SMME development through productive use of domestic energy resources

Abstract

Productive energy services are often overlooked in domestic energy access programs; yet people cannot raise their welfare except by engaging in economic activities. Household energy demand(s) should be viewed in two components, that is, residential and productive energy services. Although the South African government prioritised electricity distribution after independence, this programme was framed in terms of domestic residential use. Thus, the supplied electrical power was limited to low amperage current, adequate only for household lighting and electronics. Intrinsically, the National Electrification Programme and the Free Basic Electricity Programme [1]) that have substantially increased electricity access in the last decade, did little to spur Small, Medium and Micro Enterprises [SMME] growth in urban penumbras and rural localities. Yet, perambulates in these areas indicate that people are engaged in enterprises that yearn for cleaner, reliable, and cost-effective energy inputs. Commercial cooking is a prevalent business in the low-income settlements, which is powered mostly by basic fuels and low efficiency combustion technologies. Although SMMEs contribute about a quarter of gross capital formation, they have a major potential in employment creation, especially within the current context of negative jobs growth in government and large enterprise sectors. This paper argues that SMME growth can be consolidated and accelerated through provision of safe, affordable and efficient energy technologies. Evidence for this claim is based on a quantitative survey that was carried out among street vendors in Alexandra Township, Johannesburg. Discussions were held with the business owners on alternative fuels and modalities for transitioning the informal business sector to use of clean energy resources. The entrepreneurs cite energy poverty and poor premises as the biggest constraints to their businesses