What is “Bear” in Swahili?

The answer is Team Kubeba.

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Last month, BERC members Adrian Gomez, Gerardo Ruiz de Teresa, Molly Starke, Shaila Narang, and Victor Pucci represented UC Berkeley at the inaugural Energy in Emerging Markets Case Competition at Duke University in Durham, NC. The competition centered on Powerhive (www.powerhive.com), a Berkeley-based energy company seeking to deploy microgrids in Sub-Saharan Africa for rural electrification. The case, which was comprised of historical and hypothetical scenarios, asked participating teams to develop a cost-effective operational strategy considering ideal initial customer mix and geography, energy generation and storage options, and funding options. The teams had one week from the case release date to develop the strategy, pro forma financial statements, and a financial model that were then presented to Powerhive founder Chris Hornor, former Duke Energy CEO Jim Rogers, and a board of judges from venture capital, academia, energy engineering, and business consulting fields.

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While the Powerhive case had many unique elements, particularly in terms of finance, it also offered lessons for energy access in the developing world. The deployment of microgrids for rural electrification has grown dramatically over the past few years with political and financial support from governmental and intergovernmental institutions like USAID’s Power Africa and the World Bank’s Rural Electrification Program. The case competition raised a number of key concerns impacting rural electrification programs like the selection of high potential addressable markets and the determination of appropriate price points. There are an estimated 1.3 billion people worldwide with no access to electricity, with an additional billion with limited or intermittent access. The addressable market for rural electrification programs is staggering, but also very challenging. There is tremendous uncertainty around customers’ willingness (and ability) to pay, high risk of vandalism and rent seeking, and logistical difficulty of installing and managing the microgrids. The case competition challenged participants to consider all of these factors in their comprehensive strategy.

The exercise was a great learning experience for the Berkeley team — which only barely made it in time due to a freak snowstorm in North Carolina. While they did not win the competition, they came away with valuable lessons about the on-the-ground reality and challenges of rural electrification initiatives. The competition also allowed for the opportunity to make new connections in the energy space – from Duke Power to Cummins Energy.