Across sub-Saharan Africa, the need for electricity is vast. Of the 1.1 billion people who lack access to power around the world, the majority are living on this continent, in rural communities far removed from national power grids.

While national utilities have proved unable to serve large populations, over the past few years a new solution has emerged: micro-grids. Using renewable energy sources such as the sun and wind, these distributed electricity generation systems operate independently of national grids. Advocates claim they offer the potential to power and transform whole villages across the continent.

Unfortunately, unlocking investment for micro-grid projects hasn’t been easy. For years, the industry has been dominated by NGOs and development organisations, with private capital put off by concerns around profitability and various regulatory challenges.

But recently things have begun to change, with new technology bringing down both the cost and risk associated with micro-grid projects. Companies today can identify the best potential sites and customers using data analytics. Power usage and payments can be controlled with smart metering. Tariffs can be adjusted in real-time. Slowly, the number of successful projects is growing.

Steamaco: a smart micro-utility for Africa and Asia

Founded in 2012, Manchester-based company Steamaco is one of the leading technology suppliers for micro-utilities in Africa and Asia. The company uses a cloud-based remote metering and payments system to automate utility operations and currently serves 10,000 people in six different countries.

Using mobile phones and money transfer systems such as the popular Kenyan service, M-Pesa, customers with Steamaco are able to pay for electricity from the comfort of their own homes. The system also does away with the need for utility companies to send out bills, chase payments and hire staff to read meters.

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“Within 60 seconds our system will register a payment, send a message remotely to the meter and the utility will then switch on power,” says Harrison Leaf, CEO and co-founder of Steamaco. “This is more convenient than I have in my home in Manchester.”

The company’s web-based monitoring system also allows utilities to closely monitor the technical and financial performance of its network, dealing with any problems that might arise in real-time, and redirecting spare capacity during daylight hours for other uses like water-pumping.

From turbine building to smart metering

For a company that was formed in 2012 with what is calls “no grand designs and no big commercial concepts”, Steamaco has certainly come along way. At the time, Leaf says he was inspired by the skill of automotive mechanics working in East Africa.

He wondered if their expertise could be repurposed for building small wind turbines. Soon he designed a turbine that could be made entirely from scrap automotive parts and built a workshop to train people.

“We hired 20 blue collar guys and built small wind turbines in western Kenya, putting them up on schools and health clinics,” says Leaf. “We were powering the countryside.”

The workshop lacked the scale Steamaco was looking for, however, and the company soon decided to set up an actual micro-utility.

“That was a very significant step for us because as a micro-utility looking to sell power we had to solve a lot of our own problems,” says Leaf.

“The most significant was the automation of the asset: the billing and the metering. It was as we solved these problems that we realised [smart metering] was the business we wanted to run. And we have this reasonably held belief that we can solve these problems better than others because we were our own first customer.”

Now working as a technology supplier, Leaf says the market for smart metering solutions in Africa is very different to Europe.

“In Europe it is highly regulated and defined by government directives,” he says. “In the off-grid context and in Africa – where many countries are looking to privatise their utility sectors – there is a lot more innovation. We are able to offer services that are more advanced in these countries than are possible in the UK.”

While some European smart meters have been used for energy access projects in Africa, Leaf says they are too extensive and struggle to cater for the technical demands of working on the continent, with an unreliable infrastructure and internet availability.

Educating customers on smart metering

While Steamaco’s preference is to operate its system using 2G and 3G, Leaf says it can also function entirely with SMS in the event of the internet failing.

“We can manage an entire mini-grid with hundreds of thousands of connections by just sending a few SMS texts back and forth every hour,” he says. “We are completely unique in this.”

Catering for a consumer that has likely never had power before and may not understand what a kilowatt hour is, is an equally difficult thing to navigate.

“They are going from fuel-wood and kerosene lamps to paying per kilowatt hour or per week or month,” Leafs says. “That consumer needs a lot of education in order to trust the service and to pay regularly and understand what they are buying.”

Steamaco’s smart meter comes with a whole slew of automated marketing features, Leaf adds, that enable utilities to reach and educate their customers. Even if a consumer lives way off-grid, without a smartphone or email address, “we can still communicate with them in a language that they understand on devices that they use through SMS and channels that work for them,” he says. “There are lots of features designed with the end-consumer in mind.”

As the company expands, Leaf says Steamaco’s long journey in East Africa is now paying dividends. It recently rolled out 20,000 meters in West Africa, from containerised solar mini-grids in Mali to dense shopping markets in Kano, northern Nigeria.

“All these projects have the same challenges: operating a large number of small distributed energy assets in a really technically challenging context,” Leaf says. “If utility companies want to operate in these environments they will need us.”