Microgrid Developer Serves as Private Utility in Kenya

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What’s a great way to bring power to small communities in developing countries?

Microgrid developer PowerHive thinks the answer is microgrids powered by 100 percent solar energy and energy storage, and the company has taken an important step toward bringing power to remote communities.

With a “concession,” or permit, granted by the Kenya Energy Regulatory Commission, PowerHive East Africa is the first in the country granted the right to generate, distribute and sell energy in East Africa. The California company will bring electricity to regions where it’s not economical to extend the grid.

That means the company may now serve as a private utility, says Daniel Boucher, a spokesman for PowerHive. Its first project is now in development–one microgrid to serve one village — and may be online as early as next year. Ultimately, the company wants to develop hundreds of microgrids in the region.

The company is raising private investment capital and seeking grant funding for its projects.

“We have a profitable model,” says Boucher. “The cost of solar modules and batteries have come down. Our technology platform is automated a lot.” The platform manages payment processing, power supply and optimizing supply versus demand, he says. In addition, the company is taking a long-term view and is investing in technology to reduce operation and maintenance costs, he says.

Powerhive, which is also entering markets in Africa and Asia, is unlikely to try to bring power to communities in the US, says Boucher. That’s because home solar systems will most likely fill that role.

“This particular electricity infrastructure is not suited for the US. There is already grid access. I expect that solar home systems will be more common in the US.” The Kenya systems, on the other hand, include wires and other systems to distribute electricity to a few hundred homes in a village.

A main challenge to developing microgrids in remote communities is finding suitable locations, says Boucher. The company uses satellite imagery to identify locations. Another challenge is convincing investors that Africa is not a risky place to invest.

“We want to change perceptions,” says Boucher. “This is 2015.  Of course there are risks. But we have reduced them with our technology and business model.”

Along with changing perceptions, it’s important to build strong ties with local community leaders, says Boucher.

“Community leaders want power for villages and want credit for it.  Local politics can be an issue,” he adds.

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Powerhive was granted the concession after operating microgrid pilot projects powered by 100 percent renewable energy in four villages in Kisii, Kenya for two years. The pilot projects serve about 1,500 people and have helped create new businesses, improve use of appliances, provide electricity in schools, and displace kerosene and diesel use.

“The government of Kenya recognizes that the fastest and least expensive approach to reach 100 percent electricity access is to allow private investment in distributed generation infrastructure,” says Zachary Ayieko, Powerhive’s East Africa managing director “Other national governments aggressively pursuing rural electrification targets can also benefit greatly by using Powerhive’s energy access solution.”

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  1. […] achieving firsts in microgrid development in Africa. Last year, it won a major concession as the first private company allowed to generate, distribute, and sell electricity to the Kenyan […]