The global future of power

The future power grid will resemble a mesh of distributed storage, generation, and consumption nodes – rather than its current mono-directional architecture.


Grids themselves will continue to be critical.  Despite some rhetoric from the solar industry advocating for a grid-less future, the grid will continue to be a critical tool for aggregating supply and demand.  In effect, the grid is the largest, cheapest battery available – and will continue to be for the foreseeable future, even if battery storage costs drop dramatically.  To draw an analogy from the tech sector: digital data storage has become extremely cheap, but data centers are still far cheaper than personal hard drives.

In practical terms, the cost of “cutting the cord” to the utility is extremely high.  Even if the cost of storage dropped to half of its current cost, it would cost the average American home over $20,000 for the batteries required to go off-grid.  That cost doesn’t even include the cost of generation.

But in Africa, the argument is made that consumers require far less power, and therefore far less battery storage, so the argument for non-grid autonomy is strong.

This is true, but only if African consumers continue to only use very little energy.  The below graphic compares the consumption of American, European, and Indian homes connected to the grid, compared to the amount of energy supplied by a solar home system (like those sold by M-Kopa, Off-Grid:Electric, BBOXX, Mobisol, Fenix, d.light):


Appliance efficiency gains will help to reduce the amount of power the future global home requires to live a high quality of life.  On the chart above, we have surmised that the future home consumption target could be 4 kWh/day of energy, or 40% of what the average European home currently consumes (or <15% of the average American home).  The cost of storage to enable even 4kWh / day of consumption currently exceeds $3,000.  Even if that value drops in half, it will often be cheaper to just invest in connecting to a grid.

In a sector which has drawn itself contentious battle lines of “old” vs. “new”, “dirty” vs. “renewable”, and “grid” vs. “off-grid”, it serves us well to take a step back and realize that grids are not nefarious vestigial remnants of the old system, rather they are a critical aggregation tool which will enable our transition to a distributed, renewable energy economy.  In fact, grids are so far the only reason that we’ve gained any meaningful traction with renewable technologies at all!

The power sector in Africa

Africa has a large advantage when it comes to building the power system of the future: fewer incumbents and a cleaner slate.  The gap in infrastructure between Africa and the West, paired with the rapid pace of change in the power sector, could set up the continent for another ‘leapfrog’ moment similar to its experience with mobile telecommunications in the ’90s and ’00s.


Micro-grids provide the ideal vehicle for Africa to solve its near term challenges of providing energy access for its people, while also putting in place the building blocks of the future smart grid.  Micro-grids embedded with generation, storage, and smart metering – all critical elements of the future smart grid – can be built in autonomously in communities far from the main grid, but with provisions for main grid-integration if and when it comes.  These same grids can also be built as grid-connected from the beginning, and in doing so solve the large problem of near-grid non-connectivity in Africa (i.e. many African consumers who lack electricity access are only a few hundred meters from the main grid but lack the resources to connect on their own).


Conceived of in this way, micro-grids are able to solve both the immediate- and long-term challenges facing the African power sector:


Realizing this energy future

The micro-grid path towards full, future-proof energy access will be good for all stakeholders: governments, national utilities, consumers, donors, investors, and the environment will all win.


But successful adoption of micro-grids will require overcoming significant challenges, particularly related to regulatory oversight and project financing.

In terms of regulation, the micro-grid sector requires more clear legal frameworks for integration with the main grid, a more consistent system for determining fair tariffs, and lighter regulation related project registration and permitting.

As far as financing, the micro-grid sector is currently being challenged by main-grid subsidies which are only accessible to the public sector and not the private sector.  There are also challenges to resolve related to a highly fragmented funding landscape, and funders who have mandates to only focus on “green” micro-grids, which is a detrimentally narrow approach that challenges micro-grid economics and complicates the drive towards grid integrability.

It is important for donors and investors to understand that the best possible thing for Africa “going green” is a large, robust grid which can absorb MW-scale renewable energy projects without risking grid health and stability.  This is exactly what grid-integrated micro-grids can help provide.

It is also important for donors and investors to understand that the energy access problem is independent from the renewable energy problem.  Both are critical, and certainly interrelated, but thinking that we are solving the long-term problem by mandating that energy access should only be solved directly with renewable solutions is flawed.

At PowerGen, we conceive of the landscape for energy access and renewable energy efforts on a two-dimensional matrix like the one below:


The future is exciting for power in Africa. At this moment, we have an opportunity to put Africa on a path to achieve the future energy system before the rest of the world, and in doing so we can unleash significant growth, mitigate carbon emissions, and reduce energy poverty. We welcome friends and partners as we drive towards this brighter future!