What does Tesla mean for energy in Africa?
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Version 0 of 1. With only 30% of people in Africa having access to electricity, it’s little wonder Tesla’s Powerwall home-storage batteries are being touted as the next big revolution for African energy. In countries like Nigeria diesel-powered generators are the default back-up for chronic, daily national power cuts. Tesla’s Powerwall battery works as a back-up that is not reliant on fossil fuels. It stores renewable energy like solar and wind and can last more than 24 hours. All this at no cost other than the upfront cost of the Powerwall itself. Related: Life without light in rural India: why solar lanterns can't compete with the grid For Africa’s energy consumers and low-income groups, affordability is the main hurdle for the Powerwall’s adoption. Tesla’s 7-kilowatt-hours (kWh) capacity battery costs $3,000 upfront, excluding installation. Average per-capita incomes across sub-Saharan Africa mostly fall below $3,000, and it costs Africans much more to access energy than in many parts of the developing world. The continent remains hugely dependent on expensive fossil fuel sources for primary energy consumption, while renewable energy still accounts for only 20% of installed generation capacity, despite recent progress. Other new energy solutions have proved cost-effective, for instance, mobile pay-as-you-go solar power services. Under the model, pioneered by companies like Azuri Technologies, users pay a one-off installation fee of around $10 for a solar panel that can power two LED lights. The pack also includes a phone-charging device. The total weekly cost is about $1.50, which is at least 50% lower than fossil fuel alternatives such as kerosene. Users also get up to eight hours a day of energy. It would take 18 months to pay for the Azuri unit, bringing the total cost to around $108. Compare this to the $3,000 price tag of the Powerwall pack. The impact on everyday life, from tasks such as cooking, to study lighting for school children could be monumental But Tesla’s storage solution could help accelerate Africa’s permanent transition from fossil fuels to renewable energy, thus aiding the continent’s fight against environmentally destructive greenhouse gas emissions. At least 40% of the African communities that use solar energy still rely on fossil fuel energy sources as a backup. Existing small-scale solar battery devices can’t compete with Tesla’s Powerwall battery, which can supply 1,000 watts for at least 10 hours and possibly more. The impact on everyday life, from tasks such as cooking to study-lighting for school children in urban, semi-urban and rural Africa, could be monumental. Already, Africa’s off-grid communities that have moved from wood-burning to solar power lanterns have enjoyed health and economic benefits. The average urban African household only needs six hours of energy a day to run productively – rural households require much less. Since the Powerwall can offer more than 24 hours of uninterrupted power supply there may be ways to deliver the Tesla solution in a corporate pool to rural communities, rather than to individual households, for whom costs would be prohibitive. Shared utilities such as water, light, and heat still form part of the cultural fabric of many African communities. In order to do this, however, the policy environment for renewable energy – particularly solar and wind – needs to be favourable. Even if Tesla plans to introduce a grant element or cheaper version of the Powerwall battery pack to off-grid African markets, a communal platform for Tesla batteries in Africa may still require a government subsidy scheme. But subsidies could undermine the move towards cleaner energy sources on the continent, and place a huge economic burden on countries. Global experts are awed by the low costs of Tesla’s Powerwall batteries, since competing technologies cost twice as much. The introduction of the technology has clearly reinforced the merits of energy storage systems and could create momentum for the development of cheaper sustainable energy solutions for Africa’s low-income off-grid communities. Tesla is already designing a battery pack for large utility companies in the US, suggesting the possibility of tailored options for specific markets. Related: On several frequencies, light guides the way to development Africa is grappling with the challenge of transitioning to clean energy systems such as solar. That transition would be smoother if countries’ grid-reliant communities – and not just off-grid ones – formed a core constituency for solar technology. While Africa’s rural poor are often viewed as the main protagonists in the energy access and energy-poverty discourse, the continent’s middle, and largely urban class, are probably the most crucial link in cementing the shift to green energy. It will be primarily this middle-class demographic than can afford the type of solar technology that will force this shift. In the short-term, at least, this demographic could also be the most viable target market in Africa for Tesla’s ground-breaking energy storage. Rolake Akinkugbe is head of energy and natural resources at FBN Capital, Lagos, Nigeria. Follow @rolakeakinkugbe on Twitter. Join our community of development professionals and humanitarians. Follow@GuardianGDP on Twitter. Join the conversation with the hashtag #EnergyAccess. |