From the Ground Up: The Business and Policy Landscape for Energy Access in East Africa (2018-2019)

Background

Access to electricity and other forms of modern energy is crucial to development. Power is indispensable for activities such as lighting, refrigeration, heating, cooling and commerce and development more broadly. Yet about 1.1 billion people lack access to electricity, and another billion or so have unreliable access that hinders productivity and economic development among households, companies and public institutions.

While a number of actors have entered the market, with public and private commitments totaling about $19 billion per year in recent years, a substantial investment gap remains. Understanding the barriers to investment is essential for addressing the needs of the households, communities and enterprises that lack access to modern energy sources.

Project Description

This Bass Connections project aims to understand the energy access problem and potential solutions from the perspective of people who are dealing with it firsthand. These include households, communities and enterprises that lack access to reliable electricity; international and domestic companies that are in the market to provide off-grid and on-grid solutions; and policymakers.

Within this “bottom-up” context, the project team will address the barriers to investment by creating a market analysis and a regulatory roadmap. Targeted at policymakers and market actors, these products will aim to help accelerate the development of well-functioning markets for public and private investment in on-grid and off-grid electricity provision.

The market analysis will involve identifying institutions and private actors who together comprise the market ecosystem of electricity providers. For off-grid and minigrid power, the work includes analyzing the products available and business models for distribution, remote monitoring and payment as well as related services among existing suppliers and intermediaries. As team members analyze the market, they will also seek to identify possible gaps in institutions that facilitate effective markets, such as entities that provide reliable information about product quality or adjudicate contract disputes. The team will probe the interdependencies among market actors, examine which customers are being served, compare the positions of domestic and foreign entrepreneurs and collect high-level data on sources of financial and human capital.

The team will also do analysis around the on-grid electricity market. As countries become increasingly interested in tapping private capital markets and building more robust power systems, they are considering what sorts of reforms may be necessary to the traditional government-owned, vertically integrated utility model. Accordingly, the team will produce a tailored regulatory assessment and roadmap tool to help policymakers with the complicated decisions around power markets and regulatory design. The roadmap will cover elements such as power contracting arrangements, pricing, dispatching, day-ahead markets and other mechanisms for achieving increased system efficiency.

Anticipated Outcomes

Off-grid market analysis; discussion paper on institutional and policy obstacles to investment in energy access, with recommendations for policymakers; expert panel on business and policy landscape for reliable electricity access in East Africa; at least one conference, discussion or journal paper based on regulatory roadmap and market analysis; team poster and final presentation

Student Opportunities

Students will learn how to characterize the relationship between access to electricity, household livelihood, productivity, development, health and environmental sustainability; apply a formalized research process; apply tools and frameworks for market analysis for products and services; understand the role of institutional voids in emerging economies and the unique policy frameworks and elements that contribute to successful delivery of energy services; explain the fundamentals of how private and public institutions facilitate effective markets; and understand policy frameworks and elements that facilitate or hinder efficient power market operation. Additionally, graduate students will gain project management skills.

The ideal composition of the team includes six to eight undergraduate and graduate students from such disciplines as economics, public policy, engineering, business, environmental science, global health, anthropology, sociology and law. Participating graduate students will serve as project managers.

The team will meet one to two times per week throughout the year. There will also be a field experience in East Africa (approximately one week; location to be determined) for students to interact with communities, policymakers and entrepreneurs who deal with energy access issues on a daily basis. Students should plan to do some work in late spring or summer 2018 (a small number of readings and group meetings) in preparation for the August 2018 field activity.

Students are expected to enroll for full credit for two semesters, and to devote at least 10 hours per week. Each student will prepare an individual written paper and an oral presentation in each semester. Grades will be based on these as well as on four peer assessments, reading assessments in each group meeting through the fall short course, team reports for each semester and a poster presentation in the spring.

Timing

Summer 2018 – Spring 2019  

  • Summer 2018: Mid to late August (e.g., August 15-25): spend about 7 days in an emerging economy in sub-Saharan Africa visiting communities and households in varying stages of energy access, as well as with entrepreneurs, policymakers and others involved in providing energy access
  • Fall 2018: Short course on frameworks for market analysis, market failures, institutional voids and implications for firms, policy analysis skills, regulatory models, energy access, impacts and drivers of on and off grid electrification; engage in process of scoping a problem statement, defining goals and developing process for team interaction and collaboration; short paper that summarizes learning to date and describes goals for spring
  • Spring 2019: Execute projects; report out; compile end products and share through public presentation; participate in Bass Connections Showcase and, if desired, Sustainable Energy Transitions Initiative (SETI) Annual Conference

Crediting

Independent study credit available for fall and spring semesters; summer funding

Faculty/Staff Team Members

T. Robert Fetter, Nicholas Institute for Environmental Policy Solutions*
Hannah Girardeau, Sanford School of Public Policy
Marc Jeuland, Sanford School of Public Policy
Robyn Meeks, Sanford School of Public Policy
Dalia Patino Echeverri, Nicholas School of the Environment-Environmental Sciences and Policy
Subhrendu Pattanayak, Sanford School of Public Policy
Jonathan Phillips, Nicholas Institute for Environmental Policy Solutions*
John Simpkins, Duke Law

Graduate Team Members

Yating Li, Environmental Policy-PHD

* denotes team leader

Status

Active, New