Energy solutions beyond the grid: Weekly Review 10/27 – 10/31

Solving energy poverty is no easy feat, especially when the majority of the people in the world living without electricity live beyond the grid. Innovation is crucial to finding viable solutions to this global issue, but in addition to innovation we must consider solutions that can scale and create a lasting impact.

Get Rid of the Grid? by Pepukaya Bardouille & Dirk Muench on SSIR

According to a 2013 report, companies in the mobile phone sector in sub-Saharan Africa have attracted $44 billion in commercial capital compared to the less than $100 million companies that provide energy services to households in the region have attracted over the same period of six years. The disparity is shocking considering that there are 125 million energy-poor households in the region who spent an estimated $20 billion last year on the kerosene and batteries to meet their basic energy needs.

For years, the international development and impact investing communities have worked to identify ways to provide basic energy services to the millions of off-grid households in emerging markets. But to date no initiative has achieved significant market penetration and managed to scale in a massive way. “It often seems as if there are more conferences and reports about access to energy than there are electrified villages in all of sub-Saharan Africa” comments Bardouille, Senior Operations Officer at the IFC.

SSIR believes that there is a chance to expand energy access as fast as MNOs were able to expand mobile phone access, and the vehicle for doing so is the distributed energy service company model, or DESCO. The DESCO model has the potential to provide off-grid households and small business with a better service than they currently have, for less than they currently pay while generating jobs and entrepreneurial opportunities for local markets and financial returns for investors. Rather than selling products for cash, DESCOS install small-scale distributed electricity networks powered by solar or biomass energy, while local business units collect payments over time from connected customers. In SSIR’s opinion, “a business that can offer a better service for less, while making a profit as well, is a business with potential”.

Why Microgrids are Catching on in Africa by D.A. Barber on AFK Insider

With Africa’s push for rural electrification, microgrids (also referred to as minigrids) are becoming a cost-effective way to extend electrical service, offering localized power generation and distribution. According to the International Energy Agency’s October 13th report, Sub-Saharan Africa has more people living without access to electricity than any other world region, with more than 80% of the 620 million people living in rural areas. Microgrids and nanogrids (individual systems connected to single load point) are attractive in these remote areas where it can be cheaper to produce electricity locally than to build the necessary power lines to extend the grid from large scale centralized production.

This article also includes snippets of analysis from Navigant Research’s recent report, which describes the firm’s analysis of the individual components that allow microgrids to function and the growing market for microgrids. As well as the challenges that remain for rural electrification.

What will it take to get electricity to the world’s poor? By David Roberts on Grist

David Roberts, energy writer for Grist, poses the question: How do we get electricity to the world’s poor without pushing into climate catastrophe?

Unlike industrialized countries with energy infrastructure in place and money invested in existing assets, developing countries have the ability to leapfrog old technologies and leverage low-carbon alternatives to influence the course of global energy and carbon emissions for decades to come. There are many potential models to development, so to frame the discussion, Roberts first draws distinctions between centralized and de-centralized energy and fossil fuels vs. low carbon electricity.

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Roberts breaks down different models of development and the arguments for each in this article while stressing the one thing required for any path to lead to success: innovation.

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Innovation and Financial Inclusion: Weekly Review 10/20 – 10/24

Over the years, with the introduction of innovations like microcredit and mobile money, Financial Inclusion for the world’s poor has made significant strides. To continue this forward movement, players must look at different approaches to the problem and create innovative solutions while continuing to evaluate and support solutions already in place.

The Next Stage of Financial Inclusion by Dean Karlan on SSIR

In a perfect world, we would never have to think about finance. It would enable money to be in the right place for the right situation without effort or issues. This would require four conditions to be in place: enforceability of contracts, no transaction costs, perfect competition, and fully rational consumer behavior. These ideal needs are not met in their entirety anywhere, but the situation is especially challenging in developing countries.

These inefficiencies prevented financial markets from emerging in developing countries until the 1970s when microcredit changed the landscape of finance for the poor. The innovation lowered transaction costs for the lender and removed some of the information asymmetries that were barriers to lending. In its early stages, microcredit required exploration, risk, and subsidy. For that reason, donors and NGOs played a central role in building the movement.

As the business of providing microcredit has reached a stage of relative maturity, for-profit companies and investors are shifting into the space as NGOs are disengaging in order to focus on needs that the for-profit sector isn’t serving yet. This shift presents an opportunity for these NGOs to focus on further expanding access to financial services among the poor. But where do they begin? What will be the next stage of financial inclusion?

This article explores the three important roles that nonprofits can play in the financial inclusion arena that go beyond simply providing subsidies: serving the populations that for-profit institutions have little or no incentive to target, building trust between for-profit institutions and the populations they serve, and promoting innovation. By playing these roles, NGOS can enable financial markets to develop where they currently do not exist, and allow for for-profits to enter the markets that are created.

Financial Inclusion in Emerging Economies: The Debate by Rachel Banning-Lover on The Guardian

In a seminar in Washington DC last week a panel of International Finance experts discussed how to deliver affordable and accessible financial services to the most remote communities. The panel touched upon many key issues including the need to support new models of financial inclusion with better connectivity, prioritizing reaching remote communities, emphasizing access to credit for smallholder farmers, finding ways to scale, dealing with regulations, addressing poor infrastructure as a barrier and educating end-users.

What Human-Centered Design Means for Financial Inclusion by Yanina Seltzer and Claudia McKay on CGAP

Human-centered design (HCD) is a process built on learning directly from customers in their own environments. The process is relatively new to financial inclusion, and is helping financial providers to understand, create, evolve and test possible solutions in new ways. CGAP has experimented with seven such projects in eight countries. As a result, 175 financial product concepts and 30 prototypes were created. The biggest lesson learned from these projects was that integrating mobile money into the lives of the poor is going to be a challenge. Even the most innovative concepts can fail without an ecosystem designed around the needs of the customer. However, using HCD as a method for examining how financial services work for the poor is beginning to lead to many new ideas on how to combine the best of informal financial services with the strengths of mobile money.

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Big Data on the Farm: Weekly Review 10/13 – 10/17

Big Data and Big Agriculture by Adam Lesser on Gigaom

Gigaom, the blog focused on emerging technologies, is tuned into the influence of big data in agriculture.  The research arm has released a new report reviewing a variety of data driven services and their potential value-add for agribusiness.

Key findings include:

  • There will be more incentives to leverage new technology to increase crop yields and manage risk as global population increases, environment volatility grows and petroleum dependent agricultures is increasingly sensitive to fossil fuel pricing,
  • Opportunities for big data applications in agriculture include benchmarking, sensor deployment and analytics
  • Key challenges for companies entering the market include proving the effectiveness of data centric technologies to improve yield as well as building trust with farmers.

 Today’s Farm Requires Access to Wireless Broadband by Jonathan Adelstein on Farm Industry News

There have been many improvements in agriculture over the years. Perhaps one of the biggest and most impactful new developments is that the “Internet of Things” now includes “Farm Things”. Much of today’s agriculture equipment depends on access to wireless networks and this broadband-powered farm equipment along with laptops, and other devices are crucial in efficient farm management.

Wireless services such as John Deere’s JDLink enable farmers to monitor the productivity and maintenance of machines while they’re operating, and allow them to assess their effectiveness after use and improve their productivity. The wireless data transfer technology also enables farmers to access their data from anywhere, making management simple and convenient.

All these benefits, however, rely on the continued improvement and expansion of our wireless networks. This requires building next-generation wireless infrastructure to bridge the wireless gap and meet the high demand for data use.

Cropin – Transforming Agribusiness Sector by Leveraging ICT on ProductNation

Krishna Kumar is the CEO of Invested Development’s portfolio company, Cropin, one of the leading players in the emerging agriculture technology sector. CropIn leverages advances in information technology and applies it to the agriculture in the form of cloud-based farm management solutions. The CropIn team is working on creating a traceable and predictable  food supply chain by building a network of ERP and Business Intelligence solutions that stakeholders can use to monitor and communicate with farmers on the field. Read the full interview in which Krishna shares his journey and perspectives on the agribusiness sector.

 The Big Data Bounty: U.S. Startups Challenge Agribusiness Giants by Karl Plume on The Globe and Mail

As opportunities for Big Data have surfaced in the agribusiness sector, big agriculture companies such as Monsanto and John Deere have spent hundreds of millions of dollars on technologies that use detailed data on soil type, seed variety, and weather to help farmers cut costs and increase yields. As the ag tech space heats up, a number of small tech startups are launching products giving their bigger counterparts a run for their money. These products are powered by many of the same data sources, particularly those that are freely available such as the National Weather Service and Google Maps. They can also access data gathered by farm machines and transferred wirelessly to the cloud.

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