What is EAV all about?

What is EAV all about?

For the 600m people in sub-Saharan Africa without access to modern energy sources, under-electrification is not just a nuisance but often quite literally a matter of life and death. However, there have been a number of innovations in recent years that have the potential to be game-changers in Africa, turbo-charging long-term sustainable development through businesses that can deliver triple bottom line outcomes (social, environmental & economic). This is what Energy Access Ventures is about: finding those companies that can exploit secular themes such as increased mobile penetration, the explosion in mobile money and data availability, the internet of things, smart/bi-directional grids, Pay-As-You-Go remote cut-off technology, falling costs for renewable technologies and an improved environment for Power Purchase Agreements in Africa to engender real change on the continent. We see these themes being distilled in to various business models that have what we think are the clear potential to enable such a paradigm shift in the local environment: for example ‘XAAS’ (‘Anything As A Service’), which can transform affordability at the base of the pyramid, or mini-grids which can generate power efficiently and integrate with existing infrastructure. Furthermore, the convergence of previously discrete sectors such as banking, telecoms, media and utilities will likely be a major theme as new companies look to provide fully integrated services to low-income consumers and SMEs, all enabled by the rise in distributed generation, cloud connectivity and analytics and mobile data/mobile money networks.

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Of course achieving all this won’t be an easy task and it’s one that will require many more resources than Energy Access Ventures alone is able to bring to bear. Nevertheless, the success of our plan to substantially increase energy access in sub-Saharan Africa rests as much on our ability to act as an evangelist for the sector and drive increased funds towards the numerous exciting, capital hungry businesses that are developing in our field as on our own investment acumen. (Just looking at the industry statistics $4.3bn was raised across all strategies in Africa according to the AVCA in 2015 compared to $60bn in the US for Venture Capital alone according to PWC, so there is clearly a long way to go, but we like a challenge!).

And let’s not forget the impact aspect of all this. Quite apart from the estimated 1-3% per annum in economic growth that the lack of power in Africa causes, there are very real health and environmental reasons to expand energy access in sub-Saharan Africa.

EAV portfolio companies positively impact health and the environment via displacing:

Kerosene for lighting & heating

Eliminating black carbon from kerosene lamps globally can reduce emissions by 240 million tons CO2e per year1—the same as taking 80 coal power plants offline2

Reducing kerosene use can mitigate the widespread risk of burns, accidents, fires as well as inhalation of dangerous particulate matter (e.g. CO, SO2, NOx)

Traditional biomass for cooking

The use of firewood for cooking has been a prime cause of deforestation and environmental degradation in developing countries, very often resulting in loss of biodiversity and disturbance of local ecosystems

Indoor air pollution due to biomass fuel burned in inefficient stoves causes about 600,000 deaths per year in Africa aloneand 3.3% of the global burden of disease, particularly for women and children4

Diesel Gensets and mini-grids

Eliminating CO2 and black carbon from diesel mini-grids can reduce emissions by 115 million tons of CO2 per year globally

Electricity demand served by diesel gensets in sub-Saharan Africa was c.16 tWh in 20126

Per kWh, small diesel generators create 2x the CO2 emissions of coal power plants7

Diesel exhaust contains more than 40 toxic air contaminants, including many carcinogens, such as benzene, arsenic, and formaldehyde

References:

  1. Source: Power for All, from Lam et al (2012) Household Light Makes Global Heat: High Black Carbon Emissions From Kerosene Wick Lamps. Environ. Sci. Technol., 2012, 46 (24), pp 13531–13538
  2. Source:  Power for All, from Platform for Energy Access Knowledge (PEAK) analysis – calculated using CO2e figures and Koomey et al metric for emissions from an average coal plant; Koomey, J. et al (2010) Defining a standard metric for electricity savings. Environ. Res. Lett. 5, 014017
  3. Source: Economist, 2015, from https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/10229.pdf
  4. Source: http://www.theigc.org/project/the-impact-of-clean-stoves-on-charcoal-consumption-in-urban-africa-evidence-from-a-randomised-controlled-trial-in-tanzania/
  5. Source: Power for All, from PEAK analysis – calculated using data on diesel based mini-grids from IRENA; “Analysis of Diesel-based Mini-grids for Enabling the Implementation of Renewable Energies” (2012)
  6. Source: IEA Africa Energy Outlook 2014
  7. Source: Moss, T. & Gleave, M (2014) How Can Nigeria Cut CO2 Emissions by 63%? Build More Power Plants
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Sebastian Donnelly
Sebastian Donnelly