Delivering on the Promise of Distributed Renewable Energy Entrepreneurship in Sub-Saharan Africa
- 124 Downloads
Purpose of Review
This review of distributed renewable energy (DRE) entrepreneurship analyzes the market demand and unique market characteristics in sub-Saharan Africa (SSA) that drive technology-enabled DRE entrepreneurial solutions through innovative business models. It further examines how policy and regulatory challenges need to be overcome for scale and impact.
The unmet energy demand in SSA provides significant opportunities for DRE entrepreneurs to complement and/or substitute grid-based systems through renewable energy solutions. The characteristics of DRE solutions such as affordability, modularity, flexibility, and sustainability endow competitive advantages in small-scale price-sensitive market segments especially in rural and remote settings. The viability and scalability of business models in the DRE sectors are highly dependent on a conducive policy and regulatory-enabling environment.
DRE entrepreneurs are disrupting energy markets by combining technologies in renewable energy, energy efficiency, mobile payment, and data management systems to meet energy demand especially in price-sensitive, rural and remote markets.
KeywordsEntrepreneurship Distributed renewable energy Technology Innovation Business model Sub-Saharan Africa
Compliance with Ethical Standards
Conflict of Interest
The authors are working in the World Bank Finance, Competitiveness, and Innovation Global Practice that has a dedicated program supporting clean tech entrepreneurship in emerging markets including in SSA.
Human and Animal Rights and Informed Consent
This article does not contain any studies with human or animal subjects performed by any of the authors.
Papers of particular interest, published recently, have been highlighted as: • Of importance •• Of major importance
- 1.International Energy Agency (IEA). Energy access outlook 2017. Paris: OECD/IEA; 2017.Google Scholar
- 2.UN Global Compact and World Business Council for Sustainable Development (WBCSD). SDG 7: ensure access to affordable, reliable, sustainable and modern energy for All. https://sdgcompass.org/sdgs/sdg-7/.
- 3.REN21. Renewables 2014 Global status report. Paris: REN21 Secretariat; 2014.Google Scholar
- 4.• REN21. Renewables 2017 global status report. Paris: REN21 Secretariat; 2017. This report provides a snapshot of global renewable energy technologies, industry trends, investments and finance, policies and regulations. The report has a dedicated section on development of distributed renewable energy definition, business models and impact. Google Scholar
- 5.International Renewable Energy Agency (IRENA). Accelerating off-grid renewable energy: key findings and recommendations from IOREC 2016. Abu Dhabi: International Renewable Energy Agency; 2017.Google Scholar
- 7.Brent W. Policy, not finance, biggest obstacle to scaling decentralized renewable energy. Energy access summit”, renewable energy world. 2016.Google Scholar
- 8.• Bloomberg New Energy Finance (BNEF). Distributed energy in emerging markets: highlights from BNEF frontier power analysis. Retrieved from BNEF: https://data.bloomberglp.com/bnef/sites/14/2017/11/BNEF-2017-11-21-Distributed-Energy-in-Emerging-Markets-White-Paper1.pdf. This report offers one of the most recent overviews of market opportunities and industry landscape in the distributed energy sectors, highlighting market growth potential for businesses in remote areas and frontier markets.
- 9.World Bank. Growth entrepreneurship in developing countries: a preliminary literature review. Washington, DC: World Bank Group; 2016.Google Scholar
- 10.• Directorate-General for Research and Innovation (European Commission). Study on renewable energy and research and innovation capacity of Sub-Saharan Africa. Publications Office of the European Union 2015. The study provides a thorough assessment of renewable energy technology potential, drivers, and barriers in Sub-Saharan African countries. Google Scholar
- 11.PwC. Electricity beyond the grid: accelerating access to sustainable power for all. 2016. https://www.pwc.com/gx/en/energy-utilities-mining/pdf/electricity-beyond-grid.pdf.
- 12.International Energy Agency (IEA). World energy outlook 2017. Paris: OECD/IEA; 2017.Google Scholar
- 13.InfoDev (World Bank). Innovations for scaling green sectors. Washington, DC: World Bank Group; 2017.Google Scholar
- 14.International Energy Agency (IEA). Africa energy outlook. World energy outlook special report. Paris: IEA; 2014. https://www.iea.org/publications/freepublications/publication/WEO2014_AfricaEnergyOutlook.pdf.
- 15.Kyrö P. Handbook of entrepreneurship and sustainable development research. Cheltenham (UK) and Northampton (USA); 2015.Google Scholar
- 17.Acumen. Energy impact series. Retrieved from medium: https://medium.com/energy-impact-series.
- 19.World Bank World development indicators; demographic and health surveys; multiple indicator cluster surveys; national surveys; 2016.Google Scholar
- 20.Africa Renewable Energy Initiative (AREI). A framework for transforming africa towards a renewable energy powered future with access for all. 2015. Retrieved from http://www.arei.org/#framework.
- 21.• Africa Progress Panel. People, power, planet: seizing africa’s energy and climate opportunities. Africa Progress Report; 2015. The study provides overview of the background of electricity deficiency in Africa, and rationale for renewable energy development in the Africa Continent. Google Scholar
- 22.World Bank. Tracking SDG7: the energy progress report 2018. Washington, DC; 2018. https://trackingsdg7.esmap.org/data/files/download-documents/tracking_sdg7-the_energy_progress_report_full_report.pdf.
- 23.International Energy Agency (IEA). Energy access outlook 2017 From poverty to prosperity. World energy outlook special report. Paris: OECD/IEA; 2017. https://www.iea.org/publications/freepublications/publication/WEO2017SpecialReport_EnergyAccessOutlook.pdf.
- 24.Lambe F, Jürisoo M, Wanjiru H, Senyagwa J. Bringing clean, safe, affordable cooking energy to households across africa: an agenda for action. Prepared by the Stockholm Environment Institute, Stockholm and Nairobi, for the New Climate Economy; 2015. Available at: http://newclimateeconomy.report/misc/working-papers.
- 25.Van der Burg L, Whitley S. (Overseas Development Institute). Fossil fuel subsidy reform in Sub-Saharan Africa: from rhetoric to reality. The New Climate Economy. Working Paper; 2016.Google Scholar
- 26.International Monetary Fund (IMF). Energy subsidy reform: lessons and implications. Executive summary. Washington, D.C: The International Monetary Fund; 2013. Retrieved from http://www.imf.org/external/np/pp/eng/2013/012813.pdf.
- 27.Whitley S. Time to change the game: fossil fuel subsidies and climate. London: Overseas Development Institute; 2015. http://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/8668.pdf.Google Scholar
- 28.Ighobor K. Light at the end of the tunnel: much ado over Africa’s power sector. Africa Renewal; 2014. http://www.un.org/africarenewal/magazine/april-2014/light-end-tunnel.
- 29.Arlet J. Global indicators group, development economics, World Bank. Electricity tariffs, power outages and firm performance: a comparative analysis; 2017. Retrieved from: http://pubdocs.worldbank.org/en/444681490076354657/Electricity-Tariffs-Power-Outages-and-Firm-Performance.pdf.
- 30.Eberhard A, Rosnes O, Shkaratan M, Vennemo H. Africa’s power infrastructure: investment, integration, efficiency. Washington DC: The World Bank; 2011. Retrieved from: https://openknowledge.worldbank.org/bitstream/handle/10986/2290/613090PUB0Afri158344B09780821384558.pdf?sequence=1 CrossRefGoogle Scholar
- 31.Global alliance for clean cookstoves. http://cleancookstoves.org/impact-areas/health/index.html.
- 32.Lamontagne P. Africa’s gigantic growth prospects to benefit entrepreneurs, Investors. Business Report; 2017. Available at: https://www.iol.co.za/business-report/opinion/africas-gigantic-growth-prospects-to-benefit-entrepreneurs-investors-11493909.
- 33.International Renewable Energy Agency (IRENA). Global energy transformation: a roadmap to 2050. Abu Dhabi: International Renewable Energy Agency; 2018.Google Scholar
- 34.Sustainable energy for all. progress toward sustainable energy - global tracking framework 2015 - Summary report. 2015. Accessible at: http://www.worldbank.org/content/dam/Worldbank/Event/Energy%20and%20Extractives/Progress%20Toward%20Sustainable%20Energy%20%20Global%20Tracking%20Framework%202015%20-%20Summary%20Report.pdf.
- 35.International Renewable Energy Agency (IRENA). Off-grid renewable energy systems: status and methodological issues. Abu Dhabi; 2015.Google Scholar
- 36.International Energy Agency (IEA). World energy outlook 2017 Electricity access database. http://www.iea.org/energyaccess/database/.
- 39.Africa development bank. African development report 2012–towards green growth in Africa. 2012. Retrieved from https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/African_Development_Report_.
- 46.McKinsey. Brighter Africa: the growth potential of the Sub-Saharan electricity sector. New York: McKinsey & Company; 2015. http://www.mckinsey.com/insights/energy_resources_materials/powering_africa.
- 47.BNEF. 3Q 2017 Frontier power market outlook. Retrieved from BNEF: https://about.bnef.com/blog/3q-2017-frontier-power-market-outlook/.
- 48.Harrison K, Scott A, Hogarth R. Accelerating access to electricity in Africa with off-grid solar. London: Overseas Development Institute; 2016.Google Scholar
- 49.•• Dalberg advisors and lighting global. Off-grid solar market trends report 2018. International Finance Corporation; 2018. The report captures recent market trends, key players, game changers, and near-term opportunities in the off-grid solar sector. Google Scholar
- 50.Acumen. An evidence review: how affordable is off-grid energy access in Africa? Commissioned by CDC Group; 2017.Google Scholar
- 51.Millennium Resource Strategies Limited. Implementing renewable energy initiatives in Africa. 2015 ICA Annual meeting background paper. Abidjan, Cote d’Ivoire; 2015. Available at: https://www.icafrica.org/fileadmin/documents/2015/Annual_Meeting/ICA_Plenary_-_Background_Paper_-_Background_Pape __FINAL_2_.pdf.
- 52.International Renewable Energy Agency (IRENA). Renewable power generation costs in 2014. Bonn: International Renewable Energy Agency; 2015. Available at: http://www.irena.org/DocumentDownloads/Publications/IRENA_RE_Power_Costs_2014_report.pdf.
- 53.PwC. Africa power & utilities sector survey, A new Africa energy world; 2015. https://www.pwc.com/gx/en/utilities/publications/assets/pwc-africa-power-utilities-survey.pdf.
- 55.International Renewable Energy Agency (IRENA). International off-grid renewable energy conference highlights changing energy access narrative. 2016. Accessible at: https://irenanewsroom.org/2016/10/01/international-off-grid-renewable-energyconference-highlights-changing-energy-access-narrative/.
- 56.Lighting Global and Global Off-Grid Lighting Association (GOGLA). Global off-grid solar market report: semi-annual sales and impact data, January-June 2016. Utrecht, The Netherlands; 2016. https://www.gogla.org/sites/default/files/documenten/final_sales-and-impact-report_h22016_full_public.pdf.
- 57.Lighting Global and Global Off-Grid Lighting Association (GOGLA). Global off-grid solar market report: semi-annual sales and impact data, July-December 2016. Utrecht, The Netherlands; 2017. https://www.gogla.org/sites/default/files/recource_docs/final_sales-andimpact-report_h22016_full_public.pdf.
- 58.GOGLA. Providing energy access through off-grid solar: guidance for governments. 2017. https://www.gogla.org/resources/providing-energy-access-through-off-grid-solar-guidance-for-governments/.
- 59.International Renewable Energy Agency (IRENA). Solar PV in Africa: costs and markets. 2016.Google Scholar
- 62.Deutsche Gesellschaft für Internationale Zusammenerbeit (GIZ). Photovoltaics for productive use applications: a catalogue of DC-appliances. Eschborn, Germany; 2016.Google Scholar
- 63.REN21. Renewables 2018 global status report. Paris, France; 2018.Google Scholar
- 68.Global Off-Grid Lighting Association (GOGLA). Providing energy access through off-grid solar: guidance for governments. Utrecht, The Netherlands; 2017.Google Scholar
- 69.Lighting Africa. Ethiopia: reaching out to rural end-users. https://www.lightingafrica.org/country/ethiopia/.
- 70.Sustainable Energy for All (SEforAll). Scaling up finance for sustainable energy investments: report of the SE4All advisory board’s finance committee. 2015. Retrieved from: https://www.seforall.org/sites/default/files/l/2015/09/SE4All-Advisory-Board-Finance-Committee-Report.pdf.
- 71.Mobisol. Solar Hub, 2017. Retrieved from Mobisol: http://www.plugintheworld.com/mobisol/payg-software/.
- 73.BBOXX. Smart Solar. http://www.bboxx.co.uk/smart-solar/.
- 74.M-Kopa. Battery technology energising off-grid power solutions in East Africa. 2018. http://www.m-kopa.com/battery-technology-energising-off-grid-power-solutions-in-east-africa/.
- 75.Off grid electric. Off grid electric and edf team up in offering a new off-grid solar power solution for rural areas in West Africa. 2016. http://Offgrid-Electric.Com/Blog/.
- 76.SunCulture. SunCulture Annual Letter 2016. https://medium.com/@samiribrahim/sunculture-annual-letter-2016-ccfa78e45f62.
- 77.World Bank. Building competitive green industries: the climate and clean technology opportunity for developing countries. Washington, DC: World Bank Group; 2014.Google Scholar
- 78.International Renewable Energy Agency (IRENA). Renewable energy and jobs - annual review 2016. Abu Dhabi; 2016.Google Scholar
- 79.M-Kopa. M-KOPA Goes ‘Made in Kenya’ with PV panels; 2018. http://www.m-kopa.com/m-kopa-goes-made-in-kenya-with-pv-panels/.
- 80.Desjardins S, Gomes R, Pursnani P, West C. Accelerating access to energy, lessons learned from efforts to build inclusive energy markets in developing countries. Shell Foundation; 2014.Google Scholar
- 81.Rob Katz. Market creation at the base of the pyramid: it isn’t easy. https://nextbillion.net/market-creation-at-the-base-of-the-pyramid-it-isnt-easy/.
- 82.Global Alliance for Clean Cookstoves (GACC). 2016 Progress Report. Clean cooking: key to achieving global development and climate goals. Washington, DC; 2016.Google Scholar
- 83.World Bank. Early-stage financing in green sectors in sub-Saharan Africa (upcoming). Washington, DC; 2018.Google Scholar
- 84.Racine J-L. Why startup accelerators won’t create the global climate technology revolution. 2017. https://nextbillion.net/why-startup-accelerators-wont-create-the-global-climate-technology-revolution/.
- 85.Koh H, Hegde N, Das C. Hardware Pioneers, Harnessing the Impact Potential of Technology Entrepreneurs. FSG; 2016.Google Scholar
- 86.Koh H, Hegde N, Karamchandani A. Beyond the pioneer: getting inclusive industries to scale. Deloitte LLP; 2014.Google Scholar
- 87.Monitor Deloitte. Reaching deep in low-income markets: enterprises achieving impact, sustainability, and scale at the base of the pyramid; 2017.Google Scholar
- 88.Davies A, Simon J. How to grow social innovation: a review and critique of scaling and diffusion for understanding the growth of social innovation. Paper prepared for the 5th International Social Innovation Research Conference, 2-4 September 2013, Oxford.Google Scholar
- 89.•• Energy4Impact, INENSUS and AfDB. Analysis of barriers to growth and the potential role of the African development bank in supporting the sector, green mini-grids market development programme GMG MDP document series: n°1. 2016. This paper provides an insightful overview of status, opportunities and challenges of the mini-grid sector. Google Scholar
- 90.Mwanza K. Total invests in Africa-focused solar startups off grid electric and Powerhive. AFK Insider; 2016. https://moguldom.com/118728/total-invests-africa-focused-solar-startups-off-grid-electric-powerhive/.
- 91.Banerjee SG, Moreno FA, Sinton JE, Primiani T, Seong J. Regulatory indicators for sustainable energy: a global scorecard for policy makers. Washington, DC: World Bank; 2017.Google Scholar