Productive use of electricity or productive end-uses of electricity (PUE) were buzzwords in the energy access sub-sector even ten years ago. While working at TaTEDO I was involved in building “Sustainable Energy and Enterprises Centres” (SEECE) and Multifunctional Platforms (MFPs). SEECE is a 1 or 2 containers housing different enterprises that are powered by solar PV such as phone charging, juice processing, butchery, barber shop, hair salon, tailoring, computer and secretarial services. In 2010 I wrote an article about SEECE as a potential driver for new market for solar PV in Tanzania which was looking at potential increase in the demand for solar panels from PUE applications.
MFP comprise of a diesel/biofuel powered engine that is connected to machines such as maize mill, dehusker and oil extractor as well as a generator for electricity production. Most of the MFP were of 9kW to 25kW capacity and could be connected to an electricity distribution network sufficient to power 100 to 200 households in rural areas.
PUE is even more important today for both energy access and stimulating rural economic development and improving viability of rural electrification projects on-grid and off-grid. As a basic principle though, success of PUE activities depends the presence of demand for the products offered, just like in any other business; investments in PUE should generate profits in order for it to be successful and sustainable.
There has been noticeable improvements over the years which have greatly enhanced PUE in newly electrified areas, among them being
- the price of solar panels is much lower now, the PV Magazine reported that the current prices are in the $0.27-$0.37 per Watt range reduced from about $3.4/Wp in 2007. This reduction in price has lowered the costs of electricity generation using solar PV since the cost of panels usually makes approximately 50% of the total cost of the solar power generation plant.
- Improved technology to monitor energy generation, consumption, billing and collection of payments from end users in energy facilities such as electricity mini-grids
- Increased support to entrepreneurship and business development by organizations such as Energy 4 Impact and TaTEDO facilitated by improvements in road infrastructure, communications, incomes and ease of flow of money from urban to rural areas and vice versa through mobile money.
The major challenges facing the PUE entrepreneurs are high tariff of electricity, especially to those connected to isolated mini-grids, access to suitable appliances/equipment and smaller markets for their products in rural areas. A project supporting production of a new and/or high value products such as packed maize flour and timber should also include facilitating access to distant markets outside the villages in order to make the project successful. On the other end, the mini-grid operators and other players in the market can facilitate to access efficient, affordable and reliable appliances and equipment extending distribution chains of appliances, aftersales and financing services beyond large towns.
More and more energy generation and distribution companies such as mini-grid owners and operators are likely invest in PUE assets themselves to benefit from the potential business opportunities in the target markets. The energy companies intending to do this should have expertise and capital to invest and operate other businesses different from generation and selling of electricity.