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Bonus: Game Changers, Part 3 · Bloomberg Intelligence

• 0:05
  Speaker 1: Hello, and welcome to Game Changers. I'm Matt Goldman. As
• 0:08
  Speaker 1: the Earth is facing an increasingly consequential climate crisis, inquisitive
• 0:13
  Speaker 1: minds all over the globe are hard at work trying
• 0:15
  Speaker 1: to find solutions, and many of them have been able
• 0:18
  Speaker 1: to translate their Eureka moments into action at a greater
• 0:21
  Speaker 1: pace than scope than sometimes gloomy headlines might have us think.
• 0:25
  Speaker 1: In this four part mini series, will meet the visionary
• 0:28
  Speaker 1: minds who attempt to sculpt the future of sustainable energy
• 0:31
  Speaker 1: and global resources. We'll get a peek behind the curtains
• 0:34
  Speaker 1: of their factory floors here of the sometimes surprising origins
• 0:38
  Speaker 1: of their ideas, and be introduced to a potentially greener
• 0:42
  Speaker 1: tomorrow in this episode micro Grids and micro Economies. Currently,
• 0:56
  Speaker 1: I believe the households which have got power in Kenya's
• 1:00
  Speaker 1: approblemly about so there is another we just got no
• 1:06
  Speaker 1: power at all. Their household is indicated largely desa in
• 1:11
  Speaker 1: the rural areas. That's zachary Io, a man who knows
• 1:15
  Speaker 1: about power and electricity. As a former executive at the
• 1:19
  Speaker 1: National Power Company, he helped expand Kenya's electricity access from
• 1:23
  Speaker 1: eighteen percent of the population in two thousand ten to sixty,
• 1:29
  Speaker 1: the highest in mainland East Africa. But born and raised
• 1:33
  Speaker 1: in rural Kenya, he also experienced the country is often
• 1:36
  Speaker 1: inadequate access to electricity early in life. The first time
• 1:40
  Speaker 1: I had power in my in my village was in
• 1:42
  Speaker 1: the year nineteen. Before that, there was no power at all,
• 1:47
  Speaker 1: completely set up the starts of living. Why extremely very
• 1:52
  Speaker 1: very low because the communication was zero. But the country
• 1:57
  Speaker 1: is not alone in its struggles. About six fifty million
• 2:00
  Speaker 1: people in Africa live without access to power and a
• 2:03
  Speaker 1: continent marred by inequality and poverty. This raises an uncomfortable question,
• 2:09
  Speaker 1: how do you bring people out of extreme poverty without
• 2:11
  Speaker 1: wrecking the climate in the process. Conventional wisdom says it
• 2:15
  Speaker 1: will require the burning of enough fossil fuels to counsel
• 2:17
  Speaker 1: out any progress that developed world makes on emissions. But
• 2:21
  Speaker 1: in rural Kenya, a small experiment is underway aiming to
• 2:25
  Speaker 1: see if it's possible to have the economic uplift without
• 2:28
  Speaker 1: the environmental catastrophe. It's spearheaded by power Hive, a privately
• 2:33
  Speaker 1: licensed utility company where Ako is currently the executive chairman.
• 2:43
  Speaker 1: Here let's go my arms crossed, or does it okay okay.
• 2:54
  Speaker 1: Arriving in Africa in two thousand eight, Power Hive CEO
• 2:57
  Speaker 1: and founder Chris Horner found a challenge enginge landscape rife
• 3:01
  Speaker 1: with potential. Things have not really moved very much in
• 3:05
  Speaker 1: the last hundred years, with the exception of course, of
• 3:08
  Speaker 1: mobile phones and mobile money and things like this. So
• 3:11
  Speaker 1: what's happening not only in Kesey and other parts of Kenya,
• 3:15
  Speaker 1: but all over Africa and other parts of the world.
• 3:17
  Speaker 1: This is a huge gap in terms of those that
• 3:19
  Speaker 1: have electricity and those that don't. Here in Kisy, Horner
• 3:23
  Speaker 1: found the perfect circumstances to try out his new solutions.
• 3:27
  Speaker 1: Power Hive Senior business manager Laura Kiplegat explains, well, we
• 3:32
  Speaker 1: went to Kesi because we were looking for a community
• 3:35
  Speaker 1: UM that is on the fringe of the grid like
• 3:36
  Speaker 1: most rural communities in Kenya, but did have the population
• 3:40
  Speaker 1: density to make sense for us as a business. And
• 3:42
  Speaker 1: Kis is a happy medium. You know, they have good son,
• 3:46
  Speaker 1: good people who are willing, you know to sign onto
• 3:49
  Speaker 1: the project um but they it had all the components
• 3:52
  Speaker 1: that we needed, you know, to make our business work
• 3:55
  Speaker 1: that business. Power Hive currently manages around twenty five micro
• 4:00
  Speaker 1: grids in the Kisi region, grids that operate on solar
• 4:03
  Speaker 1: power stored in batteries ideal for the sunny climate. These
• 4:08
  Speaker 1: mini grids are power systems that supply enough electricity for
• 4:11
  Speaker 1: a small community. Schools and homes get electric light and
• 4:14
  Speaker 1: internet service. Agricultural labor like maize milling, doesn't have to
• 4:18
  Speaker 1: be done by hand anymore. Electric pressure cookers eliminate the
• 4:22
  Speaker 1: need to chop down trees or burn charcoal to make meals.
• 4:25
  Speaker 1: All of these things raise the standard of living and
• 4:28
  Speaker 1: relieve the environment. But there's one big problem. Our typical
• 4:33
  Speaker 1: communities are generally subsistence farming. Most of them are not
• 4:39
  Speaker 1: formally employed. Most of them don't have formal education or
• 4:42
  Speaker 1: have not completed anything really beyond primary education UM and
• 4:48
  Speaker 1: are really the bottom of the pyramid in the economy.
• 4:52
  Speaker 1: When we first came into too Kenya and into Keys,
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  Speaker 1: we quickly realized that our consumers are too poor to
• 5:01
  Speaker 1: pay for energy power. Hive solution is as simple as
• 5:05
  Speaker 1: their solar panels. Create a microeconomy to bolster local businesses.
• 5:09
  Speaker 1: So we've introduced electric vehicles. We've introduced electric milling machines
• 5:15
  Speaker 1: to to to provide a better, lower cost solution for milling. Yeah.
• 5:25
  Speaker 1: But the starkest example of this could be found in
• 5:27
  Speaker 1: Poko Poa Power Hives ambitious poultry farming initiative. Most of
• 5:32
  Speaker 1: our communities are subsistence farmers. These are people who are
• 5:35
  Speaker 1: already wearing chicken, but are limited by the capital you
• 5:39
  Speaker 1: know UM issue, and are limited by exposure and understanding
• 5:44
  Speaker 1: of how to to scale a poultry business. So we
• 5:48
  Speaker 1: developed a program to bring commercial poultry farming to our communities,
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  Speaker 1: create an income for for our communities, and then also
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  Speaker 1: create a good energy customer for us as a business.
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  Speaker 1: So we set up CUCA Poa UM in sort of
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  Speaker 1: joint partnership with local corporatives whose members are all power
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  Speaker 1: hive customers UM. We tend to have groups of ten
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  Speaker 1: typically they're all women UM or at least about women
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  Speaker 1: across our twenty brewderhouses. Then the corporative bringing the capital
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  Speaker 1: to build the infrastructure, so they'll build a brooder house,
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  Speaker 1: they'll buy all the equipment necessary UM, which is the
• 6:26
  Speaker 1: heating lamps, the lighting lamps, UM feeder trays, UM and
• 6:30
  Speaker 1: water troughs, and then power Hive brings in the chicks.
• 6:34
  Speaker 1: We provide batinary services and feed, and then we also
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  Speaker 1: help help them secure off takers for the poultry at
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  Speaker 1: the end of the cycle. It's a virtuous cycle. For
• 6:47
  Speaker 1: power Hive, they give their customers the money and guidance
• 6:50
  Speaker 1: to start businesses that use their electricity, and then a
• 6:53
  Speaker 1: portion of the income from those businesses pays for the electricity.
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  Speaker 1: So the poultry business is great because it provides food security,
• 7:00
  Speaker 1: but it's a it's a commodity that can actually help
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  Speaker 1: generate cash and bring cash into these communities that basically
• 7:09
  Speaker 1: severely lack cash. And as an investor, you know, that's
• 7:13
  Speaker 1: something that we really focus on because you know, we
• 7:15
  Speaker 1: want to make a return on investment. We also in
• 7:18
  Speaker 1: order to do that, we really have to invest in
• 7:20
  Speaker 1: the communities in which we work, uplifting our customers to
• 7:23
  Speaker 1: become better customers, happier, healthier customers. Most most subsistence farmers
• 7:29
  Speaker 1: will keep about fifteen to twenty UM kanyegee chicken, which
• 7:32
  Speaker 1: is like a free range chicken um and these would
• 7:36
  Speaker 1: mature between eight two year eight months to two years,
• 7:38
  Speaker 1: depending on the species. UM. When you look at the yield,
• 7:43
  Speaker 1: you know of commercially grown chicken, you're producing chickens and
• 7:48
  Speaker 1: selling those in six weeks, so this is exponentially increasing
• 7:52
  Speaker 1: the potential for for income for all these communities are involved.
• 7:58
  Speaker 1: Power Hive currently operates on a all scale, but Laura
• 8:01
  Speaker 1: believes that the domino effect could be substantial for both
• 8:04
  Speaker 1: the company and the community. Well. Statistics show with women
• 8:08
  Speaker 1: who are engaged in business and are able to control
• 8:11
  Speaker 1: their income, which they're able to through informal cooperatives, women
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  Speaker 1: tend to invest more in business, they tend to invest
• 8:18
  Speaker 1: more in in education, and that has a huge knock
• 8:21
  Speaker 1: on effect in their communities. UM. Typically you'll also find
• 8:25
  Speaker 1: the community members who do see UM or are exposed
• 8:28
  Speaker 1: to successful businesses get inspired to do that themselves, you know.
• 8:32
  Speaker 1: So you'll have people on some of our grids UM
• 8:34
  Speaker 1: starting barbershops, UM, people starting maybe smaller versions of UM
• 8:40
  Speaker 1: poultry farms UM which they can afford. And all of
• 8:44
  Speaker 1: that wouldn't have happened if they hadn't had the exposure
• 8:47
  Speaker 1: or understood how it can be done or that it
• 8:49
  Speaker 1: can be done. There's one of our customers who was
• 8:52
  Speaker 1: involved in one of the first Cucupoa projects and she
• 8:56
  Speaker 1: went on to start her own brooder and I think
• 8:59
  Speaker 1: she's producing herself three thousand chicken um, and that's just
• 9:03
  Speaker 1: off of the back of the experience that she gained
• 9:05
  Speaker 1: on Cucaca. And as far as Chris is concerned, there
• 9:08
  Speaker 1: might not be a more powerful way to build sustainable
• 9:11
  Speaker 1: power grids in Kenya and Africa in general than by
• 9:14
  Speaker 1: solar micro grids. Twenty years ago, the price per kill
• 9:18
  Speaker 1: a lot of a solar panel was about six dollars.
• 9:21
  Speaker 1: Now it's twenty cents. History has shown us that you know,
• 9:26
  Speaker 1: as recently as the nineteen sixties and parts of the UK,
• 9:29
  Speaker 1: there was no electricity in these villages, right, The same
• 9:33
  Speaker 1: same exact sort of customer profiles existed then that we're
• 9:37
  Speaker 1: seeing now. So it's just so we have to have
• 9:39
  Speaker 1: a bit of patience, we have to have a bit
• 9:40
  Speaker 1: of vision. But in order to really accelerate this adoption
• 9:44
  Speaker 1: of distributed energy and solar and the sort of businesses
• 9:48
  Speaker 1: that we're looking at, we really need to make it economic.
• 9:50
  Speaker 1: We need to make it so that the local Kenyan
• 9:53
  Speaker 1: pension funds and other other funds will invest in these
• 9:55
  Speaker 1: types of businesses, so that these these grids, in this infrastructure,
• 9:59
  Speaker 1: which by a way, it's much more advanced and better
• 10:01
  Speaker 1: than any of the infrastructure we even have in the
• 10:03
  Speaker 1: United States is now being brought here is something that
• 10:06
  Speaker 1: is truly bankable. So yes, they've been left in the
• 10:09
  Speaker 1: dark for the last you know, fifty years, longer than
• 10:11
  Speaker 1: their counterparts in the UK, some of them. But the
• 10:14
  Speaker 1: benefit is they have the best technology now. They have
• 10:17
  Speaker 1: the solar lithium ion batteries and all these other technologies
• 10:20
  Speaker 1: that we've put in place that will stand the test
• 10:22
  Speaker 1: of time and have been built to last. It's opened
• 10:25
  Speaker 1: up a huge opportunity in Africa to deliver energy and
• 10:29
  Speaker 1: energy storage and this whole grid infrastructure, an ecosystem that
• 10:32
  Speaker 1: we're creating in a much lower cost way and in
• 10:35
  Speaker 1: a way that actually is going to create a long
• 10:38
  Speaker 1: term um distributed energy system that is actually going to
• 10:42
  Speaker 1: serve Africa for generations. This episode of Game Changers was
• 11:02
  Speaker 1: produced by Magnus Hendrikson and presented by me Matt Goldman.
• 11:06
  Speaker 1: It was based on a video report produced by myself
• 11:09
  Speaker 1: and Alan Jeffreys. For a visual experience of Game Changers,
• 11:12
  Speaker 1: check out our videos at Bloomberg dot com slash Green.
• 11:16
  Speaker 1: Francesca Levy is the head of Bloomberg Podcasts. See you
• 11:20
  Speaker 1: next time.