being at the early stages, Africa might be the right place to develop them. Africa has a big local market for energy that is ideal for encouraging development of the technology, and promises a high return on investment, not just economically but from a social development perspective as well.

What is needed is for Africans to see the opportunity and make a decision to pursue it. And I say Africans here, because this is not necessarily a government-led initiative (although that would be ideal), but that could be encouraged by the African Development Bank, private enterprises, a coalition of universities or even global organizations such as the World Bank (duck).

This entry was posted on Monday, March 5th, 2007 at 6:12 pm and is filed under Technology, Development. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.