Award-winning renewable energy company PowerGen is providing distributed energy services to yet another remote community through a 1.5kW solar mini-grid. The project is funded by a grant from the Kenya Climate Innovation Centre with GVEP playing an advisory role. Over the last two years the company has set up 24 community-scale micro-grid systems and has developed a pipeline of over 25 community projects throughout East Africa.
The demand for micro-grids is growing across the developing world. The International Energy Agency holds that for universal electrification to be achieved, 55% of all new power between now and 2030 must come from decentralised energy sources, 90% of it being renewable.
Kenya’s electrification rate stands at 20%, and 35 million people do not have access to electricity. Only 7% of the people in rural areas are connected to the national grid and 93% of them rely on kerosene for lighting.
The establishment of micro-grids for rural electrification makes business sense, as it is a rapidly deployable private infrastructure. In Kenya specifically, a new Bill is being introduced, which if passed into law, will enable private companies to provide electricity distribution and to offer consumers choice and better quality of services.
The number of Kenyan energy companies seeking ways to provide energy services has significantly risen. One player that has strategically positioned itself in the market is PowerGen Renewable Energy. Founded by three entrepreneurs in Nairobi in 2011, the company began operations as WindGen Power East Africa manufacturing small wind turbines. It then turned to solar technologies when prices dropped, and rebranded to PowerGen in 2013.
PowerGen has so far installed 24 solar micro-grids with a total capacity of over 70 kW – 22 in Kenya and 2 in Tanzania. Their goal is to accelerate rural electrification by providing off-grid communities with lasting energy infrastructures, using a pay-as-you-go model.
The company installs solar generation systems in the heart of communities and extends the grid to surrounding homes and businesses. Each customer pays a nominal connection fee and receives a board for their house that includes a breaker, a light bulb and an outlet.
In October 2013, PowerGen was selected for support by the Kenya Climate Innovation Center (KCIC), a partnership providing incubation, capacity building and financing services to Kenyan entrepreneurs that are developing innovative solutions in the energy, water and agribusiness sector, to address climate change challenges.
Besides receiving financial support, the company was assisted in identifying potential micro-grid sites across the country. GVEP, one of the KCIC’s partners, has been providing them with financial advice and micro-grid development support.
In July 2014, PowerGen identified Kiwa Island, a small island about 500 metres off the shore of Lake Victoria in Homa Bay County, Kenya, as a viable site for a micro-grid. Kiwa Island is not connected to the national grid, even though the nearby town of Ndhiwa has power. Logistical challenges of getting the national grid to the island means Kiwa is not likely to get power in the near future, just like most far flung areas in Kenya.
Having power for the first time has transformed the lives of the local inhabitants. Among them is 26-year-old George Otieno, who runs an entertainment business. Since establishing his business in 2014, he has been forced to close early, in spite of the swelling clientele, due to unreliable power supply. His fortune changed when he got connected to PowerGen’s micro-grid.
Otieno, who volunteered to have the 1.5kW microgrid installed on his land, is very happy with the new infrastructure, as it helped his business take off.
PowerGen micro-grids are reliable because, contrary to the national grid, they aren’t subject to as many system failures and users don’t have to put up with regular power blackouts. The community enjoys access to electricity and the children can now study at night without straining their eyes or inhaling toxic smoke from the kerosene lamps. Most households have also purchased appliances such as television sets and refrigerators.
The demand for power in the island is growing and PowerGen is monitoring the usage to determine how many more people can be connected to the existing micro-grid.
Today, more than 700 households and businesses, translating to over 5,000 people, are benefitting from PowerGen micro-grids in Kenya.