In Africa, 650 million people don’t have electricity, don’t have access to power, don’t have access to the industry. People who would otherwise have been very productive if they’d had the means if they had the capital.
“It’s really important that we don’t lose sight of these people in our bid to grow our economies and become more industrialized.” – LAURA KIPLAGAT, Senior Business Manager, Powerhive
One of the toughest problems in the world is: how do you bring people out of extreme poverty without wrecking the climate in the process?
Conventional wisdom says it will require the burning of enough fossil fuels to cancel out any progress the developed world makes on emissions. but here in rural Kenya, a small experiment is underway to see if it’s possible to have the economic uplift without the environmental catastrophe.
What we’re contributing here is the potential to grow. so essentially, no one is left behind in the race to develop, in the race to making our energy more green.
“The first time I had power in my village was in the year 1990. before that, there was no power at all completely. the rural setup, the standards of living were extremely, very very low.” – ZACHARY AYIEKO, Former CEO, Kenya Power
Zachary Ayieko has spent much of his career trying to bring electricity to rural Kenyan villages like the one he grew up in. as an executive at the national power company, he helped expand Kenya’s electricity access from 18% of the population in 2010 to 65 percent in 2018 the highest in mainland east Africa.
“The Kenyan government has done quite a lot in providing universal power. but they have not had enough resources to be able to provide access to every household in the country. The Kenyans who have got no power are based purely in the rural areas. once the electricity provided, the economic empowerment of people goes very high.” – ZACHARY AYIEKO, Former CEO, Kenya Power
With millions of rural Kenyan’s still disconnected from power, A small green energy startup is attempting to bridge the gap.
“Powerhive is the first privately licensed utility in Kenya. we currently operate about 25 village-level microgrids. We’re generating our power from solar. We’re storing that energy in batteries. When I started in this business 20 years ago, the price per watt of a solar panel was five, six dollars. Now it’s 20 cents. It’s opened up a huge opportunity in Africa to deliver energy.” – CHRISTOPHER HORNER, CEO, and Founder, Powerhive
Micro or mini grid like the ones built by power hive is a power system that supplies enough electricity for a small community. schools and homes get electric light and internet service. Agricultural labor, like maize milling, doesn’t have to be done by hand anymore. Electric pressure cookers eliminate the need to chop down trees or burn charcoal to make meals. All of these things raise the standard of living. But there’s one big problem.
“When we first came to Kenya, we quickly realized that our consumers are too poor to pay for energy.” – LAURA KIPLAGAT, Senior Business Manager, Powerhive
Manigrids have been around for a long, long time. The problem is, is that there hasn’t been an economic model to support the long-term operations of these grids.
“It forced us to have to think about how we can support our customers in generating enough income that they can sustain themselves, and then also create a good energy customer for us as a business. In most rural communities in Kenya, subsistence farmers would keep maybe 20 chicken, and these would be primarily for eggs they might sell or consume themselves, really.” – LAURA KIPLAGAT, Senior Business Manager, Powerhive
But electricity, along with some startup capital from Powerhive, has changed all that. Powered appliances like heat lamps and incubators can transform chicken rearing into a profitable business. It’s a virtuous cycle for Powerhive. They give their customers the money and guidance to start businesses that use their electricity, and then a portion of the income from those businesses pays for the electricity.
“You also find those community members who do see successful businesses get inspired to do that themselves. And all of that wouldn’t have happened if they hadn’t had the exposure, or understood how it can be done, or that it can be done.” – LAURA KIPLAGAT, Senior Business Manager, Powerhive
Recently, Powerhive has invested in a new business: Leasing electric vehicles to people in the villages and in nearby Kisii Town.
“I’m running the ground operations for this ev project in this region of kenya, what we’re trying to do here is convert all conventional bikes from petrol engines to electric motors. Maintaining electric bikes are way more cheaper than maintaining a conventional bike in terms of servicing. The way we have planned to roll out the program is we’ll be having swapping stations, whereby riders around a certain area could be able to change batteries whenever they run out of batteries. And the rate at which we’ll be offering the battery swaps will be much less than what they pay at the pump for fuel for the same conventional bikes.” – BRIAN ODOYO, E-Mobility Project manager, Powerhive
Beyond just getting from place to place, motorbikes are key to generating income in this region but they’re often used as taxi vehicles or for transporting goods to the market. And while making the switch from gas to electric is obviously cleaner, there are some more tangible benefits as well.
“Electric vehicles, they have fewer moving parts. They don’t require oil. you know, here people are spending around 10 us dollars every two weeks for the maintenance costs. So if we can save somebody one or two dollars a day, it’s a very, very big deal. We’ve just introduced our electric motorcycles to a whole group of local riders. The market here has really, really been very receptive, namely because it saves them money and because it performs better than what they’re used to using. You’re seeing this whole revolution, I would almost call it in terms of this adoption of electric mobility all over the world. so it’s just a matter of time before that adoption happens here and everywhere else in the world. I’m convinced of it.” – CHRISTOPHER HORNER, CEO, and Founder, Powerhive
It’s still early days for mini grid companies like Powerhive, and it remains to be seen how big the industry’s impact can be.
A study by BloombergNEF found that electricity from solar hybrid mini-grids is still expensive for many rural customers, and the sector suffers from a lack of investment.
Meanwhile, large-scale renewables are booming. bulk solar and wind are the most competitive new sources of energy in most of the world today. But with hundreds of millions of people still living beyond the reach of major grids, there’s a massive opportunity to improve lives without the climate paying the cost.
“Our business model, if it works, you know can really change what development means. and what we’re trying to do is create a model that can be deployed anywhere in rural communities across the globe.” – LAURA KIPLAGAT, Senior Business Manager, Powerhive
“We have hundreds of millions of people that are going to be joining the modern economy. And you know these customers cannot do so in a carbon unfriendly way. And here in kenya, we’re showing that you can sort of create this model, which, you know, we hope is actually going to serve africa for generations.” – CHRISTOPHER HORNER, CEO and Founder, Powerhive