WEBVTT - Bonus: Game Changers, Part 3 0:00:05.360 --> 0:00:08.880 Hello, and welcome to Game Changers. I'm Matt Goldman. As 0:00:08.920 --> 0:00:13.039 the Earth is facing an increasingly consequential climate crisis, inquisitive 0:00:13.080 --> 0:00:15.560 minds all over the globe are hard at work trying 0:00:15.600 --> 0:00:18.520 to find solutions, and many of them have been able 0:00:18.520 --> 0:00:21.520 to translate their Eureka moments into action at a greater 0:00:21.560 --> 0:00:24.920 pace than scope than sometimes gloomy headlines might have us think. 0:00:25.560 --> 0:00:28.280 In this four part mini series, will meet the visionary 0:00:28.320 --> 0:00:31.400 minds who attempt to sculpt the future of sustainable energy 0:00:31.520 --> 0:00:34.560 and global resources. We'll get a peek behind the curtains 0:00:34.600 --> 0:00:38.440 of their factory floors here of the sometimes surprising origins 0:00:38.440 --> 0:00:42.159 of their ideas, and be introduced to a potentially greener 0:00:42.200 --> 0:00:55.800 tomorrow in this episode micro Grids and micro Economies. Currently, 0:00:56.000 --> 0:01:00.200 I believe the households which have got power in Kenya's 0:01:00.200 --> 0:01:06.720 approblemly about so there is another we just got no 0:01:06.840 --> 0:01:11.120 power at all. Their household is indicated largely desa in 0:01:11.120 --> 0:01:15.400 the rural areas. That's zachary Io, a man who knows 0:01:15.440 --> 0:01:19.040 about power and electricity. As a former executive at the 0:01:19.120 --> 0:01:23.319 National Power Company, he helped expand Kenya's electricity access from 0:01:23.360 --> 0:01:26.840 eighteen percent of the population in two thousand ten to sixty, 0:01:29.520 --> 0:01:33.200 the highest in mainland East Africa. But born and raised 0:01:33.240 --> 0:01:36.360 in rural Kenya, he also experienced the country is often 0:01:36.440 --> 0:01:40.120 inadequate access to electricity early in life. The first time 0:01:40.120 --> 0:01:42.880 I had power in my in my village was in 0:01:42.880 --> 0:01:46.959 the year nineteen. Before that, there was no power at all, 0:01:47.000 --> 0:01:52.120 completely set up the starts of living. Why extremely very 0:01:52.320 --> 0:01:57.320 very low because the communication was zero. But the country 0:01:57.400 --> 0:02:00.800 is not alone in its struggles. About six fifty million 0:02:00.840 --> 0:02:03.800 people in Africa live without access to power and a 0:02:03.880 --> 0:02:08.400 continent marred by inequality and poverty. This raises an uncomfortable question, 0:02:09.000 --> 0:02:11.639 how do you bring people out of extreme poverty without 0:02:11.639 --> 0:02:15.040 wrecking the climate in the process. Conventional wisdom says it 0:02:15.040 --> 0:02:17.760 will require the burning of enough fossil fuels to counsel 0:02:17.840 --> 0:02:21.440 out any progress that developed world makes on emissions. But 0:02:21.520 --> 0:02:25.160 in rural Kenya, a small experiment is underway aiming to 0:02:25.200 --> 0:02:28.480 see if it's possible to have the economic uplift without 0:02:28.520 --> 0:02:33.280 the environmental catastrophe. It's spearheaded by power Hive, a privately 0:02:33.320 --> 0:02:37.480 licensed utility company where Ako is currently the executive chairman. 0:02:43.720 --> 0:02:50.760 Here let's go my arms crossed, or does it okay okay. 0:02:54.560 --> 0:02:57.680 Arriving in Africa in two thousand eight, Power Hive CEO 0:02:57.800 --> 0:03:01.400 and founder Chris Horner found a challenge enginge landscape rife 0:03:01.400 --> 0:03:05.440 with potential. Things have not really moved very much in 0:03:05.440 --> 0:03:07.959 the last hundred years, with the exception of course, of 0:03:08.080 --> 0:03:11.280 mobile phones and mobile money and things like this. So 0:03:11.680 --> 0:03:15.480 what's happening not only in Kesey and other parts of Kenya, 0:03:15.600 --> 0:03:17.360 but all over Africa and other parts of the world. 0:03:17.720 --> 0:03:19.640 This is a huge gap in terms of those that 0:03:19.680 --> 0:03:23.240 have electricity and those that don't. Here in Kisy, Horner 0:03:23.280 --> 0:03:26.400 found the perfect circumstances to try out his new solutions. 0:03:27.200 --> 0:03:32.400 Power Hive Senior business manager Laura Kiplegat explains, well, we 0:03:32.400 --> 0:03:34.760 went to Kesi because we were looking for a community 0:03:35.000 --> 0:03:36.720 UM that is on the fringe of the grid like 0:03:36.760 --> 0:03:40.000 most rural communities in Kenya, but did have the population 0:03:40.040 --> 0:03:42.560 density to make sense for us as a business. And 0:03:42.680 --> 0:03:46.360 Kis is a happy medium. You know, they have good son, 0:03:46.800 --> 0:03:49.119 good people who are willing, you know to sign onto 0:03:49.160 --> 0:03:52.240 the project um but they it had all the components 0:03:52.240 --> 0:03:54.600 that we needed, you know, to make our business work 0:03:55.680 --> 0:03:59.880 that business. Power Hive currently manages around twenty five micro 0:04:00.000 --> 0:04:03.240 grids in the Kisi region, grids that operate on solar 0:04:03.240 --> 0:04:07.960 power stored in batteries ideal for the sunny climate. These 0:04:08.000 --> 0:04:11.160 mini grids are power systems that supply enough electricity for 0:04:11.200 --> 0:04:14.840 a small community. Schools and homes get electric light and 0:04:14.920 --> 0:04:18.680 internet service. Agricultural labor like maize milling, doesn't have to 0:04:18.720 --> 0:04:22.039 be done by hand anymore. Electric pressure cookers eliminate the 0:04:22.080 --> 0:04:25.080 need to chop down trees or burn charcoal to make meals. 0:04:25.960 --> 0:04:28.240 All of these things raise the standard of living and 0:04:28.279 --> 0:04:33.280 relieve the environment. But there's one big problem. Our typical 0:04:33.320 --> 0:04:39.000 communities are generally subsistence farming. Most of them are not 0:04:39.080 --> 0:04:42.760 formally employed. Most of them don't have formal education or 0:04:42.800 --> 0:04:47.799 have not completed anything really beyond primary education UM and 0:04:48.240 --> 0:04:50.680 are really the bottom of the pyramid in the economy. 0:04:52.960 --> 0:04:55.720 When we first came into too Kenya and into Keys, 0:04:56.080 --> 0:05:01.039 we quickly realized that our consumers are too poor to 0:05:01.120 --> 0:05:05.120 pay for energy power. Hive solution is as simple as 0:05:05.120 --> 0:05:09.360 their solar panels. Create a microeconomy to bolster local businesses. 0:05:09.839 --> 0:05:15.520 So we've introduced electric vehicles. We've introduced electric milling machines 0:05:15.560 --> 0:05:23.200 to to to provide a better, lower cost solution for milling. Yeah. 0:05:25.160 --> 0:05:27.320 But the starkest example of this could be found in 0:05:27.400 --> 0:05:32.760 Poko Poa Power Hives ambitious poultry farming initiative. Most of 0:05:32.800 --> 0:05:35.800 our communities are subsistence farmers. These are people who are 0:05:35.839 --> 0:05:39.919 already wearing chicken, but are limited by the capital you 0:05:39.960 --> 0:05:44.680 know UM issue, and are limited by exposure and understanding 0:05:44.720 --> 0:05:48.400 of how to to scale a poultry business. So we 0:05:48.480 --> 0:05:53.400 developed a program to bring commercial poultry farming to our communities, 0:05:53.480 --> 0:05:57.159 create an income for for our communities, and then also 0:05:57.240 --> 0:06:00.000 create a good energy customer for us as a business. 0:06:01.000 --> 0:06:03.360 So we set up CUCA Poa UM in sort of 0:06:03.440 --> 0:06:07.480 joint partnership with local corporatives whose members are all power 0:06:07.560 --> 0:06:10.599 hive customers UM. We tend to have groups of ten 0:06:11.320 --> 0:06:15.159 typically they're all women UM or at least about women 0:06:15.200 --> 0:06:20.920 across our twenty brewderhouses. Then the corporative bringing the capital 0:06:21.000 --> 0:06:23.520 to build the infrastructure, so they'll build a brooder house, 0:06:23.600 --> 0:06:26.560 they'll buy all the equipment necessary UM, which is the 0:06:26.560 --> 0:06:30.400 heating lamps, the lighting lamps, UM feeder trays, UM and 0:06:30.520 --> 0:06:33.719 water troughs, and then power Hive brings in the chicks. 0:06:34.279 --> 0:06:39.000 We provide batinary services and feed, and then we also 0:06:39.080 --> 0:06:41.880 help help them secure off takers for the poultry at 0:06:41.880 --> 0:06:47.279 the end of the cycle. It's a virtuous cycle. For 0:06:47.320 --> 0:06:50.280 power Hive, they give their customers the money and guidance 0:06:50.360 --> 0:06:53.359 to start businesses that use their electricity, and then a 0:06:53.400 --> 0:06:57.400 portion of the income from those businesses pays for the electricity. 0:06:57.440 --> 0:07:00.719 So the poultry business is great because it provides food security, 0:07:00.760 --> 0:07:05.080 but it's a it's a commodity that can actually help 0:07:05.839 --> 0:07:09.240 generate cash and bring cash into these communities that basically 0:07:09.560 --> 0:07:13.400 severely lack cash. And as an investor, you know, that's 0:07:13.440 --> 0:07:15.800 something that we really focus on because you know, we 0:07:15.880 --> 0:07:18.360 want to make a return on investment. We also in 0:07:18.440 --> 0:07:20.000 order to do that, we really have to invest in 0:07:20.040 --> 0:07:23.000 the communities in which we work, uplifting our customers to 0:07:23.040 --> 0:07:29.160 become better customers, happier, healthier customers. Most most subsistence farmers 0:07:29.160 --> 0:07:32.400 will keep about fifteen to twenty UM kanyegee chicken, which 0:07:32.440 --> 0:07:36.200 is like a free range chicken um and these would 0:07:36.200 --> 0:07:38.880 mature between eight two year eight months to two years, 0:07:38.960 --> 0:07:43.239 depending on the species. UM. When you look at the yield, 0:07:43.720 --> 0:07:48.160 you know of commercially grown chicken, you're producing chickens and 0:07:48.200 --> 0:07:52.680 selling those in six weeks, so this is exponentially increasing 0:07:52.720 --> 0:07:56.200 the potential for for income for all these communities are involved. 0:07:58.120 --> 0:08:01.360 Power Hive currently operates on a all scale, but Laura 0:08:01.400 --> 0:08:04.440 believes that the domino effect could be substantial for both 0:08:04.480 --> 0:08:08.760 the company and the community. Well. Statistics show with women 0:08:08.800 --> 0:08:11.440 who are engaged in business and are able to control 0:08:11.520 --> 0:08:15.720 their income, which they're able to through informal cooperatives, women 0:08:15.760 --> 0:08:18.360 tend to invest more in business, they tend to invest 0:08:18.400 --> 0:08:21.560 more in in education, and that has a huge knock 0:08:21.640 --> 0:08:25.120 on effect in their communities. UM. Typically you'll also find 0:08:25.160 --> 0:08:28.360 the community members who do see UM or are exposed 0:08:28.360 --> 0:08:32.080 to successful businesses get inspired to do that themselves, you know. 0:08:32.160 --> 0:08:34.839 So you'll have people on some of our grids UM 0:08:34.880 --> 0:08:40.200 starting barbershops, UM, people starting maybe smaller versions of UM 0:08:40.440 --> 0:08:44.280 poultry farms UM which they can afford. And all of 0:08:44.280 --> 0:08:47.160 that wouldn't have happened if they hadn't had the exposure 0:08:47.240 --> 0:08:49.400 or understood how it can be done or that it 0:08:49.480 --> 0:08:52.680 can be done. There's one of our customers who was 0:08:52.720 --> 0:08:55.559 involved in one of the first Cucupoa projects and she 0:08:56.480 --> 0:08:59.360 went on to start her own brooder and I think 0:08:59.440 --> 0:09:03.560 she's producing herself three thousand chicken um, and that's just 0:09:03.679 --> 0:09:05.480 off of the back of the experience that she gained 0:09:05.480 --> 0:09:08.600 on Cucaca. And as far as Chris is concerned, there 0:09:08.679 --> 0:09:11.280 might not be a more powerful way to build sustainable 0:09:11.320 --> 0:09:14.600 power grids in Kenya and Africa in general than by 0:09:14.679 --> 0:09:18.199 solar micro grids. Twenty years ago, the price per kill 0:09:18.200 --> 0:09:20.840 a lot of a solar panel was about six dollars. 0:09:21.400 --> 0:09:26.199 Now it's twenty cents. History has shown us that you know, 0:09:26.280 --> 0:09:29.080 as recently as the nineteen sixties and parts of the UK, 0:09:29.600 --> 0:09:33.280 there was no electricity in these villages, right, The same 0:09:33.360 --> 0:09:37.240 same exact sort of customer profiles existed then that we're 0:09:37.240 --> 0:09:39.360 seeing now. So it's just so we have to have 0:09:39.400 --> 0:09:40.880 a bit of patience, we have to have a bit 0:09:40.920 --> 0:09:44.640 of vision. But in order to really accelerate this adoption 0:09:44.679 --> 0:09:48.080 of distributed energy and solar and the sort of businesses 0:09:48.080 --> 0:09:50.559 that we're looking at, we really need to make it economic. 0:09:50.760 --> 0:09:53.040 We need to make it so that the local Kenyan 0:09:53.080 --> 0:09:55.719 pension funds and other other funds will invest in these 0:09:55.720 --> 0:09:59.319 types of businesses, so that these these grids, in this infrastructure, 0:09:59.520 --> 0:10:01.920 which by a way, it's much more advanced and better 0:10:01.960 --> 0:10:03.439 than any of the infrastructure we even have in the 0:10:03.520 --> 0:10:06.679 United States is now being brought here is something that 0:10:06.760 --> 0:10:08.959 is truly bankable. So yes, they've been left in the 0:10:09.040 --> 0:10:11.520 dark for the last you know, fifty years, longer than 0:10:11.559 --> 0:10:14.400 their counterparts in the UK, some of them. But the 0:10:14.440 --> 0:10:17.040 benefit is they have the best technology now. They have 0:10:17.080 --> 0:10:20.440 the solar lithium ion batteries and all these other technologies 0:10:20.480 --> 0:10:22.680 that we've put in place that will stand the test 0:10:22.679 --> 0:10:25.760 of time and have been built to last. It's opened 0:10:25.800 --> 0:10:29.200 up a huge opportunity in Africa to deliver energy and 0:10:29.320 --> 0:10:32.079 energy storage and this whole grid infrastructure, an ecosystem that 0:10:32.120 --> 0:10:35.200 we're creating in a much lower cost way and in 0:10:35.240 --> 0:10:38.079 a way that actually is going to create a long 0:10:38.200 --> 0:10:41.959 term um distributed energy system that is actually going to 0:10:42.240 --> 0:11:02.360 serve Africa for generations. This episode of Game Changers was 0:11:02.400 --> 0:11:06.040 produced by Magnus Hendrikson and presented by me Matt Goldman. 0:11:06.720 --> 0:11:09.160 It was based on a video report produced by myself 0:11:09.200 --> 0:11:12.840 and Alan Jeffreys. For a visual experience of Game Changers, 0:11:12.960 --> 0:11:15.720 check out our videos at Bloomberg dot com slash Green. 0:11:16.640 --> 0:11:20.400 Francesca Levy is the head of Bloomberg Podcasts. See you 0:11:20.440 --> 0:11:20.920 next time.