By Babalwa Bungane, DVP: Communications and Marketing, Genesis Energy
The growing demand for reliable power supply from various energy consumers propels the energy industry leaders to continuously innovate. The innovation is seen in the renewable energy space where the goal is no longer just to provide lighting but to also boost supply that will enable economic development in emerging markets. The promotion of the productive use of energy is among the modern developments that are helping small businesses to prosper.
Several renewable energy technologies have emerged as economically viable and environmentally friendly options to power the growing energy needs of small and medium enterprises (SMEs). The advantage to this adoption is that it allows industrial activities to operate independent off the grid – a great complementor as mostly on-grid power in sub-Saharan African countries is unstable due to aging infrastructure among other factors.
A World Bank’s report titled Electricity Access in Sub-Saharan Africa – Uptake, Reliability, and Complementary Factors for Economic Impact, highlights that “High capacity and reliable electricity are needed for productive uses that generate economic impact. Technological progress may soon allow off-grid electricity systems, particularly those that can be powered by efficient motors, to provide enough electrical capacity for productive uses at a significantly lower cost.”
To a large extent, the emergence of productive use of energy (PUE) or productive use of renewable energy (PURE) does not only benefit SMEs; other beneficiaries include healthcare, education and agriculture sectors.
Productive use of energy keeps the wheels turning
The aforementioned sectors are very vital and are in desperate need of constant and reliable power to keep the wheels turning. The healthcare sector for example; surgical procedures together with the storage of vaccines are fundamentals in the medical field that cannot be postponed or be an afterthought. Therefore, the productive use of energy for this sector preserves lives to say the least. At Genesis Energy (GENESIS), we continue to witness the impact that the productive use of energy can accomplish.
We are proud that one of our investments in a renewable energy company has led the implementation of a solar plus storage solution (15kWp solar + 10kWh storage) for a healthcare facility in Rwanda. In addition to deploying constant and reliable power, the impact of the off-grid power solution meant that (i) the facility realised 20% cost savings on diesel generator bills, (ii) 21.9 metric tonnes of CO2 will be saved annually. Furthermore, two of the United Nations Sustainable Development Goals were fulfilled – (a) SDG7: affordable & clean energy and (b) SDG 3: good health and well-being – the latter through sustainable cooling.
There are several definitions of the productive use of energy (PUE) but one that stands out the most is the one borrowed from The Productive Use of Renewable Energy in Africa report, which defines the term as “…agricultural, commercial and industrial activities, powered by renewable energy sources, which generate income”. This joint report issued by the Alliance for Rural Electrification and the African Union Commission highlights that PURE can be employed at various levels such as by powering machines for pumps, drip irrigation, milk machines, mechanical workshops, refrigeration of food, mobile charging, IT supply for businesses, processing and storage industries etc.
The need for cross-sectoral collaboration
The 5th International Off-grid Renewable Energy Conference (IOREC) that was held by the International Renewable Energy Agency (IRENA) in December 2021 pointed to the missed opportunity for a dialogue between the food and energy industries. A speaker from the Food and Agriculture Organization of the United Nations (FAO) pointed out that the foundation already exists however, there is an opportunity to maximise the benefits for both industries.
Agro-processing solutions such as solar-powered milling or meat drying, irrigation by making use of solar water pumps all form part of the existing solutions that are being deployed. Naturally the food and agriculture industry have energy demand gaps – seasonal operations of crops as a typical example – which create challenges for surplus energy. Such challenges should be viewed as an opportunity to fully leverage on all the energy needs of the food and agriculture industry that exists by exploring the demand of ongoing operations such as meat, eggs etc.
Impact of PUE on micro enterprises
As earlier highlighted, inadequate power supply can have lasting effects on micro enterprises resulting in production constrains or expose businesses to unclean and expensive sources of energy (diesel generators). The deployment/adoption of PUE on the other hand boosts energy security for the micro enterprises, healthcare, education, food and agriculture industry. As for the economic development; changes are realised in longer operating hours, productivity, generation of income and GDP growth on a macro level. The multiplier effects for off-takers include the creation of new employment as well as ancillary of products and services. The productive use of energy is truly a catalyst for economic development in emerging markets.