Electricity beyond the Grid : Accelerating future momentum — Part 1
We see the growth of standalone home systems as just the first step in a potential transformation of energy access. Mobile technology, availability of microloans and falling solar module prices are already proving to be disruptive drivers of change.
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In the near- to medium-term future, we believe there is the prospect of further technological developments in small-scale power generation and large battery storage that could prove to be game changers.
The old assumption that electricity is something that has to wait for grid infrastructure development will be turned on its head by new commercial business models. Indeed, in countries with mobile payment systems, we are already seeing households being able to make their own electricity choices directly with technology providers.
Bottom-up customer demand is proving as important as, and in some cases more important than, the traditional top-down planning of national grid extensions.
Data analytics is another game changer that is playing an increasingly significant role. PAYG companies are using real-time data feeds from installations to analyse usage and payment patterns. This data is also allowing them to anticipate repair and maintenance requirements.
Using data analytics could further help in identifying the best sites for standalone solutions, mini-grids and national grid extension. We expect that existing standalone business models and mini-grid business models will transform into more connected smart off-grid energy systems with a substantial larger market size compared to those today.
New business models driven by the development of mobile payment, data analytics and large battery systems will emerge and drive the transformation.
Standalone home systems and mini-grids have the potential to fill the gaps in grid infrastructure smarter and faster. For those who are beyond the reach of the grid, these off-grid systems need to be recognised as the primary means of access to electricity. Yet many national energy policies do not give them this recognition, let alone go on to provide the appropriate policy, financing and regulatory frameworks that would enable them to develop and flourish.
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Besides the use of standlone systems and mini-grids for customers who are not connected to the grid, we also see off-grid solutions becoming a financially viable option for grid-connected customers, especially where electricity supply is not reliable or not sufficient, or where electricity tariffs are high. We expect a broad transformation in the electricity sector in the coming years, both for grid-connected and ‘beyond the grid’ customers. This will have a major impact on the future sustainability of incumbent generation, transmission and distribution utilities and these companies will need to adapt their business models accordingly (see figure 2).
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You can contact me by sending an email to vish.ashiagbor@gh.pwc.com and copy in Brigid Yirenkyi (brigid.a.yirenkyi@gh.pwc.com)
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