This past February we held an implementation workshop in Kampala, Uganda, with partners for our Utilities 2.0 initiative. Here is a short update on our research.
Despite not traditionally being central to conversations on “the future grid” or the “energy transition”, utilities in sub Saharan Africa arguably have much to gain by embracing the global trends of decentralization and digitization that are revolutionizing energy service provision. Our utilities generally operate in non-competitive environments, challenged by inefficiencies, congested networks, capital constraints and low-consumption customer bases. Integrating decentralized generation technologies, including advances in storage, sensors and metering technology, represent an opportunity to defer generation capital investments, improve the performance of transmission and distribution infrastructure, and develop new pricing, incentive and billing mechanisms, all of which potentially drive down costs for providers and consumers while improving reliability and service quality.
While there is consensus around the benefits of integrated approaches for achieving universal electrification, the question remains: how? What are the real-life commercial relations that would allow different stakeholders to work together towards low-cost access? Successful demonstrations of this integrated approach to last-mile electrification could have a profound effect on the spread of electricity access and its co-benefits of sustainable development for sub Saharan Africa. This is where we come in. In 2019 our Power for All team along with partners launched the Utilities 2.0 campaign, a framework designed to realize the potential of integrated energy in the developing world through a cohesive set of tests to deliver proof of this concept, and first up is Uganda.
At the center of the Utilities 2.0 consortia— including companies like East African Power (EAP), Equatorial Power, EnerGrow, and NxtGrid/ZOLA Electric along with research partners—is Umeme, Uganda’s largest, private, listed and profitable distribution company. Influenced by the current regulatory environment and operational pressures, Umeme is driven to expand connections and stimulate demand. Umeme approached us about testing integrated approaches locally and what an amazing journey it has been to work with such an engaged partner ever since.
The demonstration areas include Kiwumu, Nyenge and Namasumbi villages in Mukono District, a fast growing peri-urban area just a few hours outside of Kampala. We will explore whether a utility working with off-grid companies, can deliver connections to this area that are less expensive yet more reliable than the utility can achieve alone. We will explore the value of grid services, the benefits of modular network expansion, and whether appliance financing can stimulate demand for power. Work in the field is about to begin.
Taking a complex concept based in partnership from idea to implementation is not an easy task, but it has been incredibly rewarding — even the process itself is full of lessons on project design, stakeholder engagement and more. Read our joint press release here and follow along here for more research updates.