Diesel generators and micro-grids are propping up unreliable grids across Africa, and Covid-19 has worsened the problem.
While African economies develop, diesel generators and micro-grids are propping up unreliable grids across some of the world’s most populous nations. Since 2012, ZOLA Electric has aimed to fix these problems. CEO Bill Lenihan told us how this works on a good day, and how everything has changed since the onset of coronavirus.
Matt Farmer (MF): In your words, how does energy distribution in the countries where you operate differ from conventional grid systems?
Bill Lenihan (BL): What you tend to find in emerging markets, from an energy perspective, is very different from what you find in western countries. The 2.2 billion people that we personally see as our addressable market, about half of them have no grid access whatsoever, and about half of them have a grid, but the grid is highly unreliable.
So in the markets where there’s no grid, people are doing whatever they can do. They use diesel generation, they use inverter systems, which are basically lead-acid batteries and an inverter. They might put solar and create a hybrid inverter system on that. Maybe they burn kerosene, but they’ll just kind of get their energy however they can.
In markets where there is a grid, but the grid is unreliable, what you tend to find are people who find a way to back up that grid. Lagos is a good example of that. In Nigeria, the grid works four to eight hours a day, and people back it up with diesel generators, they back it up with inverter systems, things like that.
MF: These countries are rapidly developing in many ways. Is that something you see in the electricity transmission market?
BL: I wouldn’t say these countries are rapidly developing from an energy access perspective. I joined the company seven to nine years ago and those markets that I described were provisioned the way they were. There was always the promise of the grid coming, but the grid never came.
Now, slowly, distributed assets and mini-grids have started to penetrate the market. The penetration of alternative sources is still very, very low. I wouldn’t say these markets are developing in aggregate from a macro perspective, I would say they’re rapidly developing from an energy access perspective. I do think that’s changing.
MF: You have different products for off-grid solar supply and more recently for on-grid supply regulation. How do these fit in with the current systems for providing energy?
BL: Our history up to this point is predominantly an off-grid market. Regions that have no grid access whatsoever tend to be rural and semi-urban markets, in Africa, Latin America, southeast Asia. We’ve got a million customers in Africa now that we provision a kind of rural, off-grid system to. This system [the ZOLA Flex] is a standalone system; it’s a lithium ion battery, a solar panel, it’s a pay-as-you-go system.