Business, renewables and rural development

I recently came across a report that found UK businesses were increasingly investing in onsite renewable energy generation. The number of onsite generation projects developed by UK businesses increased by 53% in 2012, and with the majority of these using wind and solar technology.

In recent years the costs of renewable technologies like wind and solar have fallen considerably, whilst the annual average price of gas and electricity has dramatically increased since 2002 for non-domestic customers: gas by 121% and electricity by 93% (p.30). Together this has contributed to the current trend of businesses taking up onsite renewable generation.

©SolarSister

Beyond this, many companies are now taking steps to own or acquire renewable energy directly at source. Ikea recently bought a 46MW wind farm in Canada, just three months after acquiring a 7.6MW wind farm in Ireland as part of its ongoing efforts to achieve energy independence by 2020. The company has also begun offering ‘off-the-shelf’ solar power packages to UK consumers, helping bring domestic solar installation to the mainstream.

Google is another company making global efforts to secure a direct supply of renewable energy. It has just signed a power purchase agreement to acquire all the electricity produced by a new 240MW wind farm in Texas and is now making its first renewable energy investment in Africa. 

Google has long been a global leader in advocating renewable technology, but this recent investment in a 96MW solar power plant in South Africa is especially admirable. South Africa is nearing grid parity and the country needs to invest in greater electricity supply capacity as it currently suffers from an unreliable, inadequate electricity system (Winkler, 2007). Only 55% of the rural population had access to electricity in 2009 according to IEA data, as outlined in this report from the US Energy Information Administration. Google’s project, which will be one of the largest solar PV installations on the African continent, plans to help address this by delivering a supply of renewable energy to over 30,000 South African homes. The project will create jobs for rural people in the Northern Cape area and has also committed to providing rural development programmes that focus on education, skills and technology transfer, enabling transformative social and economic development. 

©Google

The installation of renewable energy systems has long been association with job creation and economic development, and there is a need for more businesses, small and large, to be investing in renewables in rural areas (Akella et al., 2009). To maximise this form of economic development there needs to be greater transfer of technical knowledge and skills, greater support of rural households and entrepreneurs participating, more awareness of the social benefits of renewable installations, effective and replicable business models, appropriate subsidies put in place where needed and greater infrastructural support generally for accessing renewable resources, especially in Africa (Martinot et al., 2002; Bugaje, 2006). If these are established, the (potential) success of Google in the future can be replicated across the African continent and in rural areas over the world.