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  • 27 Dec 2016
    When going into the real estate business, or even constructing your own house in Africa, it would be recommendable to go off-grid. This is because there is an alternative source of energy that is not only friendly to the environment but also pocket-friendly. Solar is becoming cheaper by the day and it is particularly cheaper in Africa as the continent is among the sunniest in the world. This has been driven by the reducing cost of solar PV modules as shown above. Looking at the brief analysis below, you can see how cheap solar is getting. The illustration above shows that the price of solar is below 6 dollar cents per kilowatt-hour (kWh) anywhere in Africa as the continent is within the solar belt. Remember too that the pricing is unsubsidized. That cost is even lower than what most people currently pay for electricity in countries all over Africa. To put this into perspective, a report released by African Development Bank indicated that the average cost of electricity in Africa was US $0.14 per kWh against a production cost of US $0.18 per kWh in 2010. The situation hasn’t changed much for my country Kenya as the average cost of electricity for the low consumers is currently about US $0.14 per kWh with most average to high consumers paying about US $0.19 per kWh. That cost is expensive compared to solar and doesn’t take into consideration externalities such as environmental impacts from the use of fossil fuel to generate electricity. Energy Storage.. There is no concern with regards to ensuring a 24-hour supply of electricity as a result of declining cost and continuous improvement of energy storage technologies. Companies such as Tesla hope to produce batteries of $100 per kWh by 2020. There are also other companies undertaking numerous research and development on energy storage aiming to lower the price even further. For this reason, it is practical to establish a real estate business or even construct/convert a home to be purely based on solar energy in Africa. The savings will be enormous from a clean and reliable source of energy. Prospects for savings… Let’s assume you are in Kenya and its 2020 already, the cost of solar averages US $0.045 per kWh while the electricity from the grid remains at US $0.19 per kWh for most middle-class consumers. Let’s also assume a consumption of about 300 kWh every month.  The savings from using solar will be about US $522 in a year. The savings for a about 5 years will be able to purchase a solar energy system, including energy storage, that will provide free electricity for at least 25 years more. I hope we see the sense and embrace solar as a dependable energy source. In fact, there is no need to wait until 2020, make 2017 a year for savings on electricity as well as the environment by adopting solar energy.
    1298 Posted by Eric Akumu
  • 04 Jun 2016
    After my first blog, I went and did more research based on the feedback I got from readers. One thing that came out is that most were skeptical on the possibility of EVs – electric cars – taking over the mobility industry. I do not want to convince you; I just want you to reason with me. I have a lot to share with regards to electromobility; this is because I view EVs as part of disruptive technologies that will change our current ‘normal’ in the near future. Recently I followed through videos of the Swedbank Nordic Energy Summit in Oslo, Norway, that was held on March this year. I was particularly captivated by one Tony Seba’s Keynote presentation on Clean Disruption. He expounded clearly on disruptive technologies and how they will affect energy and transportation in the near future. He also pointed out that the experts often get it wrong as they give predictions that are later made obsolete by disruptive technologies. I believe you have come across some of infamous quotes made by renowned people that were later disapproved. Check out some of the ‘Expert’ Disruption Forecasts: “The internet will catastrophically collapse in 1996.” Robert Metcalfe, 1995  “There is no reason anyone would want a computer in their home.” Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977 "I think there is a world market for maybe five computers." -- Thomas Watson, chairman of IBM, 1943. “The horse is here to stay but the automobile is only a novelty – a fad.” — President of the Michigan Savings Bank advising Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Company, 1903. "The Americans have need of the telephone, but we do not. We have plenty of messenger boys." -- Sir William Preece, chief engineer of the British Post Office, 1876. You notice that it’s usually the ‘experts’ and ‘insiders’ who dismiss Disruptive Opportunities. Take this elaborate example. In the mid-1980s, AT&T hired McKinsey & Co to forecast cell phone adoption by the year 2000. Their prediction was 900,000. The low number made AT&T believe their landline business would prosper, therefore, ignored entering the mobile phone business. However, it was off by a whopping 120 times. The actual number in the year 2000 was 109 million. This means that AT&T missed out on multi-trillion-dollar opportunity by ignoring cell phone business.   I wonder why smart people are the ones that consistently fail to anticipate or lead market disruption. Disruption has occurred in the past, and it is in the course of happening now. Recently, the entry of smartphone not only affected the mobile phone industry such as kicking Nokia and the like out of the market, but is currently affecting the banking, marketing, and several other sectors. Although smartphones were expensive compared to the mainstream, its superior nature made it attractive to the market. The technology cost curve then decreased making it the preferred gadget over other phones. Let’s look at Uber; a technology that is currently leading a market disruption that is likely to affect the concept of car ownership globally. Its taking a bottom-up approach and the smartphone is essential in assisting in the disruption. Compared to taxis, Uber is cheaper, better, faster, and customizable. That is the reason it has been able to spread faster globally even though it is based on a rather simple business model. It hit the industry so hard to an extent that taxi business owners in some parts of the world protested bitterly. The main contention when it comes to EVs is the energy storage and the mileage after charge. There are several battery mega factories that are coming up such as Tesla and BYD. Besides reduced costs, the energy storage density will also improve. It is very similar to the evolution of the smartphones; within a short-time, several other companies came on board driving the prices down while at the same time, improving the technology. One may argue that it is not right to compare disruption in the car industry to that of the mobile phones. But we have never experienced the dominance of electric cars on our roads. One thing I admire is the exponential growth of technologies that support the EV industry.  Besides energy storage, there are advancement towards autonomous driving that many are still skeptical about. There are ongoing trials in most parts of the developed world with Germany, Spain and the Netherlands allowing testing robotic cars in traffic. In addition, cities in France, Belgium, Italy and the UK planning to operate transport systems for driverless cars. I was surprised to find out that the cost of producing the sensor needed to facilitate autonomous driving dropped from $70,000 in 2012 to $250 in 2016. It’s difficult to explain such drastic drop in prices. I look at it as a result of amalgamation of different improving technologies that make the final product better but cheap. The same case applies to EVs, by 2019, several companies hope to produce cars selling for $20,000 with shorter time for charging and longer mileage. I guess I have written much about EVs already. Although predicting the future is not easy, I hope looking at disruptive technologies in general has given you a picture of what is bound to happen.  Please note that Stone Age did not end due to lack of rocks, but because disruptive technology led to Bronze Age. Currently, the world is used to a centralized, extraction-resource-based energy sources such as oil, gas, coal, and nuclear. However, such will be disrupted by superior technologies that have better business models. With regards to EVs, TESLA Model S was chosen as the best car ever by the American consumers in 2013. It is currently the best-selling high-end large luxury car beating leaders such as Rolls-Royce, BMW, Audi and Chevy Equinox. Looking into the future, if the business model adopted by Uber and the autonomous driving of EVs become part of our future, there will be no need to own a car, and therefore need for parking spaces as vehicles will be in constant motion unless charging.
    1076 Posted by Eric Akumu
  • 31 May 2016
    I have thought about starting my own blog on COP for a while now. However, I have remained adamantly ‘lazy’ resulting in the decision to start dragging for some time now. It only took the realization that I was losing some of my ‘soft skills’, therefore, urgently needed to do something. I am particularly thrilled with what is happening in the technological field especially on electromobility. I believe the technology is not mature as for now, but a lot of R&D is ongoing that will see it viable and cheap in the next few years. Most technologies in their early years were expensive and deemed as luxury for the rich. But after more research, they ended up being cheap and of even better quality that the initial products. It is essential to look into the path taken by these technologies and relate it with the developments made in electromobility. Take the case of smartphones. Did you know that development of smartphones started way back in the early 1990s? Yes, several companies tried their hands on developing a combined telephone and computer. One of the flagship devices was Apple’s tablet Apple Newton PDA or MessagePad that had handwriting recognition. After being launched in 1993 at a retail price of $700, the end users complained that it had inaccurate handwriting. The high price also meant only a few hundred thousand units were sold before it was removed from the market in 1998. However, a breakthrough was made by the same company through introduction of the iPad. Apart from Apple, Nokia tried its hand on smartphone and launched Nokia Communicator in 1996. The NOKIA 9000 Communicator was considered a convenient device because of combined phone and computer. It had 8MB of memory and 33MHz processor. The screen was black and white LCD with a ‘high resolution’ of 640 × 200 pixel – was the best at the time. Imagine those specifications and you had to part with $800 to have that device. Now that everyone loves selfies, I am obliged to check out the evolution of the digital camera before I move back to the issue of electromobility. You will be surprised that Logitech, not Nikon or Canon, made the first digital camera. Their flagship, Logitech Fotoman, retailed at $980 in 1993! And the specifications were ridiculous compared to what we have in the market today; 1MB of internal memory holding 32 shots only at a resolution of 320 × 240 pixel. Was there anything special? Yes, you could ‘save’ money on developing photos. However, you could not preview the photos without connecting to your computer. Looking at all those and many more technologies, you will agree with me that we have not yet seen the best in electric cars. Traditional car companies have continuously aimed at perfecting the internal combustion engine. However, the need to go green is pushing them out of their comfort zone. We do not know what will come of it, but I have no doubt that electromobility will overcome the present challenges in the near future. When it happens, do not be surprised to see more electric vehicles on the roads even in your village in Africa than those using fuel. The G7 countries have set 2025 as the year subsidies on fossil fuel will be fully eliminated. Looking closely at the trend, more companies are also coming up in a bid to outdo the traditional car manufacturing companies with regards to development of electric cars. When the technology becomes mature, we will only look back and laugh at the flaws and the high price tag attached to the present electric cars. I also believe the rate of development is faster now than it was before super computers. Who thought that a smartphone sold for $980 in 1996 would have improved features to those we have in the market today at lower prices? For electric cars, we haven’t even started yet.  I hope you will one day drive me in your super car sometimes in the near future.
    913 Posted by Eric Akumu
  • 23 Sep 2016
    This week PAUWES is welcoming its third lot of students to pursue the various masters programs. Apparently, it is the largest group compared to the previous admissions. Even though I have not met the students in person, I take this rare opportunity to congratulate all of them for making it to the great Pan African University. I hope they are as excited as I was when I entered this lively, challenging and warm community one year ago. My first year has taught me that I made an excellent choice. I wish to convey my wishes to the first years directly as I have spotted some of them in COP (Community of Practice). I also wish to inform those that have used nicknames or even PAUWES as their names to edit their profile accordingly. This is because the platform is very critical for networking not only among PAUWES students, but also with organizations, intellectuals, and potential employers/partners. So I urge that you take it seriously and inform other students to join. I believe the intellectual adventure you will undertake under PAUWES will have profound impact in your life. It is thanks to your efforts that you have been able to create an education that is right for you. I also understand that making a choice is never easy. The choice you have made will stretch and shape your mind to the person you will become. In addition, studies in PAUWES offers a rich variety of intellectual opportunities by exposing students to new ideas and alternative ways of thinking. This is because students are coming from various parts of Africa while lecturers from all parts of the world. I like using a few demonstrations here and there in order to drive the point home. Persons that have read wide may have come across Stephen Covey, the author of many inspirational books including 7 Habits of Highly Effective People. He once said “The greatest risk is the risk of riskless living.”.  Thinking through that quote and analyzing the cause of human success, you realize that it is impossible to succeed without making decisions. It is also interesting to note that all the decisions made involve some level of risk. As a business person would say, a high risk decision often leads to more returns compared to low-risk decisions. Unfortunately, failure becomes nearly inevitable especially on high risk decisions. However, it is essential to ensure that the risk you take, if you fail to achieve the desired goals, you will only fall forward. Now I know you are wondering what I mean by all that. Falling forward simply means that you are more aware of your situation, and in a better position to succeed compared to your past worst moments. Now, what do you think of your chances as first years in PAUWES? For me, I believe PAUWES offers you a low risk opportunity with high returns. Nobody can offer your such an opportunity anywhere in the world. For this reason, I ask of you to get the best out of PAUWES. All the best!!
    873 Posted by Eric Akumu
851 views Nov 14, 2016
Building Africa… Opportunity for Energy and Water Experts

Recently I came across a report by PWC on the future of Africa with regard to the development of the real estate markets. The report, released in March 2015, predicts the developments in the real estate industry up to 2020. It is undeniably true that Africa has been lagging behind in terms of developing its real estate market. However, the projections given by the report are enticing in terms of the opportunities that exist for those that look into venturing into real estate business. For those already in the business, just know that “impact of global megatrends on Africa will be huge”. I couldn’t stress it more thanks to that phrase I got in the first page of the PWC report. The rapid urbanization that will be witnessed throughout the continent is critical, not only to the traditional investors in the real estate market, but also new entrants such as energy and water experts. It is becoming increasingly important to incorporate such experts as issues of climate change is pushing the market towards green building.

As illustrated by the PwC analysis, the growth in the real estate is projected at 3.7% annually for the entire African continent between 2012 and 2020. In addition, the report states that cities globally contribute about 70% of “energy-related greenhouse gases while occupying just 2% of the land”. This shows the significance of incorporating technology in the real estate economics. The predictions also show that the inclusion of technology will eventually disrupt the entire sector changing the approach towards real state development.

Take a closer look at some of the cities and the projected growth.

Source: PwC report- Real estate: Building the future of Africa

Any expert in the fields of energy and water will marvel at the prospects. The need for green building in terms of energy and water usage will surge with technology taking center stage. Do not forget that Africa still struggles in terms of electricity and water access. In order to play a leading role in the development, it is essential to find how to fit into the bigger picture by expanding our horizon. For instance, we can find out what is already happening in our individual countries or regions. The PwC reports projects that most investors will seek local partnership as necessitated by government policies and legislation. We should be part of the drivers for real estate growth in Africa through collaboration with government and other investors.