“You’ve got to be very careful if you don’t know where you are going, because you might not get there.” – Yogi Berra (1925-present)
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” – Sir Winston Churchill (1874-1965)
Supplying Rural Villages with Energy Creates Its Own Issues
One of the most ‘dynamic’ global energy markets is the South African region. Some, including myself, would normally use a different adjective, but I don’t want to offend. Energy issues in developing countries and those with mainly rural areas affect the poor & less fortunate in ways that I never fully appreciated; until my recent trip to the Johannesburg region of South Africa.
Apart from national political issues, the South African energy market is plagued by generation & distribution capacity, reliability, and efficiency awareness challenges. Being honest, it’s not the worst market, but due to the size of the country and being a developed nation these issues quickly compound. And inhibit growth by detracting further investment.
Other issues, such as currency devaluation and labor unrest are certainly stronger contributors to the local economic condition, but it’s the combination of issues that inhibits business growth. The impact on the poor is particularly hard, even during times of prosperity.
Consider the following scenario. When industrial companies move into a rural region, it’s not uncommon for them to support local communities with new or improved infrastructure. Many times these communities are so remote, basic services (such as water, roads, and electricity) didn’t exist previously.
Installing these services sounds like a great idea; however they also bring a number of challenges. For example, who is going to pay to maintain the infrastructure? Installing generators to provide power to a village is very noble, as long as someone is going to pay for fuel, maintenance, repairs, and has the technical knowledge to operate the units. Yes, the industrial company may provide these services initially, but probably not eternally.
Once a small village receives electricity for the first time, they also attract migrants from other less fortunate regions. Population grows, as well as electrical demand, and soon we’re back to having capacity, reliability, and other problems. High unemployment and low rural wages do not enable a tax base to support infrastructure. The company is then required to provide these services in the interest of Social Good.
Keeping the manufacturer in the region is a whole other issue. The state-owned utility in South Africa has moved industrial customers to a Time-of-Day rate schedule and increased the unit cost of energy. Some industrials have experienced increases of over 300% during the last decade. Not a condition that promotes longevity.
While the full extent to challenges and proposed solutions are too numerous and complex for this forum, you can easily see how interrelated and dynamic these issues are. Definitely not as simple as providing lighting and plug power.
“I think there is a world market for maybe five computers.” – famous misquote allegedly from Thomas Watson (1874-1956), Chairman of IBM, 1943
If you’re a follower of this blog (first off, Thank You) you’re aware that I secured a new position about a month ago. In my new role, I’m Vice President of Energy for AngloGold Ashanti and responsible for leading our energy management program. AGA is the third largest gold mining organization globally. (Yes, all posts are my own opinion and do not represent the position of AGA.)
With 21 mines in 10 countries, I anticipate a lot of international travel over the coming years. Of course, I won’t be able to share my business-related activities. But am excited to share general energy efficiency and management findings as I travel globally.
Today I’m headed to South Africa. My first visit to the subcontinent. As you can imagine, I’m very excited. And look forward to sharing what I learn along the way. Stay tuned for more frequent posts.
Do you travel internationally for work? Please share your usual destinations.
“When I am working on a problem I never think about beauty. I only think about how to solve the problem. But when I have finished, if the solution is not beautiful, I know it is wrong.” – Buckminster Fuller (1895-1983)
“Obstacles are those frightful things you see when you take your eyes off your goal.” – Henry Ford (1863-1947)