M a r k e t N e w s

Electrified Africa, burgeoning market

Posted on : Wednesday , 3rd April 2019

As power rolls out across continent, ranks of appliance consumers swell rapidly.

With a population of more than a billion and increasing access to power, sub-Saharan Africa could present a massive market for electrical products and services – sectors that are among Hong Kong’s fortes.

In its 2017 World Economic Outlook, the International Energy Agency (IEA) said energy for all in the region is achievable by 2030, provided 95% of the US$52 billion investment per year required worldwide for electricity-for-all goes into sub-Saharan Africa.

The region may be a laggard on access for power, but the situation has changed dramatically recently, and now 71% of the region’s urban residents have power. This increase in power capacity has created a strong and growing demand for electrical appliances.

While many urban households have been able to plug in recently, most rural areas remain in the dark, with a penetration rate of just 22% in the countryside. Wiring rural communities up often proves expensive because of the long distances involved. This absence of rural power roll-out has brought an increase in demand for solar panels and associated control and storage systems, since, watt for watt, solar is now cheaper than any other power source, including coal.

The IEA said affordability analysis showed most of the investment would go into renewables, mainly decentralised, off-grid or mini-grid systems with photovoltaic panels being the most attractive generators. The agency projects that such systems will account for most rural electricity generation in the region by 2030.

The history of South Africa’s recent roll-out of power makes a good case study for the entire region. Electricity access in the country went from just 35% of households in 1990 to 84% in 2011. Since then the rate has edged up to 85% – comprising 90% for urban and 77% for rural areas.

This electrification pattern should interest electrical product and services providers from Hong Kong and Mainland China because household access to power more than doubled in just two decades, creating a massive pool of appliance buyers.

The rural households that remain off grid might be impossible to wire up economically. Their best option in sunny South Africa (and the entire continent for that matter) could be stored solar – and they need solar panels and batteries plus the associated controllers and inverters. This creates strong demand for these products, and the world’s leading producer is the mainland, where many factories are backed by investment from Hong Kong.

Solar resource tracker Solargis reports that most of South Africa receives direct normal solar irradiation of more than five kilowatt hours per square metre per day, with one area near the arid western coast approaching nine kWh per square metre.

Stefan Zelazny, CIO of solar solutions provider Mobisol, told The Beam magazine that the spread of solar, off-grid solutions had created demand for suites of electrification solutions, combining generation with storage and control, as well as for more energy-efficient direct-current (DC) appliances. Unless solar-panel output is fed through an alternating-current (AC) inverter, it is DC.

Many households find it hard to accumulate the funds to afford such solutions, Mr Zelazny pointed out, so PayAsYouGo technology (PAYG) has evolved to let households pay for their power solutions as they use them. The technologies permit the funder to switch off a client who defaults on payment. These PAYG technologies can be tied to mobile payments – an area where African countries, especially Kenya, have been pioneers. He said these systems have in turn drawn the attention of green crowd-funding platforms such as Sweden’s Trine.

The company’s experience provides insight into the country’s electrical products and services markets.

Source : hkmb.hktdc.com
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