By: Lelo Mdhladhla

When one thinks of the current state of the energy industry, the immortal words of iconic author and thespian Charles Dickens come to mind: “It was the best of times, it was the worst of times.” It really is a tale of two cities.

Globally, technological advances, competitive procurement and a growing knowledge base of companies developing power projects accelerated the drop in the price of power generated from renewable sources – including wind, solar, water and biomass – by as much as 73% between 2010 and 2017, according to the International Renewable Energy Agency. In fact, it is predicted that, by 2020, all renewable technologies will be able to compete with fossil fuels purely on price.

However, in South Africa, a misalignment between stakeholders on the energy mix in the latest iteration of the Integrated Resource Plan, delays in concluding contracts under the Renewable Energy Independent Power Producer Procurement Programme and instability at State-owned power utility Eskom have created the ‘perfect storm’.

Yet, in this ‘perfect storm’ lies a ‘silver lining’. In 2017, the Department of Energy (DoE) gazetted legislation allowing independent power producers (IPPs) to construct and operate projects without a generation licence, on condition that the generation capacity of the project must be equal to or less than 1 MW and that all admini- strative requirements be met, as stipulated by the National Electricity Regulator of South Africa. Therein lies the opportunity. IPPs are now able to develop small-scale power projects at ‘grassroots’ level that can benefit small towns – and not just the large metropolitan cities – and provide electricity at a decentralised level, especially in rural areas, where infrastructure challenges can impede the effective reticulation of electricity.

Companies that own such small-scale projects are called distributed energy service companies (Descos) and are fast becoming part of the new wave of power generation. There are numerous examples of Descos on our continent. A new, pioneering platform called BEAM was recently launched in sub-Saharan Africa and Asia. The platform, the first of its kind, is set to revolutionise access to energy for millions in regions where access is unreliable. The platform is a result of a partnership between Bamboo Capital Partners, a private-equity firm, and BBOXX, a British next- generation utility.

The two companies are set to deploy, through BEAM, $50- million in equity for IPPs that generate power in a decentralised ecosystem, as opposed to the traditional utility-style system whereby large volumes of power are generated from a central source.

BEAM will initially provide off-grid energy for consumers in parts of Africa and Asia. This will enable BEAM to scale up and generate greater impact in its markets. In addition to the equity capital, the investment platform will organise further capital through debt, joint ventures and co-investments. BEAM looks to play a key role in developing off-grid energy infrastructure in the developing world, delivering energy services aimed at facilitating widespread access to electricity.

Another example of a Desco is M-KOPA, a Kenyan entity that has partnered with Master- card to create a payment channel for M-KOPA customers to pay for electricity electronically as they use it, by means of mobile network technology. With pay-as-you-go financing, M-KOPA customers acquire a solar home system on credit and make small daily payments using mobile money for less than what they previously spent on hazardous kerosene lamps.

In October 2017, M-KOPA Solar raised $80-million in committed financing to be used over the next three years to finance installations in one- million homes; this will be additional to the 500 000 homes already connected.

By embracing the exponential change in the energy sector, we can all be part of efforts to ensure that the 1.1-billion people globally who do not have access to electricity are connected. The ‘best of times’ are truly upon us.

Mdhladhla is chief marketing officer of POWERX, the sole licensed trader of renewable energy in South Africa - lelo@powerx.energy