NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, May 14, 2019

Today at African Utility Week, a coalition of energy sector leaders released a vision for creating the utility of the future in emerging economies. Integrating the public and private sectors, and centralized and decentralized solutions, the utility of the future will provide affordable, reliable and clean power for all. The coalition also launched the first real-world project to uncover and implement the required business-model innovation, bringing together Uganda’s largest utility Umeme and several leading distributed renewable companies to demonstrate the potential for integrated energy in the East African country and beyond.

As coordinator of the initiative, Power for All published a new report, “Utilities 2.0: Integrated Energy for Optimal Impact”, which examines the opportunities, challenges and best practices of creating the utility of the future in Sub-Saharan Africa and developing economies in Asia. Key recommendations of the report, include:

• mandating national integrated energy planning, to ensure the optimal mix of service levels to unelectrified areas
• establishing policies and regulations that provide the certainty necessary to encourage public-private partnership
• creating a level playing field that gives equitable incentives to grid, mini-grid and household-level solutions

“For too long utilities and private sector decentralized renewable energy companies have worked in silos,” said Power for All’s CEO Kristina Skierka. “We need to find a path toward universal electricity access that brings the solution providers together and leverages their strengths, while recognizing our shared goal of ending energy poverty as quickly, affordably and sustainably as possible.”

Selestino Babungi, Umeme Managing Director and CEO, said: “As the largest electricity distributor in Uganda, Umeme recognizes the challenges of accelerating electricity access through grid extension. We believe in creating innovative solutions that are scalable, affordable and can quickly be deployed to address the urgent need to end energy poverty. The Utilities 2.0 partnership provides us an opportunity to pilot and learn, with a view of future rollout to drive household access from the current 25% to 60% by 2027, as envisaged in the second National Development Plan.”

Besides Umeme, the Utilities 2.0 project in Uganda also involves several private sector companies and other leading organizations, so far including Africa Mini-Grid Developers Association (AMDA), CLASP, CrossBoundary, East African Power, EnerGrow, Equatorial Power, Fenix International, Nithio, NXT Grid, PowerGen Renewable Energy, Rocky Mountain Institute (RMI), Smart Power India (SPI), University of Massachusetts Amherst, and ZOLA Electric. The work is being funded by The Rockefeller Foundation.

“Ending energy poverty is an achievable goal, but it needs much greater collaboration between the public and private sectors,” said Ashvin Dayal, Associate Vice President of The Rockefeller Foundation’s Power Initiative. “Through our experience in advancing the mini-grid sector, we understand that a framework which effectively supports coordination between the grid and off-grid sectors would dramatically accelerate the pace of electrification at a national scale.”

Power for All will provide regular updates on the progress of the Uganda demonstration, and also expects to expand the initiative to other countries with like-minded utilities. If you are interested in joining the Utilities 2.0 consortium, please email info@powerforall.org

Photo courtesy of Sameer Halai.