NEWS African Lights: Microgrids Are Bringing Power to Rural KenyaOctober 27, 2015

27 OCT 2015: Yale E360 SPECIAL REPORT

African Lights: Micro­grids Are  Bring­ing Power to Rural Kenya

Small-​​scale micro­grids are increas­ingly seen as the most promis­ing way to bring elec­tric­ity to the 1.3 bil­lion peo­ple world­wide who cur­rently lack it. In Kenya, an inno­v­a­tive solar com­pany is using micro­grids and smart meters to deliver power to vil­lages deep in the African bush. 

by Fred Pearce

Plug­ging into elec­tric­ity for the first time is a big deal. Ask Peter Okoth. Until late last year, he strug­gled to make a go of his bar on the main street in Enta­sopia, a small, dusty town in Kenya’s Rift Val­ley, five hours from the cap­i­tal Nairobi and 30 miles from the near­est grid power line. Then, he hooked up to a new solar-​​powered micro­grid that serves local homes and businesses.

Now Okoth has eleven light bulbs, he says proudly — and enough power to run a TV and a sound sys­tem for his cus­tomers. Sev­enty peo­ple show up some evenings to watch, lis­ten and buy his food and drink. His prof­its will soon

buy a refrig­er­a­tor to keep the beer cold in the sear­ing desert heat, and a big screen to show satel­lite sports chan­nels. “We will be stay­ing open till mid­night,” he says. And he has just bought con­struc­tion mate­ri­als for ten guest rooms. “When you next come, you must stay here.”

Most set­tle­ments in rural Kenya are dark at night. Only a third of the East African country’s res­i­dents have access to the national power grid. Har­vest­ing the sun makes obvi­ous sense in places like Enta­sopia. Hundred-​​dollar pho­to­voltaic (PV) pan­els for instal­la­tion on home roofs have been on sale for years. But the mea­ger five watts that most such sys­tems pro­vide is only enough to power a cou­ple of LED lamps each evening and a mobile phone charg­ing point, and the bat­ter­ies con­stantly need replac­ing. The coun­try is full of dis­carded PV cells, defunct bat­ter­ies, and dis­ap­pointed customers.

But now, larger cen­tral vil­lage PV units linked by under­ground cable to dozens of houses and busi­ness are start­ing to trans­form lives. For a ten-​​dollar instal­la­tion fee, the peo­ple of Enta­sopia can con­nect to a vil­lage micro­grid and buy a share of a thou­sand times as much power. Vil­lage homes are fill­ing with house­hold appli­ances like refrig­er­a­tors and wash­ing machines, and the busi­nesses on the main street are pow­er­ing every­thing from weld­ing equip­ment and fuel pumps to hair driers.

Micro­grids are small elec­tric­ity gen­er­a­tion and dis­tri­b­u­tion sys­tems that oper­ate inde­pen­dently of larger grids. Typ­i­cally they rely on local sources of renew­able energy, such as river flows, wind, bio­mass, or, most widely, the power of the sun. There are no offi­cial sta­tis­tics on how many there are, or what their total power out­put is. But a recent study by U.S.-based Nav­i­gant Research, which stud­ies new energy tech­nolo­gies, sug­gested that their com­bined gen­er­at­ing capac­ity might now exceed 750 megawatts world­wide. They are, says Daniel Kam­men, of the Uni­ver­sity of California,

Micro­grids answer a crit­i­cism of rooftop solar, which some say can lock com­mu­ni­ties into energy poverty.

Berke­ley, “a true hot-​​bed of inno­va­tion pop­ping up all over the world.”

n coun­tries such as Kenya, whose economies are grow­ing faster than either con­ven­tional, cen­tral­ized elec­tric­ity gen­er­a­tion or power grids, the poten­tial of micro­grids to elec­trify pow­er­less com­mu­ni­ties is huge. Many believe they pro­vide the only likely route to deliver UN secretary-​​general Ban Ki-moon’s goal of bring­ing elec­tric­ity to the 1.3 bil­lion mostly rural peo­ple glob­ally who cur­rently lack it. And they answer a charge often made against roof-​​top solar power sys­tems, which crit­ics say can lock com­mu­ni­ties into energy poverty by offer­ing only tiny amounts of power for each household.

Enta­sopia is as remote as it gets. It is close to the bor­der with Tan­za­nia, at the end of a bumpy lat­erite road that winds its way from Mag­adi, a town some 30 miles to the east. Its sin­gle street com­prises houses fronted by tin-​​roofed build­ings with busi­nesses rang­ing from butch­ers and gen­eral stores to bars and mobile phone shops. It is where Maa­sai live­stock herders in their bright tra­di­tional dress come to buy and sell, top­ping up their mobile phones before dis­ap­pear­ing back into the bush. And it is where peo­ple from other Kenyan tribes such as the Luo, Kikuyu and Kamba have con­gre­gated since an irri­ga­tion project fed by rivers from nearby hills started water­ing fields of fruit and veg­eta­bles for sale to Kenyan cities.

Joseph Nyag­ilo, field man­ager for micro­grid pio­neer Stea­maCo, picked out Enta­sopia for a micro­grid in 2014 because of the town’s strong busi­ness activ­ity, which he believed could ben­e­fit from the extra power that a such a

sys­tem can pro­vide. He is proud of the transformation.

At the vil­lage fill­ing sta­tion, Nancy Kaisa uses solar power to pump fuel. “I had a diesel gen­er­a­tor before, but this is much cheaper and eas­ier,” she explains. John Owino, a repair­man squat­ting in the sun out­side his work­shop, says he can now carry out weld­ing repairs that once had to be sent to dis­tant towns. And Okoth, the entre­pre­neur­ial bar boss, said lights meant he can now get up and start work at 4 a.m. Only the owner of the kiosk sell­ing rooftop PV pan­els seemed gloomy. He was get­ting on his motor­bike to find sales in a neigh­bor­ing vil­lage that did not have a microgrid.

“Light from roof sys­tems can improve qual­ity of life, but only micro­grids can lift peo­ple out of poverty,” says Emily Moder, SteamaCo’s soft­ware man­ager. “They are the next step up. And by allow­ing peo­ple to build busi­nesses and another source of income, they improve the resilience of rural com­mu­ni­ties against drought or cli­mate change.”

But Stea­maCo is going fur­ther. In the past three years, it has been pio­neer­ing the use of smart meters in micro­grids, and it now has 25 vil­lage grids across Kenya, sup­ply­ing up to 10,000 peo­ple and busi­nesses. The

SteamaCo’s solar pan­els were installed in the vil­lage chief’s yard at a cost of $75,000.

idea is to link the sup­ply hard­ware to pre-​​payment ser­vices that use the country’s pop­u­lar mobile phone-​​based bank­ing sys­tem, M-​​Pesa. Cloud-​​based soft­ware keeps track of sup­plies and pay­ments, alert­ing cus­tomers by text mes­sag­ing when their credit runs low. There are no con­tracts, no bills, and no rev­enue col­lec­tion prob­lems. Cus­tomers can top up their credit, in amounts as small as a few cents. But once the credit expires, the lights go out.

Entasopia’s PV hub, rent­ing space in the yard of the vil­lage chief, cost $75,000 to install. It has 24 pan­els with a max­i­mum gen­er­at­ing capac­ity of 5.6 kilo­watts. A con­trol box below houses the smart meter that mea­sures and con­trols power to each of the 64 cus­tomers in town and also com­mu­ni­cates remotely with pay­ments soft­ware, cut­ting off power when credit is exhausted. In remote areas such as Enta­sopia, where wi-​​fi is largely absent, all data is sent by SMS. “One bar of mobile sig­nal is all we need,” says Moder. “We can be everywhere.”

The site agent keep­ing a day-​​to-​​day eye on things in Enta­sopia is John Pam­bio, a young elec­tri­cal engi­neer liv­ing down the street from the vil­lage chief, who also runs a shop repair­ing mobile phones and TVs. Pam­bio cleans the PV cells once a week and trou­bleshoots for cus­tomers suf­fer­ing out­ages, trips, or dam­aged cables. The biggest power demand, he says, is at night, when lights, TVs, and sound sys­tems come on. That is not a great match with solar energy pro­duc­tion, which of course is in day­light hours. But, like most vil­lage hubs, Enta­sopia has bat­tery stor­age suf­fi­cient for at least 24 hours of use.

Com­mer­cial micro­grid PV sys­tems still charge prices for power that are quite high. Stea­maCo — and the micro­grid part­ners that it increas­ingly licenses — charge between two and four dol­lars per kilowatt-​​hour. That deliv­ers light­ing more cheaply than kerosene, and power more cheaply than a diesel gen­er­a­tor. But it is dou­ble the price of state-​​subsidized grid power in a city like Nairobi.

Stea­maCo co-​​founder and chief tech­ni­cal offi­cer Sam Duby believes that, just as micro­grids are chang­ing life in vil­lages like Enta­sopia, so they have the poten­tial to trans­form the prospects for scal­ing up solar energy else­where in Africa and the devel­op­ing world.

First, replac­ing roof sys­tems with vil­lage micro­grids pro­vides for the first time the amount and reli­a­bil­ity of power that rural peo­ple want, which is enough to change their lives and liveli­hoods. Sec­ondly, the smart meter­ing that links vil­lage sup­ply sys­tems to pay-​​as-​​you-​​go charg­ing net­works, resolves the con­stant bug­bear of vil­lage power sys­tems — how to collect

Micro­grids pro­vide the amount and reli­a­bil­ity of power that rural peo­ple want, which is enough to change their lives.

rev­enues from cus­tomers in poor and remote places. And thirdly, the data sup­plied by the smart meter­ing has the poten­tial to unlock the major financ­ing that “Steama” is Swahili for “power.” But for Duby, the power is as much about data as elec­tric­ity. Now, when he and his poten­tial investors switch on their lap­tops in Nairobi and access the dash­board where data from the vil­lages and pay­ments sys­tems is col­lated and ana­lyzed, they can probe how thou­sands of the world’s poor­est peo­ple use elec­tric­ity and what encour­ages them to use more.

“Nobody has had this kind of data before,” says Moder. “It low­ers bar­ri­ers to invest­ment, because the data pro­vide greater cer­tainly about pay­back. You can give investors real pro­jec­tions that aren’t a total guess.” Duby says the data also offer gov­ern­ments or donors the chance to directly sub­si­dize solar power as it is pur­chased — a micro­grid ver­sion of the feed-​​in tar­iffs that have kick-​​started solar and wind power in Europe.

The sto­ries the data from places like Enta­sopia tell are not all good news. For instance, there is the expe­ri­ence of Mar­garet Mwangi, who set up a hair salon in the room behind her tiny gen­eral store across from Okoth’s bar. When Mwangi got solar power, she bought a refrig­er­a­tor for sell­ing cold drinks and a blow-​​drier for the salon. But each head of African hair takes 30 min­utes to dry, and the power needed is cost­ing too much. “Last month I paid 14,000 shillings [about $140] for elec­tric­ity,” she com­plains. “I can’t afford that.” She has stopped pay­ing, and her shop is now dark.

The rea­son for her prob­lem is clear, says Nyag­ilo, the SteamCo field man­ager. Mwangi’s blow-​​drier is among the biggest power users in the vil­lage. Back in Nairobi they can see the power surge when she turns it on. Thirty min­utes of use costs dou­ble the 50 cents extra that Mwangi charges her cus­tomers for the blow dry, but she says she dare not charge more. “Mar­garet used to be our biggest cus­tomer here. We want her to stay,” Nyag­ilo says. He is plan­ning to offer her a spe­cial deal to get her back on line — maybe a flat-​​rate $50-​​a-​​month charge.

Back at SteamaCo’s head­quar­ters in a small busi­ness park out­side Nairobi, Moder opens up the data dash­board on her lap­top. Zoom­ing in on the Enta­sopia num­bers, she trawls to see how much power Mwangi, Okoth, and their other cus­tomers tap from the micro­grid, and how much they pay and when. Most cus­tomers top up 50 cents each evening to watch TV and keep the lights on. Some lose track of what they are pay­ing and need help. “We need dif­fer­ent tar­iff struc­tures for dif­fer­ent peo­ple,” she says. “But

Even though our cus­tomers are poor, they have pur­chas­ing power and know how to use it.’

with smart meters that is easy to do.”

SteamaCo’s ori­gins lie in an NGO called Access:Energy set up in 2009 by Duby and cur­rent CEO Harr­sion Leaf on the shores of Lake Vic­to­ria. It trained local crafts­men in mak­ing wind tur­bines from scrap metal. But its tech­nol­ogy has come a long way. Renamed Stea­maCo, it installed its first micro­grid sys­tem with smart meter­ing in 2013, on Remba, a remote fish­ing island in Lake Vic­to­ria. Since then, expan­sion has been fast. By mid-​​October, the com­pany had 25 vil­lage grids across Kenya, with an addi­tional five in Tan­za­nia, Benin, Rwanda and Nepal, and five more ready for com­ple­tion in Kenya by year’s end. “In 2016, we want hun­dreds of grids in dozens of coun­tries,” says Moder.

In its first years, the com­pany financed its work with aid money and research grants. But early investors also included the Vul­can Cap­i­tal, set up by Microsoft founder and phil­an­thropist Paul Allen. And now Duby and Leaf are rais­ing money from equity funds that want a com­mer­cial return from the rev­enues of sell­ing elec­tric­ity. “We want to show this busi­ness can be prof­itable,” says Moder. “Even though our cus­tomers are poor, they have pur­chas­ing power and know how to use it. They don’t want char­ity, and we treat them as respon­si­ble con­sumers.” For instance, with rev­enues above $10,000 in its first year, SteamaCo’s micro­grid in Enta­sopia is likely Stea­maCo pro­vides a very per­sonal ser­vice. Nyag­ilo has toured hun­dreds of remote vil­lages in the past three years, knock­ing on doors and prob­ing busi­ness accounts to con­duct instant assess­ments of their suit­abil­ity for a micro­grid. And he keeps return­ing to check on his cus­tomers. These days,

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when he vis­its Enta­sopia, he is besieged by peo­ple who turned down con­nec­tion the first time around but now want to sign up.

Soon such per­sonal ser­vice from one of the company’s top offi­cers will prob­a­bly be replaced by more anony­mous oper­a­tions, as com­pa­nies pur­chase SteamaCo’s hard­ware and soft­ware. Most likely, they will com­mu­ni­cate with cus­tomers via call cen­ters. But, if smart micro­grids take hold at the pace their pro­po­nents hope, the change to rural economies and lifestyles in Kenya and else­where in the devel­op­ing world could be mas­sive and permanent.

When the sun sets in the Rift Val­ley now, the lights come on in Enta­sopia. Instead of retreat­ing into their homes, vil­lagers hit the street, shop at the stalls, and head for the bars, where drink­ing cool beer and watch­ing the early-​​evening TV news is still a nov­elty. Soon Peter Okoth and rival bar oper­a­tors will switch on their sound sys­tems. The night is young.

On the road out, Nyag­ilo passes the neigh­bor­ing vil­lage of Ngu­ru­mani, which is swathed in dark­ness. “This,” he says, “is our next vil­lage for a microgrid.”