By Kwame Som-Pimpong May 3, 2012 2 Comments

As major cities on the African continent continue to experience rapid urbanization, electricity demand response will be an increasingly important topic power distributors will have to address in meeting population growth that outpaces grid capacity. Eskom, the largest electricity provider on the African continent, reached out to Norcross, Georgia-based Comverge to help tackle this increasingly important challenge in South Africa.

 

Through a $25 million contract, Comverge will provide Eskom demand response capabilities in two ways. Comverge is serving as an aggregator, deploying the company’s IntelliSOURCEtm technology which will manage 500MW of electricity. The company is also leveraging Eskom’s balance sheet and installing meter equipment that will enable Comverge to deliver 100MW out of the total 500MW.

 

David Ellis, Comverge’s Director of International Projects, stated that the company has interest in the rest of the African continent. His team is looking at meter providers that serve 27 countries on the continent.

 

Countries across the African continent are taking aggressive steps to increase their power production. Kenya plans for geothermal energy to comprise 5,000MW of the 15,000MW of electricity it plans to generate by 2030. Nigeria recently signed an MOU with GE which will partner with local firms to generate 10,000MW of electricity in the country. Comverge working with Eskom is a strong move considering that the company providing generates 95 percent of electricity in South Africa and 45 percent of electricity on the African continent.

 

Demand response technology use is growing globally, with emerging markets taking the lead. Pike Research predicts that demand response technology uptake will grow at a compounded rate of 37 percent between 2010 and 2016. Compounded growth in emerging markets will range between 42 and 50 percent. It will be interesting to see how much of this growth Comverge can capture. Peak Merger Corporation, a subsidiary of H.I.G. Capital is in the process of acquiring Comverge for about $49 million in equity value. Hopefully, expanding Comverge’s technology on a global scale remains a part of Comverge’s business model.

 

The future looks bright for Georgia’s economic engagement with African countries. The Comverge deal is a shining example. The Gwinnett Chamber of Commerce, which represents business interests in the county that houses Comverge, has taken an international approach to economic development through its Partnership Gwinnett initiative. Most of this international engagement has been with European and Asian countries, though Nick Masino, Vice President for Economic Development and head of Partnership Gwinnett at the chamber has expressed interest in engaging business on the African continent.

 

This interest is not isolated to the Gwinnett Chamber. The French American Chamber of Commerce in Atlanta recently hosted a conference that focused on different aspects of engagement with African countries. Kenyan Prime Minister Raila Odinga visited Atlanta, as did a high level representative from the United Nations to discuss economic development on the continent. A delegation from South Africa’s Gauteng Province was in Atlanta to explore potential business partnerships late last month, and the list goes on. The Comverge-Eskom deal looks to be just the tip of the iceberg.

 

Editor’s Note: This post has been updated

About

Kwame Som-Pimpong is Co-Founder of Afara Global LLC. He drives the development of Afara Global’s products, enabling localities and small firms to connect to opportunities on the African continent.

Comments:
  1. This is a great article and it’s fantastic to see African utility firms forming partnerships with foreign companies (rather than African governments simply outsourcing to them).

    Eskom is fairly progressive (as well as huge) player when it comes to electricity in Africa. They connected 2 million rural households to the grid in the ten years following apartheid (approx twice as many as Roosevelt’s Rural Electrification Act), so if there’s anyone who can make this work, it’s probably them.

    I look forward to seeing how things are implemented!

  2. Thanks for the comment, Femi. H.I.G Capital recently completed its acquisition of Comverge, something that I think will play a big role in whether the company maintains an effort to take the company’s business global. Hopefully, this pilot proves a huge success.

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