SILICON VALLEY, Calif. – Timothy Hennessy, the EVP of Sales and Marketing from the American battery company, Deeya Energy, spoke in an interview about the current state of electrical access for rural Africans and the social and economic potential electrification offers if the Electrify Africa Act is passed in Congress this fall.
President Obama’s Power Africa Initiative aims to leverage American private energy sector investments to support the development of new electricity generation in sub-Saharan Africa. Lack of access to affordable and reliable electricity prevents Africa’s economy from growing and stifles poverty alleviation.
The overall shared value lies in fostering economic growth in Africa in order to pave the way for more American investments and business. In sub-Saharan Africa, 589 million people–almost 7 out of 10 Africans–do not have access to electricity, and roughly 30 African countries face endemic power shortages. Obama’s Power Africa Initiative hinges on passage of the “Electrify Africa Act of 2013.”
Mr. Hennessy has over 25 years of experience in the power industry working in Africa, Europe, the USA and China. He is an expert on energy storage and has published over 25 international papers and holds 65 international patents. He played a pivotal role in formulating the law about the California Self Generation Incentive Program. Hennessy was President of Prudent Energy, a flow battery company based in China from 2009 until 2013.
Prior to Prudent Energy, he was Chairman and CEO of VRB Power Systems, Inc. He has held positions with other energy companies such as LECTRIX, PacifiCorp Energy Services, and ESKOM in South Africa. Hennessy was a founder and Principal of Power Quality Technology. Furthermore, Hennessy has served on the board of several public companies.
Hennessy explained that, at present, the cost of electricity for an African can be as high as 60-80 cents per kilowatt hour when using diesel generators. In the U.S., the average is 12 cents per kWh. More than 800 million people live in sub-Saharan Africa, yet only 30 percent have access to electricity.
Nonetheless, Hennessy sees opportunity to increase efficient and cheaper electrical access in Africa. Various electrical grids in Africa could adopt the latest innovations for power generation, including clean, renewable energy. Instead of a centralized grid with limited capacity and numerous vulnerabilities, there could be a network of micro-grids all over the African landscape. There are ways, said Hennessy, to get the cost down for the end consumer.
Timely solutions are important, given that Africa’s current grid expansion fails to keep pace with population growth. A 2012 market trend report about the African lighting market published by the International Finance Corporation stated that by 2030, Africa’s un-electrified population could grow to almost 700 million people–becoming the largest un-electrified market worldwide–if action remains limited.
In general, Africans spend 7 percent of their income on energy. For rural and poor Africans who do not have access to the electrical grid, fuel-based lighting is the usual alternative. However, kerosene lighting is taking a toll on poor Africans, and the expected rise in oil prices will only make it worse. The cost burden for poor, rural African households can range between 10 and 25 percent of their monthly budgets. Furthermore, rural Africans normally have to pay a premium for kerosene compared to their urban counterparts.
Access to cheaper and improved lighting, like solar powered lights, would have multiple benefits for this population. The money saved could be invested into education or entrepreneurial activities, and the impact on health and the environment would be spared from smoky kerosene lamps. Furthermore, access to electricity means refrigeration for medications, water pumping, and improved communications with radio, TV and phones–all essential for a viable economy.
Hennessy noted that one of the major market drivers for rural electrification is the growing mobile phone usage. As of 2012, the IFC reported that there were approximately 735 million mobile phone subscriptions in Africa, of which 175 million are not connected to the grid. Off-grid mobile phone subscriptions are expected to be as high as 400 million by 2015.
This correlates with the expected GDP growth in Africa. At the end of 2013, GDP growth is expected to hit 5.4 percent. Six of the world’s ten fastest-growing countries have been in the African continent over the past decade. This is due in large part to 75 percent of the sub-Saharan population being under the age of 30–a young, energetic, entrepreneurial population that holds tremendous potential as consumers and manufacturers. Consumer expenses in Africa are expected to grow to $1.4 trillion by 2020, $520 billion more than in 2008.
Hennessy described the way the off-grid mobile phones are maintained–phone users may walk several kilometers up to three times a week to get to a power vendor who sometimes gets their source from a car battery, while rural telecom tower operators run their cell sites primarily using diesel engines with resulting high costs.
If passed, the Electrify Africa Act will strengthen the American government’s position to promote and facilitate the development of energy resources in Africa. Currently, China is directing nearly $2 billion to African energy projects and leveraging Chinese energy companies. The Electrify Africa Act would promote partnerships between the U.S. Agency for International Development and the American private energy sector.
It would call on the Trade and Development Agency to broaden the private sector engagement and influence the World Bank and the African Development Bank to invest more in electrifying sub-Saharan Africa–all at no additional cost to U.S. taxpayers.
Taking in developmental best practices, the USAID has already been leveraging private investments. Since 2005, Africa has attracted more investment than aid. Current USAID private-sector energy partners for powering Africa include: Washington, D.C. based Symbion-Power; Fairfield, Connecticut based General Electric; Nashville, Tennessee based Hecate Energy, LLC; and Reno, Nevada’s Ormat.
More American energy companies, especially renewables, could benefit from investing in Africa. Many clean-energy companies call Silicon Valley home. Deeya Energy is one of them. It is a flow battery company that has developed a way to store wind and solar energy–the key to enabling rural villages to be self-sustaining from a power perspective.
Their key markets are Africa, India and the USA. Deeya Energy’s mission is to be the most cost effective stationary energy solution that provides the lowest total cost of ownership. Deeya is an example of Silicon Valley technological innovation that could help make electricity and its benefits more affordable for most Africans.
– Maria Caluag