Published on July 25th, 2020 |
by Winter Wilson
July 25th, 2020 by Winter Wilson
When taking in patients for COVID-19, hospitals need ventilators. They need refrigeration for blood tests and potentially future vaccines. They need lights and monitors and running water and efficient communication. What powers it all? Electricity.
“The COVID-19 pandemic has highlighted the deep inequalities around the world in terms of access to modern, affordable and sustainable energy,” said Dr. Fatih Birol, Executive Director of the International Energy Agency, in a May 2020 World Bank press release. “Electricity has been a vital underpinning of the response to the public health emergency in many countries – but hundreds of millions of people worldwide still lack basic access to it, with the majority of them in Sub-Saharan Africa.”
According to the press release, “the number of people without access to electricity declined from 1.2 billion in 2010 to 789 million in 2018, However, under policies that were either in place or planned before the start of the COVID-19 crisis, an estimated 620 million people would still lack access in 2030, 85% of them in Sub-Saharan Africa.”
According to the Associated Press, as of July 2020, Africa’s confirmed COVID-19 cases surpassed half a million. It has become clear that energy access and reliability intersects with current and future challenges presented by COVID-19. So how are distributed solar companies responding to the COVID-19 crisis?
“Short answer? It changed everything,” said Bill Lenihan, CEO of ZOLA Electric.
ZOLA Electric: Finding a Solution in Solar
ZOLA Electric is one of many distributed solar companies thinking about what COVID-19 means for their business and how solar can be deployed to help combat the pandemic. Lenihan has been with the company for a little over five years, seeing it grow from operating in half of Tanzania solving rural off-grid energy access to where it is now. It recently opened in its fifth country, providing power to more than one million people.
With now close to 1500 employees, ZOLA has been branching out from basic power necessities in rural regions to addressing myriad challenges on the energy ladder, including residential and commercial solar.
“The mission of the company has always been the same and that’s clean 24 hour power anywhere,” said Lenihan.
But the mission of the company today has a very different significance than it did in January before COVID-19 became a global health pandemic. From Lenihan’s point of view, ZOLA’s drive to improve reliable energy access has become more critical in the fight against this global health challenge.
“Over the last few months, we’ve mobilized this business to get energy to the front lines to provide energy for essential services to fight COVID, whether it’s distancing, clinics, food distribution, or work from home systems,” said Lenihan. As he explained, ZOLA primarily has focused on two big changes.
First, the company planned to address citizens’ needs of power so that they would be able to work from home. This meant having the power for basic necessities for tools like lights, mobile phones and laptops. The second priority for ZOLA has been pulling together offerings to address the healthcare and food distribution needs.
“It’s ‘okay I’ve got a clinic, it’s going to help fight COVID, it needs five ventilators, it needs some level of refrigeration for medicine.’” said Lenihan. “What is required to power that 24 hours a day so it never goes down?”
Riccardo Puliti, Global Director for Energy and Extractive Industries and Regional Director for Infrastructure in Africa at the World Bank, explained in an article that energy services are critical in fighting the pandemic, from powering healthcare facilities to enabling communications that connect people while social distancing. He found, however, that “only 28% of healthcare facilities benefit from reliable electricity, and only 43% of the population is electrified at all.” That is why ZOLA has committed to powering 1,000 clinics in five to ten countries. Lenihan explained that ZOLA is exploring ways in which they provision one system for an individual who gets COVID-19, including a ventilator, an oxygen machine, refrigeration and lights.
“The commercial side of this business or the enablement side of this business has really rotated again towards essential service,” said Lenihan. “Toward what needs to be powered right now to fight COVID-19 and that’s how we are trying to help.”
Partnering with companies that are already connected to local communities has allowed for ZOLA to tackle many more problems than it would have been able to alone. The biggest challenge, said Lenihan, has been executing in a period of volatility and uncertainty. But he does believe there is hope.
“I believe strongly that this experience as it relates to what we do, I think it’s going to put a fine point and an exclamation point in some ways on the importance of distributed, renewable energy because the grid is a failure in these countries,” said Lenihan. “It’s even more of a failure in a crisis. So it’s teaching people that we have to do things differently, and it’s teaching people that energy independence is incredibly valuable.”
Exploring Energy Challenges in Nigeria
Take Nigeria, for example. That is where Chief Commercial Officer Doye Ogionwo works on sales and go-to-market strategy for ZOLA. Nigeria faces some specific challenges, especially related to its dependency on crude oil. As a McKinsey & Company report explained, oil-exporting companies are facing challenges with COVID-19 that are “compounded by the collapse of the oil price.”
“Oil prices have dropped significantly and therefore the country’s revenues have dropped,” said Ogionwo. “And now with that happening, the government doesn’t have as much money as per the budget so there have been budget cuts and that has impacted the people and the ability of the government to do certain things.”
This, according to Ogionwo, results in a recession, which places even more strain on Nigeria. As the McKinsey & Company report found, Nigeria’s likely economic contraction in the least worst-case scenario could mean a GDP growth decline of nearly six percentage points in 2020. This means a reduction in GDP of nearly $20 billion, largely due to oil-price effects.
Being from Nigeria, Ogionwo was drawn to ZOLA because of its product lines that cover the entire energy ladder from the rural off-grid market and more developed markets in Africa. ZOLA’s mission includes “offering a full energy ladder that can scale to solve any energy problem.” Its newest innovation, the Zola Infinity, is an integrated power system that provides more reliable 24-hour AC power to consumers through a combination of lithium-ion batteries and solar panels, using the grid as a backup.
But while ZOLA has been pioneering innovation in its latest solar developments, COVID-19 presents a number of energy-related challenges for consumers in its markets, making their technology more critical.
“COVID-19, speaking as an African who resides in Africa, is scary for all of us,” said Doye. “For the world, totally, but in Africa as well for two reasons. One, the medical infrastructure is not as developed as it is in the more developed countries, but also the social infrastructure of the social safety net is not as developed.”
While most countries have instituted a lockdown in order to flatten the curve, Ogionwo explains that a lockdown is only successful when people do not have to worry about feeding themselves.
“In the US you get $1200 checks from the government,” said Ogionwo. “In Europe there are social palliatives in place to help people while they’re not able to work. In Africa, those palliatives are not as sufficient and two, there’s also difficulty naturally distributing these palliatives to people.”
So where does renewable energy come in? While COVID-19 has affected ZOLA’s supply chains along with many others in the industry, Ogionwo said that his company has actually seen an increased demand in its products. One of the initiatives that ZOLA is putting more energy into is providing energy to primary healthcare centers so that they are able to best run blood tests, test samples, and collect important information for things such as contact tracing in a time of COVID-19, he said.
“But in order to power one of these clinics or primary healthcare centers, you need energy,” said Ogionwo. “Typically these standard primary health clinics need lighting, they need to have refrigeration for blood samples and vaccines, they need to have power sterilization autoclave, they need to have a microscope, they need to have a hematology machine. All of these require power.”
Right now, Ogionwo said, ZOLA is working with partners to roll out energy solutions to power clinics in seven different countries in Sub-Saharan Africa. But, as Ogionwo explained, healthcare is not the only sector in need of easy and reliable power access. Businesses are also being forced to adapt as they try to provide avenues for employees to work from home.
In his World Bank article, Riccardo Puliti explained that COVID-19 is anticipated to cause supply and demand shocks that will put pressure on existing energy systems and worsen economic conditions, especially for low-income communities. Companies in particular face insolvency when electricity is vital but inaccessible financially, he noted.
“A lot of companies, they need continued business productivity, so they need the ability for their employees to work from home,” said Ogionwo. “And so we’ve actually come up with a solution that’s minimally invasive. We’ve taken our product line and we’ve adjusted it so we can deliver a DC system to you. We don’t have to enter your house, we can install the panel outside on the roof so there’s no interaction with the customer.”
While those are the main areas ZOLA has focused on, Ogionwo also explained that different industries need different means of getting reliable power, and people sitting at home now need different things like lights, TV, radio, fan, etc., so that being indoors is not as unbearable.
But the opportunity in energy expansion comes with significant challenges. For example, one of the biggest challenges Ogionwo explained is being able to get the products in the hands of people, both in terms of delivery and installation. Ogionwo explained that ZOLA, however, has received a significant amount of support from the Nigerian government to get essential service clearance that allows them to continue to safely deploy systems and expand energy access in their targeted markets.
But Ogionwo is hopeful. ZOLA has seen an uptick in demand in virtually all of its markets. In order to adapt to what he calls “the new normal,” the communities ZOLA serves will need more reliable power.
“As people look for alternative means of power and we’re there to meet those needs, we’ve seen the demand grow,” said Doye. “So we feel pretty confident about that and excited about the future.
In the World Bank’s May 2020 press release, Riccardo Puliti said: “Access to reliable energy is a lifeline, especially in the context of the COVID-19 crisis. It is essential not only for preventing and addressing the pandemic but also for accelerating the recovery and building back better by securing a more sustainable and resilient future for all.”
A Universal Hope: Building Back Better after COVID-19
Bill Lenihan has no shortage of challenges ahead of him, but he is hopeful that ZOLA can make a difference in a larger push to deploy renewable energy around the world.
“It’s important to remember how universal this theme is,” he said. “It’s not a specific need, just rural off grid or just clinics, this is a universal need in these markets and so the problem isn’t limited to a certain niche, it’s everybody.”
The need is not limited, he said. And renewable energy has never been more critical than it is right now.
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