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Access to electricity has been described as very essential for supporting electronic devices and IT infrastructure that drive the expansion of the Internet economy, projected to hit $180 billion by 2025.
The e-Conomy Africa 2020 report produced by Google and the International Financial Corporation (IFC), said electricity enables users to power their devices, especially smartphones and tablets, and telecom operators to run their IT infrastructure, including main distribution frames, base stations, and Internet Exchange Points.
The report noted that data centre operators also need access to reliable electricity to provide data storage and processing services.
Google, and IFC observed that while such access is a given in most parts of the world, Africa, especially the sub-Saharan region (with South Africa as a partial exception) is still home to more than half a billion people without electricity.
The report stressed that even in those countries with decent access; power supply remains limited and unreliable. “In Africa, electricity consumption per capita represents only six per cent of the global average.”
The report also observed that these challenges are constraining the expansion of the Internet economy, especially in the rural areas, and for small and medium sized businesses that suffer disproportionately. It said countries with low access to electricity, such as Democratic Republic of Congo (DRC), Niger, and Madagascar, also have low access to the Internet, while the reverse holds true for countries with higher access to electricity, such as South Africa, Ghana, and Senegal.
According to the report, only 23 per cent of rural inhabitants in SSA have access to electricity, with Internet penetration below 15 per cent.
Google noted that while large businesses can rely on electric generators, SMEs pay the price of power outages when their ability to conduct business is disrupted along with their digital connectivity.
According to projections, electricity consumption for data centres is expected to outstrip increases in overall generation in several countries, further straining the power grid.
However, it was observed that the private sector has been devising innovative solutions to overcome the energy challenges in Africa. It noted that for telecoms operators, not being able to count on power at their tower sites, is the most significant obstacle in providing dependable mobile phone service. As part of their growth strategy, the report said the operators increasingly outsource the supply of electricity and the maintenance of electrical equipment to specialised energy service companies (ESCOs) to minimize energy cost.
To bridge the electricity gap, the report informed that operators are engaging in infrastructure sharing through towercos to further reduce energy costs. It stressed that in many cases, this has resulted in increased network coverage and service quality, potentially expanding the Internet economy.
This move, according to Google and IFC, means that the boundaries of the power market may continue to blur as non-traditional energy providers (telcos, fintech) continue to innovate in that space and generate electricity, especially for solutions outside of traditional large stand-alone utilities.
The report noted that at a more macro level, governments are ramping up the effort to alleviate energy challenges, thereby bolstering the expansion of the Internet economy.
“Many countries are collaborating on an effort to increase the number of people gaining access to electricity yearly from the current 20 million to above 60 million.”
While DRC will remain home to the vast majority of individuals without access to electricity in 2030, Kenya, Ethiopia and Senegal are all set to achieve universal access to electricity before 2030. South Africa and Ghana are expected to reach full electrification by 2030. Strong efforts in Nigeria are expected to increase access to electricity, reaching 80 per cent of the population by 2030.”