entrepreneurship forum: dr. jay taneja, senior research scientist at ibm research - africa

Entrepreneurship in Energy and Energy Efficiency: Opportunities, Pitfalls, and Successes, in Kenya and Beyond

Dr. Jay Taneja Research Scientist

IBM Research – Africa [email protected]

© 2015 International Business Machines Corporation 2

Outline of Today’s Talk

• Background on energy and key concepts

• Electricity supply in Africa

•  Important trends in the energy industry • Energy entrepreneurship – pitfalls, opportunities, and examples


Energy and society

• A critical input to growth and prosperity

•  �The electric grid is the most significant engineering achievement of the 20th century�

• An old and slow-moving industry – primed for disruption by IT

• Enormous investment happening on the continent (USAID Power Africa, etc.)

• A key driver of climate change – how can we improve energy access and quality while avoiding catastrophic climate change?

–  China and India adding on average four coal plants per week –  U.S. consumes 20%+ of oil, but has only 4% of world’s population


Some useful jargon and concepts in energy

•  Energy vs. Electricity •  Energy (Joules/kWh), Power (Watts), Current (Amps), Voltage (Volts), Frequency (Hz) •  Electricity: Alternating Current vs. Direct Current •  Renewable vs. Non-renewable •  Energy efficiency and energy conservation •  Smart grid vs. Not-so-smart grid •  Smart meters / Advanced Metering Infrastructure (AMI) •  On-grid vs. Off-grid, electrification •  Urban and rural


5"

Baseline(+(Dispatchable(Sources( Oblivious(Loads(

Communica+on"

Non9Dispatchable(Sources(

Communica+on"

Supply9Following(Loads(

Transmission"Genera+on" Demand"Distribu+on"

Towards an aware/smart electricity infrastructure

(Source: David Culler)


How is electricity produced in African grids?

0%

20%

40%

60%

80%

100%

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

% o

f Ele

ctric

ity S

uppl

y

NuclearCoalNatural GasRenewablesOil/DieselHydro

0%

20%

40%

60%

80%

100%

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

% o

f Ele

ctric

ity S

uppl

y

NuclearCoalNatural GasRenewablesOil/DieselHydro

Kenya Nigeria (Source: The World Bank)


Rural and urban electrification disparity

!20$30%!electri-ication!in!Sub$Saharan!Africa!(~600!million!lack!

access);!rate!varies!by!country!and!by!source!!

!Challenges: low

population density, varying fuel costs, grid

connection costs, demand outstrips supply

Rural Electrification Urban Electrification


An industry view: the electricity ecosystem in Kenya

(Source: Henry Gichungi, KPLC)


Trends in energy and electricity

•  The rise of natural gas and renewable generation • Emergence of demand-side grid resources • Enormous fluctuations in oil prices • Big investment into more generation, but for whose gain? • African grids not expanding quickly enough to improve access • Plummeting cost of solar and associated installation costs • Solar home systems powering AC and DC appliances • Batteries becoming affordable, and replacing diesel • Potential for microgrids for increasing electricity access and reliability


Scaling of technologies

(Source: Arun Majumdar)


Outline of Today’s Talk

• Background on energy and key concepts

• Electricity supply in Africa

•  Important trends in the energy industry • Energy entrepreneurship – pitfalls, opportunities, and examples


What is a startup?

Definition: A startup is an organization formed to search for a repeatable and scalable business model.

“Success consists of going from failure to failure without loss of enthusiasm.”

Winston Churchill

(Source: Steve Blank - http://steveblank.com/2010/01/25/whats-a-startup-first-principles/)


Data Sources

•  Twitter

•  Power Meters

•  Mobile Phone Chargers

•  Reservoir and Power Data

(Kenya)

(Source: Javier Rosa, UCB)

Problem: electricity outages

• Spatiotemporal distribution, driven by power shortages, weather, operations, more?

• Predicting outages is difficult, predicting outage risk may be more realistic

• Benefits: Guide utility upgrades/repair/maintenance, inform consumers of outages


‒  API!for!change!in!power!state!(BatteryManager)!‒  GPS!for!localization!‒  Accelerometer/microphone!for!false!positive!detection!‒  Microphone/API!for!AC!mains!detection!‒  Smart!meter!bene-its!at!a!fraction!of!the!cost!

!!

Smart Phones

Possible solution: collecting outage data from mobile phones


Potential business models

• Sell data to utilities –  Pros: Simplest business model – interested in reducing operations cost and improving service –  Open questions: How to distribute software? Why will end users install? What extent of coverage?

• Sell predictions to electricity consumers –  Pros: More potential customers, possible benefits from network effects –  Open questions: To whom – residences, businesses? Are outage predictions useful? What is the benefit

of using phones over existing products?

• Sell predictions to telcos/tower companies –  Pros: Huge consumers of energy with potential to optimize, could partner to sell data to utilities –  Open questions: Are outage data already in use at tower sites – can this be done in software? How does

maintenance work?


‒  API!for!change!in!power!state!(BatteryManager)!‒  GPS!for!localization!‒  Accelerometer/microphone!for!false!positive!detection!‒  Microphone/API!for!AC!mains!detection!‒  Smart!meter!bene-its!at!a!fraction!of!the!cost!!!

Smart Phones

Feature Phones

‒  Single$use!device!plugged!in!with!no!battery!‒  Localization!done!a"priori"‒  Dedicated!application!periodically!reports!presence!‒  Absence!indicates!power!outage!‒  Introduced!after!-inding!“holes”!in!smartphone!monitoring!

Possible additional solution: not only smartphones


Pitfalls

• Not understanding your customers •  Improperly identifying your competitors • Not considering competitive advantages •  Taking too long to test an idea, or failure to measure your tests •  Focusing on the wrong opportunities – too little impact or too small of a problem • Devices – challenges of manufacturing, maintenance, and cost • Crowdsourcing – challenges of bootstrapping, incentivization, and data quality • Partners – challenges of motivation and competition

Trust (your intuition) but verify (its relevance and scale)


Energy + IT startup examples

(Ukraine) / (Brazil) – uses single hardware device to monitor residential mains electricity, discerning all individual appliances and recommending conservation/efficiency measures

(USA) – collaborates with utility to monitor customers’ smart meter data to recommend conservation/efficiency measures

(USA) – uses Bluetooth-enabled sensor connected to car OBD-II port to provide driver feedback for improving acceleration and braking habits

(USA) – connects officeworkers to building climate management systems entirely via software to improve comfort and reduce energy


Nest: Learning occupant patterns in the home

•  Introduced in 2011, Nest is a �learning thermostat� •  Includes WiFi and sensors for temperature and motion •  Learns models of room and home heating, user patterns,

and energy costs •  Improves heating performance and reduces energy spent

with more experience •  Incorporates lessons learned from millions of thermostats • Sold to Google in January, 2014, for $3.2bn

Energy and IT startups have real value.


Questions?

Jay Taneja [email protected]

entrepreneurship forum: dr. jay taneja, senior research scientist at ibm research - africa

Business

energy energy

electricity energy jouleskwh

energy access

energy conservation

electricity ecosystem

increasing electricity

frequency hz electricity

electric grid