C&B Notes

Power to the People

Economic growth and technological innovation are improving the quality of life for the poor in emerging markets:

On a January evening, Anand is shelling betel nuts by the light of an electric lamp in Halliberu, his village in India’s Karnataka state.  As his friends gather on the lamp-lit porch to swap stories, children play in the yard, Bloomberg Markets reports in its May issue.  Inside, after decades of cooking in the dark, Anand’s mother prepares the evening meal while a visiting neighbor weaves garlands of flowers.  In October, Bangalore-based Simpa Networks Inc. installed a solar panel on Anand’s whitewashed adobe house along with a small metal box in his living room to monitor electricity usage.

The 25-year-old rice farmer, who goes by one name, purchases energy credits to unlock the system via his mobile phone on a pay-as-you-go model.  When his balance runs low, Anand pays 50 rupees ($1) — money he would have otherwise spent on kerosene.  Then he receives a text message with a code to punch into the box, giving him about another week of electric light.  When he pays off the full cost of the system in about three years, it will be unlocked and he will get free power.  Before the solar panel arrived, Anand lit his home with kerosene lamps that streaked the walls with smoke and barely penetrated the darkness of the village, which lacks electrification.  Twice a week, he trudged 45 minutes to a nearby town just to charge his phone.

It is not just the new availability of power in places that have always been off of the grid, but also the huge decrease in effective cost for more convenient power:

In many underdeveloped regions, it hasn’t made economic sense for utilities to build the capital-intensive infrastructure required to deliver energy from traditional sources.  In parts of Africa, the poor, lacking electricity, buy power in the form of batteries, kerosene and candles; in effect, they’re paying as much as $4 per kilowatt-hour, according to Vijay Modi, a Columbia University professor who heads the SharedSolar project.  That’s about 66 times what a resident of Manhattan is charged for electricity.

Simpa co-founder Paul Needham says filling the power gap will entail a transformation similar to the one in which mobile phones bypassed traditional landlines to deliver telecommunications services to vast populations in India and Africa.  “What we’re seeing is the beginning of the second great leapfrog story,” says Needham, who estimates that 1.6 billion people in the world don’t have access to electricity.  In Europe, competition from the growing renewables sector is forcing traditional utilities to become greener.

On a related note, Richard experienced first-hand how the residents of Phnom Krom, one of the poorest places in Cambodia, are sourcing power for their black-and-white televisions.