Want an Alternative to the Traditional Utility? Look at Tanzania
The future alternative to the traditional electric utility may emerge first in Tanzania.
The East African nation has developed the best system of regulating and spurring off-grid power systems anywhere in the world, according to the annual Climatescope study into energy investment trends in developing nations by Bloomberg New Energy Finance.
With more than 620 million people living without access to electricity, Africa is becoming a working laboratory for financial and technical innovations that can bring power to the masses without erecting centralized power plants and costly distribution grids. The continent already has attracted $450 million for off-grid power systems fed by renewables such as wind and solar, BNEF estimates.
“Tanzania has been a pioneer for the continent,” said Nico Tyabji, an analyst at the London-based research arm of Bloomberg LP. “Its smart policy framework for small power projects and mini-grids built up a significant project pipeline.”
The nation trumped Kenya, Uganda and 16 other Sub-Saharan countries in the Climatescope rankings for a second consecutive year. BNEF analysts evaluated the markets based on energy policy and regulations, electrification rates, project developers and private investment.
An off-grid system is a small electricity network that can range from solar-powered lanterns to rooftop photovoltaic panels to miniature grids. Power is generated and distributed independent of the country’s national grid. The technologies have been touted as an answer for lowering energy poverty, particularly in rural areas.