Trinity Morphy recently caught up with Ifeanyi Christwin, founder of Switch Electric and M3tering Protocol. In this two-part of the interview, they discuss clean electricity in Sub-Saharan Africa, bridging the supply gap with decentralisation, and ReFi's role in scaling these solutions.

Trinity: It's an honour and a pleasure to meet the man behind Switch Electric and M3tering Protocol. Can you start by giving us a bit of background on yourself, where you're from, and how you got into the electricity industry?

Christwin: I began thinking about entering the electricity industry in 2020. I was working on my first startup idea: a fintech payment solution. During the lockdown, issues in the transmission grid caused a nationwide blackout.

I could see my productivity drop to zero, as did my teammates. That made me question the idea of being an entrepreneur to solve e-commerce when power is still an unsolved problem in Nigeria. I started to see the need to prioritise solving the electricity issue rather than developing the next e-commerce application.

I initiated a discussion with my teammates. We were determined to pivot our focus towards creating an electricity solution much more resilient to nationwide blackouts. The thing of importance here is that a single point of failure in the transmission grid had caused the blackout. This was unacceptable.

As I delved into the research, I discovered a world of electricity alternatives and innovative solutions. Sun Run, a U.S. business that provides solar as a service, stood out to me and inspired our new direction.

The model of Sun Run was a solar utility company that would set up solar power systems for homes to generate the electricity the home would consume. This model removed the need to distribute and transmit electricity from the grid, eradicating any "single point failure affects all" scenario. If the solar panels remain on the rooftop generating electricity, electricity supply to the home is guaranteed. This made much sense to me, and we decided to replicate this model. And so, Switch Electric kicked off.

Trinity: What was your initial experience with Switch Electric and the Sun Run model?

Christwin: After installing a solar power system for our first-ever customer, we quickly realised two significant problems.

First, we were estimating how much electricity the customer consumed every month and sending them a fixed bill for that electricity. This incentivised them to use as much power as possible, put a lot of strain on the solar infrastructure, and incurred heavy maintenance costs.

The second issue was bill collection. Because we were doing it manually, there was no guarantee that we would get the payment when it was due. While building this alpha model, we didn't think to include components in the system to easily discourage late payments. So, we paused to fix these problems by developing an intelligent metering device that would measure the amount of electricity used and bill the customer accordingly using a prepaid payment structure.

Over the next two to three years, we dedicated ourselves to developing prototype versions of the smart metering. This marked a significant turning point for Switch Electric, as we embraced a new, hardware- and metering-focused identity.

Trinity: Could you explain what you’re trying to achieve at Switch Electric and M3tering Protocol? Despite their interconnected goals of advancing clean electricity solutions, the two companies have a distinct separation. Why is that?

Christwin: Initially, it was a singular initiative: to offer solar power as a service, an alternative to grid usage. We aimed to establish a solar service company that mirrors the customer base model of electricity companies in Nigeria. So, from the perspective of what we are doing initially, everything depended 100% on Switch Electric: the entire service, connectivity, backend infrastructure, and the hardware metres.

In other words, a single point of failure. If, for some reason, our website was down, all the intelligent metres we produce would go offline, and it would have the same effect as the entire transmission grid going down. Recognising the need for decentralised infrastructure, we extensively researched how to proceed. During this exploration, we came across the idea of creating the framework as a Web3 initiative. We engaged with the business development team at IoTeX, discussing the potential of using IoT devices on-chain to create a more resilient architecture for our project.

This prompted the separation of M3tering Protocol and Switch Electric. Switch Electric transitioned into a hardware company focusing on developing smart metres and the infrastructure supporting the entire electricity system. M3tering Protocol, a product without a specific owner, became the electricity-infrastructure-as-a-service on the blockchain. Switch Electric continues contributing to the protocol as a hardware developer in this new setup.

Trinity: Sub-Saharan Africa faces a significant challenge in expanding access to clean electricity. What do you see as the biggest barriers hindering widespread production and equitable access to clean electricity solutions in this region?

Christwin: The most significant barrier to this sustainable and reliable electricity infrastructure is usually the corruption of personnel in the power sector. Infrastructure is critical for the economy, and most of the time, it depends on public institutions to set up and maintain it. This creates a situation where corrupt government personnel run the infrastructure, embezzle funds meant to maintain it and use bureaucracy to stifle innovation.

The impact of corruption on the Sub-Saharan African region is not just a matter of misused funds, but a significant obstacle to our economic growth. The inability to build the necessary electricity infrastructure due to corruption hampers our potential for development and prosperity.

Trinity: According to the IEA, 600 million people lack access to electricity, most of them in sub-Saharan Africa. It's obvious that transmission grid expansion isn't doing the job. Why are decentralised electricity solutions a better alternative?

Christwin: Decentralised electricity solutions offer substantial benefits, notably by transferring the responsibility of electricity infrastructure from the government to private citizens. This shift in power is evident in the growing number of individuals and businesses generating their own power, from small petroleum generators to larger diesel plants used by franchises like banks and hotels.

It makes sense for these businesses and individuals to bear the responsibility of generating their own power. They have greater control over their power supply. The autonomy here may be less than 100% because their generators still depend on the fossil fuel supply chain. The complexity of the generating system is much lower because it is smaller than the grid. They only turn on their generating set when there's a need for it compared to the grid that needs consistent fine-tuning and has to remain online across the country, a problem no government in the region has provided a permanent solution to. It's a "small system, small problem" scenario. Because of this complexity, the reliability ratio of these generating sets to the grid is high.

Even though these petroleum-generating sets are reliable decentralised electricity solutions, there's a need to move away from them to cleaner and more reliable alternatives, e.g., a solar power system. The GHG emission rate of petroleum generating sets is outrageous, and solar power systems are more reliable because they use renewable electricity. With this transition, you are no longer exposed to supply chain risk and have eliminated the cost of generating. With solar power systems, you don't buy sunshine like petroleum products. You get electricity whenever the sun is out.

The complexity of clean, decentralised electricity systems pales compared to that of the grid, making it easier to establish on a smaller scale nationwide. This empowers people and presents a significant economic advantage, as they can reduce their electricity costs and eliminate the need to rely on the fluctuating prices of fossil fuels. That's why, eventually, this model will supersede the grid and become the de facto way people generate their electricity, especially in developing countries where the central grid has never really become an indispensable infrastructure.

Trinity: If I understand you correctly, the idea is that people are directly responsible for the decentralised electricity solutions they use. Hence, they tend to manage them well compared to the national grid, where everybody is indirectly responsible for it through their bill payment. Is that it?

Christwin: Well, it makes sense when you put it that way, but only some are directly responsible for the grid. Only a few people, just a handful, are accountable for the operation of the grid compared to the entire country's population. In Nigeria, we have more than 200 million people, and those who work on the grid are a tiny fraction of that 200 million citizens. The complications of the grid are significant, and it would take a lot of work to coordinate it efficiently. However, setting up a solar infrastructure can lead to significant cost savings. You just set it up and forget it, probably revisiting it occasionally for maintenance. People would go off-grid if they had the resources to set up a standard solar infrastructure.

Trinity: It is a popular saying that after God is government. So tell us, what role can the governments in this region play in advancing the decentralisation of clean electricity?

Christwin: Okay, the role these governments can play in decentralising electricity infrastructure is to enable and incentivise people who are beginning to adopt these as an electricity source. That reduces the complexity required to keep the grid running. I especially like the idea of solar microgrids or mini-grids, where this smaller grid setup serves a community. In that community, you have solar panels on everybody's rooftop, and they are all interconnected such that they become like one system that can keep and reinforce each other, no matter the scale of each person's installation. So, it creates a smaller subset of the grid with higher reliability and total isolation. For instance, if there was a blackout in the national grid, you could cut off this mini-grid from the national grid, and it continues to sustain itself because it has stored resources within its connection. When the national grid is online again, it can be connected again to export electricity to the grid.

Suppose governments are willing to support the decentralisation of these electricity resources. In that case, they should help set up these mini-grid infrastructures and create more resilient sections of the grid that enable people to remain connected with the supply of power irrespective of the problems of the national grid. Each community's microgrid, producing the electricity it needs, could solve the national grid problem by drastically reducing the need for the national grid to remain online constantly. Also, irrespective of the status of the national grid, every legal customer enjoys what they paid for.

Trinity: Okay, so instead of a one-for-all solution, which is what the national grid is, you are saying that the government can come in by facilitating the construction and maintenance of one-for-one solar mini-grid isolated solutions for a particular community

Christwin: Another way to look at it is that each community has a solar micro-grid that interconnects into one grid for the local government area (LGA), each LGA grid interconnects into one for the state, and state grids interconnect into one for the national grid. Even if the transmission line of the national grid goes down, there won't be a nationwide blackout because the state-level grids, LGA grids, and even community grids are online and operational.

We still have the same national grid serving the entire country but using an architecture that allows it to remain online even if a section goes offline. The grid doesn't fail everywhere; it just fails at the root level of the community grid from which the problem is coming. Because of the complexity of this grid, you can't essentially rule out the possibilities of failure. That is why grid segmentation is essential so that the effect is local and doesn't disrupt the entire country. However, it's important to note that grid segmentation also comes with its own challenges, which we must address for its successful implementation. It could help democratise and decentralised electricity transmission and enable more people to access power.

Trinity: In my most recent article, I took an in-depth look at project failure in Nigeria. When we eventually get the government in these regions to throw their weight behind the decentralisation of clean electricity, how can we train future Nigerians to continue in the same approach without reverting?

Christwin: It's all a matter of incentives. If incentivised to return to a system that has never worked, people would do so. Incentives drive human behaviour. Now, if you remove those incentives from the dilapidated electricity system and insert them into the proposed decentralised clean electricity system, that's where they'll gravitate towards. For instance, in California, people get paid to export electricity from their solar power systems to the grid. This is a form of incentive that has led to a significant increase in the use of solar power. So, as long as the incentives are well-placed to attract Nigerians to use clean, decentralised electricity systems, they will stick to it.

Trinity: How does clean, decentralised electricity infrastructure empower individuals and communities in Africa to become electricity producers?

Christwin: Okay, it removes the friction in becoming an electricity producer. If you consider purchasing the necessary equipment, installing it for someone, essentially becoming their utility company, servicing them, providing electricity, and profiting from it, numerous steps are involved.

For instance, M3tering Protocol reduces the friction needed to enter the electricity provision business. You don't need to create your metering infrastructure or your backend or worry about how this infrastructure communicates with other devices in the system. All you need to think about is what solar panels you need to install. Why do I need to install it? And once I install it, can this person pay their bills?

Once you figure out that part, there's nothing else to worry about. The rest of the system works. If you can reduce the friction further than that, it makes sense for communities to go into this kind of venture. Take, for instance, a community that wants to finance its electricity infrastructure from its treasury. Conventionally, they have to develop their metering infrastructure, a backend service, and a website for collecting payments, and they can't afford the cost of these processes. But now, if we reduce the complexity to something as simple as hiring a contractor to install the solar power systems and connect our m3ters to them, it's done.

M3tering Protocol offers a ready-made solution for electricity infrastructure financing. The payment website is already in place, a secure and transparent blockchain powers the backend, and all other necessary components are included. This significantly reduces the complexity of the process, making it easier for communities, entrepreneurs, and investors to finance their electricity infrastructure. By leveraging M3tering Protocol, they can gain more for less, as they don't have to start building the infrastructure from scratch. This is the essence of what we've been building with the M3tering pProtocol: a tool to democratise electricity infrastructure.

Continue to Part 2 of the interview.

The answers in this article are the personal opinions of Ifeanyi Christwin and do not necessarily reflect the views of Switch Electric and M3tering Protocol.