Electricity Crisis | Exploring alternative power generation solutions for Africa: Sumaya Mahomed

Summary

The African continent faces significant electricity generation challenges, with South Africa's power utility Eskom struggling to maintain consistent power supply. Uganda, however, is exploring an integrated approach to energy access, involving collaboration between the main grid and solar off-grid companies. This pilot project aims to fast-track energy to unserved communities, showing promising results. The country is leveraging partnerships to reduce costs and increase access, with funding primarily from public sources. The model emphasizes the importance of policy reform and a conducive environment for utilities and renewable energy companies to work together, potentially creating jobs and upskilling workers, as discussed by Maya Muhammad, the Country Manager for Power for All in Uganda.

Takeaways

• 🔌 South Africa's power utility Eskom is struggling with rolling blackouts, highlighting the need for alternative solutions.
• 🌍 The discussion shifts focus to Uganda's approach to electricity generation as a potential model for other struggling economies.
• 📈 Uganda is in the next phase of a pilot project that integrates power utilities with solar off-grid companies to enhance energy access.
• 🤝 The collaboration between power utilities and decentralized renewable energy partners in Uganda is seen as efficient and beneficial.
• 💡 The integrated energy approach leverages comparative advantages to deliver faster and cheaper energy access, combining the strengths of both utilities and renewable energy companies.
• 💼 The Ugandan model suggests that partnerships can lead to reduced costs and increased customer satisfaction through a customer-centric approach.
• 🏦 Energy access in Uganda is primarily funded through public funds, but the integrated approach aims to reduce upfront capital costs.
• 📊 Uganda's main grid, Umeme, collaborates with decentralized partners to benefit both customers and the utility, as evidenced by available data.
• 💼 The utility's profitability, as seen with Umeme, can contribute to cheaper access to capital for energy projects.
• 🛠️ There is an opportunity for job creation and upskilling within the energy sector, especially through partnerships with decentralized renewable energy companies.
• 🌐 The success of the integrated approach in Uganda suggests the need for policy reform and a conducive environment for utilities and renewables to work together effectively.

Q & A

What is the current situation with electricity generation in Africa, particularly in South Africa?

South Africa's power utility, Eskom, is struggling to maintain consistent electricity supply, resulting in rolling blackouts that are expected to continue for some time.

What is the trending topic related to the power situation in South Africa?

Stage eight load shedding is trending, indicating a severe power crisis in the country.

What is Uganda's approach to addressing its power supply challenges?

Uganda is implementing an integrated approach, involving a pilot project that encourages collaboration between power utilities and solar off-grid companies to fast-track energy access to unserved communities.

What is the name of Uganda's main power grid utility?

The utility is called Umeme.

How does the integrated energy approach benefit both customers and the power utility in Uganda?

The integrated approach leverages the comparative advantages of both centralized and decentralized energy solutions, leading to faster and cheaper access to energy, reduced costs, and increased customer satisfaction.

What is the role of decentralized renewable energy partners in this integrated approach?

Decentralized renewable energy partners, such as mini-grid developers and productive use partners, contribute by being technology and data-driven with a customer-centric approach, which helps in reducing costs and enhancing energy access.

How is energy access in Uganda primarily funded?

Energy access in Uganda is primarily funded through public funds, with an emphasis on reducing upfront capital costs and increasing customer ability to use power productively.

What is the significance of the balance sheet of Umeme in the context of energy access funding?

Umeme's profitability allows for cheap access to capital, which is critical in reducing the upfront capital costs required for energy access projects.

What are the policy implications for countries like South Africa looking to adopt a similar integrated approach?

Policy reform is necessary to allow seamless collaboration between utilities and decentralized renewables, and to fast-track the end of energy poverty.

How does the integrated approach impact job creation in the energy sector?

The approach creates opportunities for upskilling and employment across the entire value chain, from utility staff learning new technologies to small businesses benefiting from increased energy access.

What key learnings can South Africa take from Uganda's approach to energy access and poverty alleviation?

South Africa can learn the importance of openness to test new approaches, support from policy stakeholders, and the willingness to collaborate with decentralized renewable energy companies.

Outlines

00:00

🌍 Addressing Africa's Electricity Challenges

The first paragraph discusses the electricity generation issue in Africa, with a focus on South Africa's power utility Eskom facing challenges that lead to rolling blackouts. The conversation shifts to Uganda's successful integrated approach to power supply challenges, suggesting a potential solution for other economies. The pilot project in Uganda has shown promising results in how power utilities and solar off-grid companies can collaborate to provide energy access to unserved communities. The main grid's collaboration in Uganda, called Umeme, is highlighted as beneficial for both customers and the power utility, with data supporting this claim. The segment ends with an introduction to Muhammad, the Country Manager for Power for All in Uganda, who discusses the need for an integrated energy approach to electrification, emphasizing the advantages of collaboration between utilities and decentralized renewable energy partners.

05:03

💼 Financing and Job Creation in Uganda's Energy Sector

The second paragraph delves into the financing of energy access projects in Uganda, which are primarily funded through public funds. It also touches on the profitability of Umeme, one of the two profitable utilities on the continent, and how this profitability aids in accessing capital at a lower cost. The discussion highlights the importance of reducing upfront capital costs and increasing customers' ability to use power productively. The paragraph also addresses the need for policy reform to allow seamless collaboration between utilities and decentralized renewables to end energy poverty. The potential for job creation in the energy sector is explored, emphasizing the opportunity to upskill people and create jobs across the value chain, from utility staff to small businesses in communities. The importance of partnership and support between utilities and decentralized renewable energy companies for skills development and job creation is underscored.

10:05

🤝 Embracing Integrated Energy Solutions for a Just Transition

The final paragraph wraps up the discussion by emphasizing the need for learning and openness to test new approaches in the energy sector. It calls for support from policy stakeholders to facilitate innovation and collaboration between utilities and decentralized renewable energy companies. The conversation also touches on the challenges faced by South Africa in its integrated approach to energy solutions, including the just energy transition and concerns about job losses with the shift to renewables. The key takeaway is the importance of political will and a collaborative mindset to make significant strides in energy access and job creation, with a focus on the potential lessons South Africa can learn from Uganda's successful integrated energy approach.

Keywords

💡Electricity Generation

Electricity generation refers to the process of creating electrical energy from various sources such as fossil fuels, nuclear power, or renewable resources. In the video, the focus is on the challenges and solutions related to electricity generation in Africa, particularly in South Africa and Uganda, where different approaches are being explored to meet the demand for power.

💡Eskom

Eskom is South Africa's primary power utility company, which is currently facing challenges in maintaining a stable electricity supply, leading to rolling blackouts. The script discusses the struggles of Eskom as a backdrop to exploring alternative energy solutions and the potential lessons that can be learned from other countries like Uganda.

💡Rolling Blackouts

Rolling blackouts are temporary, scheduled power outages used to manage electricity supply when demand exceeds generation capacity. The script mentions that South Africa is expected to continue experiencing rolling blackouts due to the challenges faced by Eskom, highlighting the urgency for improved electricity generation strategies.

💡Uganda

Uganda is an East African country that is highlighted in the script for its seemingly successful integrated approach to power supply challenges. The country is currently in the next phase of a pilot project that aims to fast-track energy access to unserved communities, serving as a potential model for other struggling economies.

💡Pilot Project

A pilot project is a trial initiative that tests the feasibility and effectiveness of a new approach or solution before full-scale implementation. The script discusses Uganda's pilot project that involves collaboration between power utilities and solar off-grid companies to improve energy access, providing valuable insights and evidence for potential replication.

💡Power Utilities

Power utilities are companies or organizations that provide electricity to consumers from the generation site to the customer. The script emphasizes the importance of power utilities working in collaboration with solar off-grid companies in Uganda to enhance energy access, showcasing the benefits of such partnerships.

💡Solar Off-Grid

Solar off-grid refers to electricity systems that are not connected to a central grid and instead rely on local solar power generation. The script highlights how solar off-grid companies in Uganda are partnering with power utilities to provide energy access to remote and unserved communities, demonstrating an innovative approach to energy poverty.

💡Energy Access

Energy access refers to the availability of reliable and affordable electricity for households and businesses. The script discusses the efforts in Uganda to improve energy access through an integrated approach involving both traditional power utilities and renewable energy partners, aiming to achieve universal energy access.

💡Decentralized Renewable Energy Partners

Decentralized renewable energy partners are entities that focus on providing renewable energy solutions at a local or small-scale level, often through technologies like solar panels. The script mentions the importance of these partners in Uganda's energy strategy, emphasizing their role in delivering faster and cheaper access to electricity.

💡Productive Use

Productive use of energy refers to the utilization of electricity for activities that generate income, create employment, or improve the quality of life. The script discusses how empowering customers with access to electricity in Uganda can lead to productive use, such as increasing small business incomes and creating jobs.

💡Policy Reform

Policy reform involves changes to existing policies to better address current challenges or to promote new objectives. The script calls for policy reform to enable seamless collaboration between power utilities and decentralized renewable energy partners, which is critical for fast-tracking the end of energy poverty and achieving the SDG 7 vision.

💡SDG 7

SDG 7 stands for Sustainable Development Goal 7, which is to 'Ensure access to affordable, reliable, sustainable and modern energy for all.' The script mentions the importance of achieving SDG 7 and the need for integrated approaches and policy support to end energy poverty.

💡Just Energy Transition

A just energy transition refers to the shift towards renewable energy sources in a way that is equitable and socially just, ensuring that the transition does not lead to job losses or social inequality. The script discusses this concept in the context of South Africa, where there is concern about the impact of moving to renewables on jobs and the need for a balanced approach.

💡Skills Development

Skills development refers to the process of acquiring new skills or improving existing ones to enhance employability and adapt to changing job markets. The script mentions the importance of upskilling people within the energy sector in Uganda, particularly in the context of the transition to renewable energy technologies, which can create new job opportunities.

Highlights

Uganda is piloting an integrated approach to power supply challenges, collaborating between power utilities and solar off-grid companies to fast-track energy access to unserved communities.

The collaboration between Umeme (Uganda's main grid) and decentralized renewable energy partners is benefiting both customers and the power utility.

An integrated energy approach brings together the comparative advantages of utilities and decentralized renewable energy to deliver faster and cheaper access.

Partnering with decentralized renewable energy companies enables utilities to adopt a more technology and data-driven, customer-centric approach, reducing costs.

Energy access in Uganda is primarily funded through public funds, but the integrated approach can reduce upfront capital costs.

Decentralized renewable energy companies can support customers better by understanding their needs and helping them unlock the power of energy access.

Accelerating energy access increases the number of connections and empowers customers, leading to increased consumption.

Capital for energy projects can also be accessed through low-cost development finance institutions and the balance sheet of profitable utilities like Umeme.

Policy reform is needed to allow utilities and decentralized renewables to work together seamlessly and fast-track the end of energy poverty.

A willing utility and government are essential to test new approaches and create a conducive environment for energy access innovation.

The integrated approach in Uganda has created job opportunities across the entire value chain, from utility staff to small business owners in communities.

Upskilling people within the project enables them to become more marketable and access more opportunities in the renewable energy sector.

Productive use partners empower small businesses in communities, creating jobs and catalyzing local economic growth.

South Africa needs to embrace the integrated approach, focusing on upskilling and supporting local communities to learn new skills and set up small businesses in renewable energy.

Key learnings for South Africa from Uganda include openness to test new approaches, support from policy stakeholders, and collaboration between utilities and decentralized renewable energy companies.

The willingness to learn and collaborate is crucial for the success of the integrated energy approach in addressing energy poverty.

Transcripts

let's turn our focus to an issue related

to electricity generation on the african

continent and this of course while south

africa's power utility eskim struggles

to keep the lights on with rolling

blackouts expected to continue for a

while you saw in the trending topics

earlier this morning stage eight

trending and this morning we asked um by

just perhaps shifting focus and looking

at another country on the continent um

is uganda's seemingly successful a

successful integrated approach to that

country's power supply challenges a

possible answer for other struggling

economies like south africa now the east

african country is currently in the next

phase of a pilot project which has

provided knowledge and also evidence on

how power utilities and solar off-grid

companies can work together to

fast-track energy access to unserved

communities now there's data available

that shows that umi i think that's how

you say it we'll find out uh which is

uganda's main grid's collaboration is

benefiting both the customer and the

power utility so for more of these

developments

muhammad is the country manager for

power for all in uganda and joins us

live from kampala via zoom samaya thanks

so much for your time and welcome to

morning live

good morning and thank you so much for

having me

so let's just get the names correct um

how do we say the name of the utility

that i just mentioned

you mentioned it very well it is called

umemi

okay perfect so um

so business as usual approach to

electrification by the expansion of

central grids as has been done since uh

you know time immemorial that obviously

will not achieve universal energy excess

as we've seen um for people in remote

and rural areas was still without

electricity so let's talk to that

the need to create a conducive

environment to unlock of course

opportunities and finances uh to

electrify more people so

what what is uganda currently doing that

the rest of us can perhaps learn from

thank you so much first of all i'd just

like to

say that powerful is a global campaign

focused on accelerating the end of

energy poverty and one of the campaigns

is this integrated energy approach and

that brings together this collaboration

between the utility and decentralized

renewable energy partners such as a mini

grid developer and productive use

partners

what's so efficient about this

partnership is that it leverages the

comparative advantages to deliver faster

and cheaper access so it really gives

you the benefits of of best of both

worlds

this will ultimately then result in

cheap access to capital and a large

customer base because that is what the

utility can offer but at the same time

by partnering with these decentralized

renewable energy partners

they are more technology and data driven

and they are very customer-centric

approach

by developing this customer's

consumption it can therefore reduce the

cost

and definitely lead to you know benefits

such as

productive use that is definitely needed

again

these two worlds need to come together

and they need to unlock the comparative

advantages to definitely unlock the

innovation that we're seeing and that is

deemed as an integrated approach

so when it comes to the financing of uh

some of these projects where in the main

does it come from in the ugandan context

right now energy access is primarily

funded through public funds we all know

that and i think the other challenge is

is that the utility is also just limited

through one set of technology which is

great extension

so energy access is always going to

require public funds but what we are

unlocking with this

approach is through working together you

can reduce that upfront capital cost as

i've indicated the utility that is not

really very good at

supporting the customer by getting a

connection and helping that customer

really to unlock the power of having

access

but if they partner with the

decentralized renewable energy companies

that has to really understand the

customer and that has to support the

customer we do see that one we

accelerate access so by accelerating

access you are increasing the number of

connections and if you empower

that customer further you definitely are

also going to increase consumption and

that is another key driver within your

business model now the capital can be

accessed also through you know low cost

um dfi's and we also see that you know

again the utility can use you know the

balance sheet mimi is also one of two

utilities on the continent that is

profitable so again

that cheap access to capital is

ultimately critical in ensuring that

through reducing the upfront capital

cost that is required and increasing you

know that customer's ability to use

power productively is where you know the

secret source is within this approach

so as you've been saying there uh

sumaira you have the utilities and the

decentralized renewables who obviously

need to work together um to end the

energy poverty as they cannot

individually

meet the sdg 7 vision

each on their own so

the need for policy reform that will

allow these two systems to work together

seamlessly and also to fast track the

end of that energy poverty is obviously

pivotal

it is extremely poverty and i also just

want to say you do need a willing

utility because without both the utility

and governments being willing to test

new approaches and to create this

conducive environment

we are not going to see you know the the

needle shift when it comes to you know

seeing those numbers increase with

access on the continent so we require an

open mind and it requires a willingness

to test innovation and support you know

the business environment

so that it can thrive

so just looking at um you know

comparisons if we look at what's

happening in south africa at the moment

uh there is of course a lot of talk a

lot of uh criticism and of course um a

lot of encouragement when it comes to uh

the integrated approach to finding an

energy solution

but also one of the issues we are

grappling with in south africa is what

is called a just energy transition and

also the question of

jobs and whether moving to renewables

for example will result in job losses so

the potential for creating jobs in all

of this let's talk to that in the

ugandan context

thank you so much

there is an opportunity to you know

upskill people within this project we

have seen a significant amount of jobs

across the entire value chain so what do

i mean by that

one

the utility is learning a lot about new

technology and even these staff members

are starting to appreciate and having a

higher higher understanding

of the benefits of

utilizing renewable energy technologies

now once you empower and diversify

someone's capacity and skills they

become a lot more marketable and they

will have access to a lot more

opportunities

we also see through our productive use

partners by empowering those small

businesses in the communities and giving

them the ability to

increase their incomes they are also you

know creating or being a catalyst to

creating jobs that is much needed within

the communities

and as all of the businesses starts to

you know thrive it will continue to you

know create jobs i do think that there

needs to be an understanding that there

will be a phase of

training and skills development that is

required but this can only happen if

there's a partnership and an

understanding

and the support that is enabled

between the utilities and the

decentralized renewable energy companies

i think south africa really needs to

just embrace it there needs to be a lot

more work that needs to be done i think

the ipp program is excellent but what

can the municipalities do what can we

really do within you know our townships

to really empower the people and help

them to you know learn a new skill can

they become installers most definitely

can they set up small businesses so they

can sell you know solar home systems

there's a lot of opportunities within

the sector i'm gonna come back to the

point are we willing to learn and are we

willing to collaborate with one another

and i think that is the key here sumaira

so

just to bottom line it what would you

say are the key

points of learning that we as south

africa can take from what is being done

in uganda

to learn and openness to test new

approaches

and to get that support from the policy

um stakeholders so that you can test new

approaches and being impeded within

policy without that openness

and that political will

it's just not going to shift the needle

well so maya muhammad thanks so much for

speaking to us this morning sumaira is

the country manager for power for all in

uganda and was speaking to us there live

from kampala via zoo