Diesel. A silent killer of dreams?

blog-chart-diesel-Nigeria-renewables

There is a constant humming noise. The clamour and clatter is obnoxious, annoying and spewing what looks like grey dust into the air. And the smell. Oh the smell. The malodorous smog coming from the diesel generators in Africa is enough to turn a beautiful blue sky to a depressing grey. I’ve seen them everywhere; businesses, homes, constructions sites and restaurants, in every African country I’ve travelled, but on this particular trip to Uganda it really bothers me. And we know why people use them, it’s a cheap way to supplement an unreliable grid with sporadic power outages. But in the stinky haze it hits me; these noisy diesel generators are also a silent killer.

I believe they are silently killing the dreams of commercial business owners. Entrepreneurs with vision and determination are trying to build small businesses; whether they be in manufacturing, agricultural farms and factories or other sector, they are trying to squeak out a reasonable profit, provide a decent income for their families and shareholders and generally carve out a better future, maybe even growing their start-up to large multinational corporation. However, the dreams of small and medium business owners in Africa are silently dying amidst the noise of what appear to be a cheap and easy solution; diesel generators. Because they have no other affordable, reliable choice, or so they believe.

The dreams are being smoked out because the small business profits are being eaten away by the high cost of diesel. And the worst part is that the diesel for the generators not only costs a fortune, rising some say at 10-20% a year in Sub Saharan Africa (deregulated rate), but they also harm the environment at an alarming rate – up to 1600 gCO2/kWh or twice that of a coal powered power plant (CGDEV report). (But that harm alone is not enough to get people to stop using them, not to mention the subsidies, so let’s put those aside for now.)

The OPEX cost of generators is high, not just from the fuel perspective but also the outages themselves; the cost of lost sales, lost productivity, increased cost of goods and lost efficiency to the bottom line. “Unreliable power leads to disruptions in production, loss of perishable goods, damage to sensitive equipment and loss of orders” (Oshikoya et al, 2001 in Clute Institute report). This can result in up to 20% loss of annual sales in some countries or put the cost of a power outage in the range of $0.94 to $3.13 per kWh of lost electricity. The table below gives the example of Nigeria and Sub Saharan average.

blog-chart-diesel-Nigeria-renewables

So folks turn to diesel generators because of their low CAPEX cost to supplement the power outages, but this can be “five times the price of electricity purchased from the public grid and can be as much as ten times more in Malawi, South Africa, and Zambia” according to a world bank report.

A better solution is needed for commercial businesses and entrepreneurial dreams in Africa. By introducing alternative or renewable energy solutions like solar PV, biomass gasification or hydro power together with diesel generators to form solar-diesel hybrid systems, these can be an affordable, flexible solution to keep businesses up and running, maximizing profits as well as reduce harmful CO2 emissions and possibly phasing out diesel for good by increasing renewable capacity from operational savings with time. A solar hybrid diesel system for example, knows whether to draw on battery or fuel power and the controller determines the most efficient way of using energy generated by the solar panels and diesel generator.

The best part is that unlike diesel generators which are not only eating into profits but also harming the environment, a solar-diesel hybrid system can bring greener and more reliable energy to small businesses in the developing nation in order to stimulate entrepreneurial activity, growth and GDP. We urge businesses to take a serious look at this problem and the possible solutions, because amidst the dirty air, one thing is clear; diesel generators are not the answer to an unreliable grid if you want to have a profitable business and a prosperous and healthy nation.

vivian vendeirinho

1 Comment

  • Wesonga MartinJanuary 19, 2015 at 16:58

    Diesel Generators are a CANCER eating up commercial businesses and Africa’s entrepreneurial exponent factor. The high operating cost of running these generators lives business owners spreading these high costs to the final consumers to remain solvent and try to break-even.

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