EGG-energy is a for-profit social enterprise, targeting the off-grid market in Tanzania to provide a battery subscription service. As they put it, EGG-energy is the “netflix” of power.
86% of the population in Tanzania is not connected to the grid. Ironically, of those 35 millions without electricity, 80% live within 5km of the grid. EGG-energy’s netflix model bridges that gap.
What’s so special about getting electricity from the grid? Basically, for those not connected to the grid, a typical household spends about $165 per year on kerosene for lighting, disposable batteries for radio and mobile phone charging services. That adds up to more than 10% of the household’s income. Let’s say you make $50,000 per year. Could you imagine spending over $400 per month on electricity? The more I learn about these rural areas with less developed infrastructure, the more I realize how expensive it is to be poor (as the CEO Jamie Yang put it nicely).
With EGG-energy’s battery service, the customer can either pay a lower annual subscription fee and then a small fee each time he/she swaps a depleted battery, or, pay a higher subscription fee and get free unlimited swapping (which customers appear to prefer).
When we say batteries, we’re not talking AA. We’re talking about a solid brick-size battery that will last 5 nights and power a household’s lighting, radios, and phone charging. Robust enough to power your house or small business – light enough to carry with one hand and exchange on a weekly basis.
EGG-energy offers its customers comprehensive electricity services at a much lower price than current expenditures. Moreover, by replacing kerosene and wasteful disposable batteries, this battery netflix model not only expands access to electricity, but provides a cleaner and more efficient solution.
As of April 2011, EGG-energy has two charging stations (via grid connection) in Chanika and Mbagala, both on the outskirts of Dar es Salaam. EGG-energy also partners with “contracted distributors”, existing store owners who agree to swap EGG batteries in addition to normal activities in order to earn more revenue. Each charging site has five associated distribution sites, allowing end-user customers to easily access the batteries even at far distances from the charging sites. EGG-energy also started a solar pilot in Msanga (a rural village 100km from Dar es Salaam) and is working with an Iringa entrepreneur (5ookm from Dar es Salaam) to set up an on-grid franchise in the village.
This model is fantastic and obviously addresses the similar challenge of energy poverty that EarthSpark is addressing in Haiti. EarthSpark’s current equivalent solution to EGG-energy’s battery model is distributing Barefoot Power’s 15W Solar Home System to the off-grid market in Haiti.
The solar home system includes a similar battery to the one EGG-energy distributes. However, instead of charging the battery remotely, the battery is charged directly at the house with the 15W solar panel provided in the solar home kit. The added advantage of this sort of system is that the customer is autonomous and the battery is charged directly at his or her house. But I imagine this advantage most likely comes at an added cost as compared to the EGG-energy solution.
In any case, the EGG-energy model is an exciting solution to providing cheaper and cleaner electricity to the off-grid market in Tanzania.
My only question – is if households in Tanzania are so close to existing grid infrastructure, why not just extend the grid or make “micro-grids”? Is this too cost-prohibitive?
Update (Nov 2):
EGG-Energy’s Blandine Antoine responded to my question with the following:
“Upfront capital expenditure is much higher; since government will not pay for it, end-customers would have to; upfront costs would be in the several thousands of dollars to get the lines to a single house.”
‘Nuff said. Great work, EGG-Energy!