Skipping the Age of Edison
As we grapple with transforming our energy infrastructure in response to a changing climate we must solve two important problems; how to provide energy to “low-income” nations developing at a breakneck pace and how to restructure the energy infrastructure within “high-income” nations. Jim Rogers, an electricity infrastructure visionary and former CEO of Duke Energy, the largest electric power company in the US, is currently examining business models and 21st century trends in electricity use and distribution that may help solve these problems.
Most recently Rogers has written the book, “Lighting the World: Transforming our Energy Future by Bringing Electricity to Everyone,” which explores finding a better way to provide electricity the 1.2 billion people without electricity. What is particularly intriguing about Rogers’ work is that with his past experience, his mind for business, and his now intimate understanding of powering “lower-income” communities, he is identifying and developing solutions that inform business and communities in both rich and poor countries.
He considers 21st century business models for how “low” and “high-income” societies alike can distribute and manage energy at home, in our businesses, and on the grid. Rogers maintains that almost 20% of the world’s population has the possibility of skipping the “Age of Edison” entirely and entering the 21st century of electricity generation. “This reverse engineering,” he contends, “could solve the energy crises of America and Europe, while also making the world a cleaner, smarter place.”
We are shown that the future of electricity generation will include renewable energy and large amounts of distributed generation. The book demonstrates how renewables and storage are an important solution for low-income countries and reveals that “…it is cheaper and more feasible to build solar, perhaps coupled with storage, rather than try to replicate our capital-intensive 20th century power system. It’s less environmentally intrusive, and puts people on what [Rogers] calls the first rung of “solar ladder technology.”
As described in a recent article in Environmental Leader, microgrids are fast becoming “… a harbinger of energy trends as more and more companies and campuses with sensitive operations need a continuous flow of power…” Rogers contends that the microgrid, incorporating solar and storage technology, is an important part of our future.
“What Africa can perhaps teach us,” explains Rogers, “is an acceleration of the microgrid… The US will learn from Africa how to go “Back to the Future.” We will be going “Back to the Future” because when the grid was beginning in the early 1900s what we really had was a lot of little microgrids… and we connected them all together to create the grid we have today.” Similar to the way that African villages are acquiring and implementing off-grid systems, our businesses, neighborhoods, and homes can become a microgrid as well.
The key challenge in Africa is to develop a business plan that can be scaled up for 1.2 billion people to gain access to electricity in the next decade. Rogers’ approach is to promote self-sufficiency and to give communities the ability to participate in the global arena. The book summarizes that the best way to empower communities is to develop a mode of paying for their electricity because Africa is littered with products that have been given “free.” He suggests a business plan for a sort of franchised model so that the power can be locally owned and managed.
Off-Grid Electric, run by an energetic and innovative CEO, Xavier Helgesen, is identified as having one of the best business models Rogers has seen. The company is partially funded by similarly innovative investors like SolarCity. The company sells solar generation packages so that individual homes have their own minigrid system. The payment method is based on Africa’s successful mobile banking model which is how people in Africa pay for their phones and other services. 90% of the people in Africa have cell phones and about half have smart phones.
Digital technology is transforming the way companies are doing business worldwide and also disrupting older 20th century models. Uber and Netflix are examples of companies with disruptive business models to incumbents. Similarly, Solar City’s business model can be disruptive to the utility industry. Businesses like Off-Grid Electric demonstrate how connecting to a centralized grid is not always necessary and the potential for our businesses, homes, and neighborhoods in high-income countries to someday act as their own minigrids.
There is large growth potential in places like Africa and India. Once these models can be scaled up in low-income countries massive investment is positioned to follow. Bloomberg New Energy Finance published a statistic that the market for kerosene for things like lighting and other fossil fuel-powered stopgap technologies worldwide is $27 billion whereas, investment in solar in rural areas for electrification is only $511 million.
In a recent interview I had with Jim Rogers for ElectricityPolicy.com I asked what motivated him to write his book. Rogers explained that it is important to bring electricity to these communities because electricity is a “human right” and the key to lifting people out of poverty.
“Even as a young utility CEO,” Roger explains, “it motivated me to know that every morning I was helping to transform the lives of people by providing electricity to their homes and businesses.” His experiences in Africa reminded him a book on Lyndon Johnson, by Robert Caro, that talked about how the lives of women were transformed by bringing electricity to rural Texas. It gave him a sense of purpose and now still informs his dedication to bringing electricity to people. He explains, however, that, “only after writing his book did he have a deepened sense of the challenge of bringing electricity to low-income countries”
Rogers, before he wrote the book, co-founded a company called “Global BrightLight Foundation” which has distributed 70,000 solar lanterns with cell phone chargers in Africa, Asia, and South America. It started as a charitable foundation and then turned it into a non-government organization with profits reinvested into the organization. The company is part of what Rogers describes as the “ladder of technology.” The first rung is solar powered lights and cell phone chargers and, as buying power increases, the last rung is the ability for a village to implement a full fledged microgrid.
“Our confidence in solar and storage,” Explains Rogers, “will only increase as we deploy in these remote areas of Africa and Asia and demonstrate to the world how it can work and be affordable. An emphasis on efficient appliances in those areas will also drive increasing demands for efficient appliances by US consumers.”
“Lighting the World” is for people in rich and poor countries and for laymen and experts alike. It not just about business models though, it is a book of stories and allegory. It takes you on a journey with the author to far-off villages and gives a glimpse of possibility and human invention. From this important book we learn from Rogers and are shown how we can learn from each other as well.
Leah Y. Parks is co-author of “All-Electric America: A Climate Solution and the Hopeful Future,” a journalist in the electricity industry and associate editor of ElectricityPolicy.com & Electricity Daily.
(The interview with Jim Rogers has not yet been published but is expected sometime in March 2016)
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