Tuesday, June 20, 2017

Solarizing Africa is good business

Back in February I blogged about how China with a vision is Africa’s all weather friend.

The theme of this report is that, while western nations, especially the U. S., lock down and adopt isolationist policies, China is forging full steam ahead. Oops. That’s a bad metaphor. China is building electric trains connecting East African countries and state-of-the-art international airports to boost African tourism.

In late 2016 Mr. And Mrs. Scriber witnessed first-hand the Chinese airport-building going on around Victoria Falls at the border of Zambia and Zimbabwe. That led me to conclude that given the current administration’s nationalistic, isolationist, rather vision-less reflexes were likely to open a political and economic vacuum that would be exploited by our global competitors, notably the Chinese.

Let’s close with a quote of the day: “The Chinese have a vision.” The above snippets indicate that the U. S. Does not. And that is likely to get worse in the Trump/Bannon isolationist alternative universe. The vacuum left by the U. S. withdrawal is being filled by Africa’s “all weather friend,” China.

That may be an overreaction. The U. S. is investing in African nations but in a different way. Bill McKibben writes in the New Yorker about The Race to Solar-Power Africa. American startups are competing to bring electricity to communities that remain off the grid.

Electrifying Africa is one of the largest development challenges on earth. Until recently, most people assumed that the continent would electrify in the same manner as the rest of the globe. “The belief was, you’d eventually build the U.S. grid here,” Xavier Helgesen, the American co-founder and C.E.O. of Off-Grid Electric, told me. “But the U.S. is the richest country on earth, and it wasn’t fully electrified until the nineteen-forties, and that was in an era of cheap copper for wires, cheap timber for poles, cheap coal, and cheap capital. None of that is so cheap anymore, at least not over here.”

Solar electricity, on the other hand, has become inexpensive, in part because the price of solar panels has fallen at the same time that the efficiency of light bulbs and appliances has dramatically increased. In 2009, a single compact fluorescent bulb and a lead-acid battery cost about forty dollars; now, using L.E.D. bulbs and lithium-ion batteries, you can get four times as much light for the same price. In 2009, a radio, a mobile-phone charger, and a solar system big enough to provide four hours of light and television a day would have cost a Kenyan a thousand dollars; now it’s three hundred and fifty dollars.

Off-Grid Electric is an example of what is happening to electrify Africa.

Because many of Off-Grid’s potential customers have experience with bad products, or know someone who has, the company takes extra steps to build trust with its clients. After an Off-Grid installer shows up on his motorbike, he opens the product carton with great solemnity; in an Ivorian village, I watched along with seventeen neighbors, who nodded as the young man held up each component, one by one. He then climbed onto the roof of the house, nailed on a solar panel about the size of a placemat, and used a crowbar to lift up the corrugated-tin roof to run the wire inside. He screwed the battery box to the cement-block wall and walked the customer through the process of switching lights on and off several times, something the man had never done before. The company also offers a service guarantee: as long as customers are making their payments, they can call a number on the box and a repairman will arrive within three days. These LightRiders, as the company calls them, are trained to trouble-shoot small problems. They travel by motorcycle, and if they can’t make repairs easily they replace the system with a new one and haul the old unit back to headquarters.

This sales-and-installation system presents some engineering challenges. When the company expanded into Ivory Coast, last year, it had to redesign its packaging to fit on the smaller motorcycles used there. It also runs into problems coördinating coverage across a vast area where most houses don’t have conventional addresses. “We had to build our own internal software to make it possible,” Kim Schreiber, who runs Off-Grid’s marketing operations in Africa, said. “We optimize, via G.P.S. coördinates, the best routes for our riders to take. The LightRider turns on his phone every morning, and he has a list of his tasks for the day, so he knows what parts to take with him.”

A little light has revolutionary consequences.

The arrival of electricity is hard for today’s Westerners to imagine. Light means differences in sleeping and eating patterns and an increased sense of safety. I talked with one Tanzanian near Arusha who had traded in a kerosene lamp for five Off-Grid bulbs, including a security light outside his door that went on automatically when it got dark. “Crime is here,” he said, “but also dangerous animals. Especially snakes. So it’s good to have lights.” Everywhere I went, I met parents who said that their children could study at night. “You can feel the effects with their grades now at school,” one Ivorian father said. Several town chiefs told me that they hoped to get classroom computers, and one planned to mechanize the well so that townspeople would no longer need to pump water by hand. Farmers in West Africa were getting daily weather reports from Farmerline, a Ghanaian information service that uses G.P.S. to customize the forecasts. “If a farmer puts fertilizer on the field and then it rains, he loses the fertilizer—it washes away,” Alloysius Attah, a young Ghanaian entrepreneur who co-founded the service, told me. “And the farmers say they can’t tell the rain anymore. My auntie could read the clouds, the birds flying by, but the usual rainfall pattern has shifted.”

Who pays for the electrification?

A decade ago, most experts would have predicted that foreign aid, rather than venture capital, would play a central role in bringing power to sub-Saharan Africa. Off-Grid Electric has been funded by sources including Tesla and Paul Allen’s venture fund, Vulcan. Allen, one of the world’s richest men, is worth twenty billion dollars, or roughly half of the G.D.P. of Tanzania, a country of almost fifty-four million people. Should he be able to make yet more money off the electrification of African huts? There’s more than a whiff of colonialism about the rush of Westerners and Western money into Africa. As Attah, the young Ghanaian who helped found Farmerline, put it, “There are a lot of Ivy Leaguers coming to Africa to say, ‘I can solve this problem, snap, snap, snap.’ They’re doing good work, but little investment goes to community leaders who are doing the same work on the ground.”

The Westerners I spoke to, though they pledged to hire more local executives, didn’t think that the drive to help was incompatible with the desire to make money. As Poindexter [another CEO] put it, “There is a level of responsibility that I feel, and that I think any appropriate investor needs to have, about extraction versus contribution. I am not willing to be an extractive capitalist here, but I think that capitalism has an extremely important role to play in these communities.” Helgesen—who, despite his occasional oblivious tech-dudishness, spends most of his time in very remote places trying to provide power—is unapologetic about his company’s funding sources. Billionaires, he says, have the capital to make companies grow fast enough to matter. “Paul Allen didn’t invest because he thought it was the easiest way to make more money,” Helgesen said. “I got an awful lot of ‘no’s along the way from people who wanted easier money.” …

A shocking rejection of electrifying Africa

… In any event, it’s not clear that other sources of funding are available, at least from the U.S.: Trump, pulling out of the Paris climate accord earlier this month, said that the country would not meet its pledge to help poor nations develop renewable energy, dismissing the plan as “yet another scheme to redistribute wealth out of the United States through the so-called Green Climate Fund—nice name.”

President Trump has derided renewable energy as “really just an expensive way of making the tree huggers feel good about themselves.” But many Western entrepreneurs see solar power in Africa as a chance to reach a large market and make a substantial profit. …

Aiding developing nations to acquire electrical power through solar energy has measurable returns - social, political, economic - on investment. Western entrepreneurs understand it better than does the supposedly master of grand business deals. The very economic system that enabled Trump to become so wealthy is operating to the benefit of the African consumer and to the profit of the solar start-ups.

Wired.com observes EVEN WITHOUT PARIS, BUSINESS WILL LEAVE TRUMP BEHIND ON CLIMATE CHANGE.

"The irony of all the president’s posturing is that on the economics of this issue, the train has already left the station,” says Brian Deese, a former senior advisor to President Obama and current senior fellow at Harvard’s Kennedy School.

With respect to electrifying Africa by renewables, that train has left the station too. Most of the world gets it. Donald Trump does not.

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