The demand for electrical power in the developing world is growing at nearly three times the rate of demand in the developed world. And as countries in the global South, especially in Africa, add newly-affordable common household items such as refrigerators and air-conditioning units, the existing power grids, most of which were set up in the late 1970s, are becoming overwhelmed – already most operate at rates far higher than their capacity can support. Just last week, Kenya began rationing its electricity due to the low water supply for hydroelectricity plants from an ongoing drought.
The resultant “brown-outs” and blackouts have spawned a small but vocal political constituency among an increasingly powerful upper middle class in the developing world that has called for more consistency in power supply. But because permanent power generating projects are often delayed by political cycles, budget pressures, access to capital and poor supporting infrastructure like roads and deep water ports, governments often turn to temporary solutions which cost in excess of four times the going rate.
The result is an enormously profitable market for temporary energy supply. Companies like Aggreko, the world’s leader in short term energy supply, offer semi-permanent solutions that utilize existing shipping mechanisms in innovative ways to get power in hard-to-reach places with low infrastructure. Unsurprisingly, this is phenomenally expensive for countries to keep up. But they do, because the alternative doesn’t exist. As long as the obstacles preventing long term investment persist, Africa will continue to pay for its energy at rates four times that of the rest of the world. The pace of its development, similarly, will reflect this disparity.
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