Digital tech in solar sector will be big help to emerging countries
The authors of a new report say digital innovation will be key in closing the power supply gap and driving off-grid solar market growth
New technologies that revolutionise online payments or the tracking of digital information are set to drive more solar power installations in emerging markets in Africa and Asia, according to a new report by an international renewable energy association.
The report by SolarPower Europe published last week states that the digitalisation of the solar sector such as the use of blockchain technology to track supply and demand, and pay-as-you-go for solar is relevant for emerging and developing countries since it can enable them to leapfrog elements of traditional power systems in terms of both technology and regulation.
This will help accelerate electrification, improve service delivery, and reduce electricity costs, the report's authors said.
SA is in the midst of an electricity crisis, with Eskom recently resorting to stage six load-shedding for the first time, the equivalent of dropping 6,000MW from the grid.
Eskom, which supplies virtually all SA’s power, is hamstrung by debt of R450bn, maintenance issues and design flaws at the Medupi and Kusile power stations. Ratings agencies have identified the state power utility as the single largest risk to the economy.
Mineral resources and energy minister Gwede Mantashe said recently that he would be taking steps to develop more electricity generation capacity, including from independent power producers (IPPs) — the main producers of solar and wind energy. Increased use of solar and wind energy would reduce SA’s reliance on coal, which is used to generate the bulk of electricity.
The SolarPower Europe report highlights that about one-billion people — mostly concentrated in South Asia and Sub-Saharan Africa — still live without access to electricity, and for hundreds of millions more, electricity is simply unreliable or too expensive.
The systemic lack of access to sustainable, secure and affordable electricity is deterring social and economic development in emerging economies, and leaving economic opportunities untapped. While the number of people gaining access to electricity has been steadily increasing in recent years, governments need to accelerate efforts if the world is to meet the sustainable development goal and ensure access to affordable, reliable, sustainable and modern energy for all by 2030, according to the report.
The authors say digital innovation will be key in closing the electricity supply gap including driving off-grid solar market growth.
“One way to ensure access to electricity for all is by extending the grid in places where the grid does not exist or where the grid is simply too weak and unreliable,” the report said.
However, extending grid-based electricity has important hurdles including connecting to an already weak transmission and distribution grid, insufficient power generation capacity to meet the electricity demand, high costs of extending the electricity network to remote areas, or simply a lack of affordability to pay for the electricity.
“Off-grid electrification has proved to be an interesting alternative to electrify remote areas or regions where the grid is too weak and unreliable,” according to the report.
Off-grid electrification includes the deployment of mini-grids. A mini-grid is a network of small-scale electricity generators, and possibly energy storage systems, that supplies electricity to a localised group of customers.
Mini-grids are small networks that can be independent of a nearby grid or can be connected to the main grid. They are being rapidly deployed to customers where the utility grid is absent or has failed. Globally, at least 19,000 mini-grids installed in 134 countries provide electricity to about 47-million people, most of them in rural areas, according to the SolarPower Europe report.
Emerging markets in Asia have the most mini-grids installed, while Africa has the largest share of planned mini-grids.
New payment technologies could also accelerate the deployment of solar. The off-grid solar sector has been at the forefront of leveraging technological innovation and digital solutions to reach as many customers as possible.
According to the SolarPower Europe report, a new and increasingly common digital solar business model in frontier markets is pay-as-you-go (PayGo) solar.
“Digital innovation has created a sweet spot — delivering excellent products and services for customers, enabling low-cost operations for companies, and protecting assets and revenue streams for investors. The business model allows customers to pay for their off-grid solar product in small instalments.”
The authors of the report highlight East Africa where companies use the ubiquity of cellphones to allow customers to pay their regular instalments with mobile money, such as M-Pesa in Kenya.
“There is evidence PayGo solar unlocks benefits for its users beyond access to clean and affordable electricity. People who have never had access to financial services and banks can build a credit history with PayGo providers and gain eligibility with formal financial service providers. In addition, solar home systems enable many customers to work and earn more, leading to reported improvements in quality of life, health and safety,” the report states.