ON/OFF : The Micropower Blog.

Poverty is a system design failure

Modern, developed societies are built on a few basic presumptions – access to power, information, and resources.

The development of the industrial age saw an unprecedented growth and development for billions of people, in what is today the developed world.

But there are still billions living in poverty and darkness.

Kerosene Lantern

The poor light source: kerosene lanterns. Features: expensive and lethal.

Why? Because many of the fundamental systems in society – infrastructure, distribution, education, resource usage mechanisms and more – were not designed to include those in faraway locations, those many hundreds of millions living in rural and remote areas in emerging countries.

They were not designed to serve 7 billion people. And they were not designed to be resilient and sustainable.

Our current system design, which has a large degree of centralization, assumes an abundance of natural resources and mostly disregards the environmental impact of fossil fuel usage – widespread, man-made global warming.

Average global temperature over the last ~2,000 years

Average global temperature over the last ~2,000 years. Note the
massive uptick on the far right side. Courtesy Science/AAAS

The good news is that a tidal wave of change is gathering force across the planet: poverty can be eradicated. Climate change can be halted. And it’s a multi-billion dollar opportunity.

The first step is to confront a couple of fundamental flaws in our current system design. Let’s start with power.

With great power comes great responsibility.

We know that there are still well over a billion people on our planet who lack access to energy. Yet, all our efforts to remedy this have so far accounted for very little. Energy access is a basic human right. Without it, providing even the most basic facilities for social upliftment is very difficult.

Access to energy, education and economic resources are powerful weapons against poverty. And if provided in that order, they spur strong socioeconomic development.

Shopkeeper with OMC LED lantern

Open for business even after 6pm. OMC extends the available hours.

Besides being a transformational force, access to electricity – arguably the most basic prerequisite for development – is also a very viable business opportunity for energy entrepreneurs in emerging markets.

That’s why companies like OMC are creating an entirely new industry: Micropower. And 2013 is the most exciting year for Micropower in the history of this new industry.

Because there is now a number of companies dedicated to rural electrification – all specialized in their respective markets, and all required to extend energy access to everyone.

Where telecom and rural energy access meet.

In countries like India, the telecom footprint has vastly outgrown the power footprint. This means that many people who lack basic energy access still have a mobile phone – there are over half a billion people who own a phone but have yet to switch on an electric appliance.

Using a mobile phone in rural India

A mobile phone in the hands of one of OMC’s employees.

Telecom towers – the backbone of mobile networks – need power. Large amounts of it. And the majority of towers in off-grid locations rely on diesel generators – both expensive and polluting.

This means that power and fuel make up 40% or more of the opex (operational expenditure) for a mobile operator in emerging markets.

There are essentially two ways to fix this – either the mobile operator invests in, installs and maintains solar panels, wind turbines, battery banks and other power generation and storage technologies. Or they purchase power from a RESCO (Renewable Energy Services Company) like OMC. The price per kWh (and the cost of scaling up) is much lower in OMC’s RESCO model, because we supply power to both industrial and residential customers.

And in any case, power generation and provisioning is not core business to a mobile operator – they’re entirely focused on providing sufficient mobile coverage, capacity, services and devices.

Diesel generator at BTS site, OMC Micropower Plant in the background

Diesel generator at a rural telecom tower – now replaced with green
power from the OMC Micropower Plant visible in the background.

One of OMC's Micropower Plants

One of OMC’s Micropower Plants in rural Uttar Pradesh, India.

OMC’s Micropower Plants provide green power to telecom towers, while also serving the rural community. But not by building distribution networks: there are no pylons or poles – no wires hanging in the air.

It’s time to cut the cord.

Our current energy generation and distribution networks, with centralized production and long-distance transmission and distribution, were designed for an abundance of energy – for limitless natural resources and a complete disregard for environmental impact.

The challenge is that we’re now starting to realize that energy generation resources are finite, and that we’re causing irreparable damage to our environment if we continue to generate large amounts of electricity by burning even larger quantity of fossil fuels – for example coal. This is where we need to rethink, to seriously question business as usual.

Power grid in India

This is not the future of power infrastructure.

Electricity doesn’t have to equal a socket on the wall. It loses power when it’s transported, so why not generate it where it’s needed and untangle it from the grid?

That’s exactly what we’ve done. Every day, we deliver packaged power to more than 6,000 homes – about 30,000 people – in rural Uttar Pradesh (India’s most populous state). We currently have 11 Micropower Plants in operation, capable of serving 150,000 people and 40 telecom towers.

LED lanterns and PowerBoxes – portable power sockets that power lights, fans and other appliances – are charged at our Micropower Plants in the daytime, when solar radiation is at its peak. We deliver them to our customers’ doorsteps before sunset, and pick them up again for charging after breakfast.

The OMC PowerBox – a portable power socket.

So we provide electricity just like mail and cooking gas are delivered to homes all around the world.

The lack of wires, the effect of untangling electricity from the grid, means one very simple thing: renewable energy becomes affordable.

There’s no expensive down payment, and no long-term commitment – our customers select to get the convenience of electricity on a prepaid daily, weekly or monthly basis.

The growth potential compares well to what happened with telephones in the past 20 years. In 1995, when mobile telephony was launched, India had about 20 million fixed-line phones. Today, the 1 billion mark for mobile subscriptions has been passed and there are just above 30 million landline connections.

So what we’ve done is to invent the mobile phone of electricity. And it is already changing the lives of many thousands of people.

It’s not unreasonable to think that this decentralized approach will find its way to developed markets – that we will eventually buy packaged electricity from the store, just like we buy milk or toothpaste. And that this electricity is being generated locally, from renewable sources.

The future of energy – a new system design with local generation and distribution – is actually being created by entrepreneurs in some of the world’s most impoverished areas.

And there’s room for many more in this industry. In the words of Justin Guay from the Sierra Club;

”It’s amazing to have entrepreneurs getting the job done because we’ve waited for decades for conventional institutions to get the job done, and they’re not. The only way we will get it done is if we see a thousand more OMCs take up this task.”

So you want to learn more?

GSMA’s Bi-annual GPM report is the definitive resource to stay updated on green telecom power, energy innovation and community power from mobile.

Practical Action’s ”Poor people’s energy outlook 2013” gives an excellent overview of current methods and initiatives for achieving universal energy access. It is estimated that an annual investment of $48 billion is required to achieve universal energy access by 2030.

One of McKinsey’s latest features – ”Deconstructing the world’s infrastructure challenge” – discusses the challenges and opportunities ahead on the road towards better global infrastructure. They have calculated that ”Just to keep pace with projected global growth between now and 2030, the world will have to spend $57 trillion on roads, bridges, ports, power plants, water facilities, and other forms of infrastructure.” That spells a very large business opportunity.

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