Category Archives: UCL Energy Institute

The Clean Cookstoves Value Chain and Opportunities for Business

The value chain in private markets for clean cookstoves can broadly be categorised into production (either of full cookstoves or materials, such as ceramic liners), distribution and sales activities. For a prospective entrepreneur entering the clean cookstoves market, it is important to identify where business opportunities exist in the cookstoves value chain, and how to target these opportunities with specific business models.

Production of clean cookstoves is most commonly done by private market actors around the world. These companies take raw materials, such as clay or sheet metal, and form either complete cookstoves or cookstove components. Local producers, often clean cookstove product and fuel consumers themselves, feature heavily in the cookstove materials production market, with markets such as Sri Lanka relying on locally-produced clay liners for the dominant Anagi stove design in the country. Through early donor-led cookstove programs in the mid-1980s by organisations such as ITDG (Practical Action), over 200 potters and 2000 stove installers were trained, with over 400,000 stoves disseminated from 1985-1990. This led to a firm foundation for commercialisation and marketization of cookstoves technology. As of 2012, over 300,000 stoves were being produced annually, with 74 distribution companies active in the country [1] [2] [4]

anagistoveproducerMr. Thureirasa Ratnakumar, an ‘Anagi’ stove producer in Sri Lanka. Image: http://unhabitat.lk/news/promoting-energy-efficient-improved-cooking-stoves-for-better-health-in-the-north-of-sri-lanka/

Some distribution companies operate in an integrated fashion with other sectors of the market, such as being manufacturer and distributor or manufacturer and vendor. Generally cookstove products at a pre-distribution level are sold on a direct purchase basis to distributors or vendors, with little in the way of finance on a non-commercial loan basis.

Distribution companies in the cookstoves sector act as intermediaries between vendors and producers, but these activities can be integrated into a single company. Distribution of clean cookstoves is also commonly achieved with a direct purchase model, although costs can be high in distribution if operating outside of areas with suitable transport infrastructure, meaning that distributors negotiating favourable purchase terms with suppliers is not uncommon due to the high up-front costs of the business.

– Daniel Kerr, UCL Energy Institute 

[1] Amerasekera, R.M. (2006) Commercialisation of improved cookstoves in Sri Lanka: A case study. Available at: http://www.inforse.org/Case/Case-SriLanka-Stoves.php3

[2] World Food Program (2012) Sri Lanka: 50,000 Fuel Efficient Stoves Change Lives Of IDPs In The North. Available at: https://www.wfp.org/stories/50000-fuel-efficient-stoves-have-been-distributed-among-idps-north-sri-lanka

[3] BURN Cookstoves: About Us. Available at: http://www.burnstoves.com/about/

[4] [2] Rai & McDonald, GVEP International (2009) Cookstoves and markets: experiences, successes and opportunities. Available at: http://www.hedon.info/docs/GVEP_Markets_and_Cookstoves__.pdf

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Direct Dissemination (State Programs) vs Private Sector Models

This post, the second in our business models series, aims to explore the differences between state-led dissemination models and private-sector business models, both in terms of scalability, as well as affordability for consumer and the potential for developing sustainable markets and sustainable businesses.

There are a variety of business models that could be used to develop clean cookstoves businesses, which can broadly be categorised into three spheres: direct dissemination models, where the user receives a cookstove funded by an outside organisation (government, international donors etc.); vendor sales models, where consumers directly purchase a cookstove for a lump sum from a vendor, and micro-credit models, either delivered by vendors themselves or through dedicated micro-finance institutions. [2]

Vendor sales are the most common method of businesses interacting with end-users in the clean cookstoves sphere. These vendors either purchase cookstoves on a wholesale basis from producers or distributors, or are assisted by third-sector financing organisations to enable this purchase. BURN Cookstoves in Kenya, one of the largest integrated cookstoves companies in the country, uses a direct-sales model for its operations.

Micro-credit in the form of dealer credits are another common financing instrument used in vendor purchase models for clean cookstoves, allowing consumers to pay a periodic fee to progressively purchase a clean cookstove. Some vendors have clean cookstoves as their primary business, others use it as an additional income stream to a more traditional goods shop, or as another source of revenue in an energy service company business. For example, some solar home system concessions in South Africa, such as the Nuon-RAPS (NuRa) utility are using clean cookstoves to supplement their business with a smaller, secondary revenue stream, selling both cookstove equipment and fuels. NuRa uses sales of charcoal and ethanol gel cookstoves, as well as integrated fuel/hob LPG stoves, to supplement their main solar home system business.

The Kenyan clean cookstoves market is a good example of one that has transitioned from a direct dissemination model at a donor/state scale to a private-sector led distribution and sales model. Donor/development agency-led clean cookstoves programs in Kenya date back to the 1980s, and designs used in the initial deployment phase, such as the Kenya Ceramic Jiko (KCJ), have become staple designs of the market. Charcoal stoves however are still the predominant cookstove type used in Kenya, with estimates that 47% of the population use some form of charcoal stove, rising to 80% in urban areas such as Nairobi. Global Alliance for Clean Cookstoves estimates put the size of the market at 2.5-3 million households using some form of clean cookstove in 2012. As of February 2016, the GACC is continuing to work with partners such as the Clean Cooking Association of Kenya (CCAK) and other governmental and non-governmental organisations, to disseminate 5 million improved cookstoves by 2020.

kcj
Ceramic Jiko stove, often referred to as the Kenya Ceramic Jiko. Image: AFREPREN

The cookstove market is fragmented in Kenya, with the majority of cookstove production done on a small to medium scale. Distribution costs can be high because of this, and with a poor road network in some areas, it becomes more feasible for wholesale buyers to collect directly from producers. Cookstoves are sold through a combination of dedicated retailers and traditional vendors, with wholesale buyers acting as further distribution agents to demand centres. [1]

There are a number of reasons why private-sector models can have advantages over state/donor-led dissemination. The Kenyan market relies on private provision of cookstoves from manufacturers at a local level, with vendors purchasing cookstoves wholesale to be sold later. Whilst this can increase costs to end users due to multiple markups in the value chain, offering micro-finance at a vendor level allows vendors to access wider segments of the consumer market, allowing people who could otherwise not afford a cookstove outright the chance to progressively purchase one. Scalability and flexibility are also advantages to private-sector dissemination, with multiple opportunities across the value chain for businesses depending on local consumer preferences and material availabilities. [3]

The next post in this series will explore the concept of the clean cookstoves value chain further, and identify where potential business might be sited within this value chain.

– Daniel Kerr, UCL Energy Institute

[1] GVEP International (2012a) Global Alliance for Clean Cookstoves Kenya Market Assessment, Sector Mapping. Available at: http://cleancookstoves.org/resources_files/kenya-market-assessment-mapping.pdf

[2] Gaul (2009) Subsidy schemes for the dissemination of improved stoves. Experiences of GTZ HERA and Energising Development. Available at: http://fsg.afre.msu.edu/promisam_2/references/Gaul_2009_Stove_Subsidies.pdf

[3] SNV (2015) ICS Business Toolkit, Starting, Managing and Growing an Improved Cook Stoves Business in Uganda. Available at: http://snv.org/en/countries/uganda/publications/snv-uganda-integrated-cookstove-business-toolkit

Clean Cooking Technologies and Dissemination: Growing Markets

Clean cookstoves, also known as improved cookstoves (ICS) have the potential to significantly change patterns of household and institutional energy use in developing countries. However, access to clean cookstoves for consumers in developing countries remains low, despite high levels of fuel use appropriate to cookstoves being prevalent in developing countries, particularly in rural areas.

cookstovegraph1

Share of population using solid fuels with access to improved cookstoves in Developed Countries (DCs), Least Developed Countries (LDCs) and Sub-Saharan Africa (SSA) [1]

The use of clean cookstoves has the potential to improve livelihoods, particularly for women and children, in developing countries through alleviating the time burden of gathering fuel, allowing users to spend more of their time on other activities, for example income generation. Daily collection of firewood for cooking can vary in duration from 3 hours [7] to seven hours [8]. Clean cookstove technologies such as rocket stoves can achieve the same cooking results, in the same time, while using just 60% of the fuel [8]. Global Alliance for Clean Cookstoves research has shown that traditional cookstove-using households in India, Bangladesh and Nepal on average spend 660 hours/year on fuelwood collection, while improved cookstove households spend just 539 hours/year [9]. Indoor air quality improvements are another key benefit. Around 3.8 million premature deaths annually are caused by non-communicable diseases, such as heart diseases and lung cancer that can be attributed to indoor air pollution [3].

Removing poorly-combusting, high-smoke fuels such as traditional wood fuels from the household energy mix in developing countries, and reducing indoor air pollution consequently, would have huge positive consequences for public health in the developing world.

Clean cookstoves technologies tend to be demarcated on the type of fuel used, as well as the general design of the cookstove and its technological aims. These cookstoves can also be demarcated through cost, with lower-cost cookstoves made from clay or metal with a clay lining, and higher-cost stoves using factory-machined materials like metals. Differences in cost tend to lead to different target market, with low-cost cookstoves targeting rural consumers, and higher-cost cookstoves focusing on emerging middle classes and high-income employees. Costs for a household clean cookstove can range from US$10 to US$350+, and as such different business models are required to disseminate these stoves to best reach their target markets. High-cost stoves are most commonly directly sold to consumers, whereas low-cost stoves can be available through government or donor programs of dissemination, as well as through direct purchase, vendor-credit or micro-credit models. [4] [6]

stovetech-combined-wood-charcoal-ics

Stovetech combined wood/charcoal improved cookstove. Source: http://inhabitat.com/four-cooking-stove-designs-that-can-save-the-world/

Solid fuel cookstoves, for example cookstoves using traditional woodfuels, tend to aim for significantly more efficient combustion of fuels, reducing indoor air pollution in the form of smoke and particulate matter, as well as generating more heat. These efficient designs can focus on combusting fuel more effectively, through designing combustion chambers to allow for more aerobic combustion, whereas others focus on having a heavily-insulated cooking chamber to reduce heat loss, focusing on longer cooking times for the same amount of fuel. Other cookstove designs for developing countries focus on using more efficient fuels with low-cost technology. Some examples of this include efficient charcoal stoves, as well as LPG stoves designed for developing country use.

cookstove-blog-table-1

Lab efficiencies of various established cookstove designs used in the developing world. Table established by D. Kerr derived from http://catalog.cleancookstoves.org/test-results, with standards available online at: http://cleancookstoves.org/technology-and-fuels/testing/protocols.html

However, lab efficiencies do not always translate into real-world efficiencies. A recent Indian cookstoves study conducted by researchers at the University of Washington and the University of British Colombia found disparities in real-world use efficiencies in a recent CDM program of cookstove dissemination from the Indian government. Particulate matter emissions especially were higher than expected, which may have been due to the ‘stove-stacking’ phenomenon, where families continue to use traditional cookstoves after receiving an improved cookstove. Some 40% of households in this study were found to be doing this [5].

Dissemination of clean cookstoves, and growth in access to the technologies, has the potential to have a significant positive impact on the sustainability of energy use and improvement of livelihoods of consumers in developing countries. Whilst state-run programs have had some success in directly distributing clean cookstoves, market-based measures have been shown to have significant impacts over the medium-long term, and private cookstove markets have developed in a number of Sub-Saharan African countries, such as Kenya, South Africa and Uganda. Markets across the world have disseminated large numbers of cookstoves, with over 12 million disseminated in China in the 2012-2014 period, 4.5 million in Ethiopia, and nearly 3 million in Cambodia [12]. The Kenyan clean cookstoves market was sized at 2,565,954 units in 2012, with high levels of urban and peri-urban penetration (~35%), but significantly less rural coverage [10]. The Ugandan market by comparison is estimated to be around 600,000 households, with urban areas again dominating this group [11].

This series of posts aims to explore the variety of models that private businesses can use to achieve scale and sustainability in their operations in the clean cookstoves sector [2]. Direct dissemination will be compared to vendor purchase, vendor credit and micro-credit models in the second blog of this series. Post three will explore the clean cookstoves value chain and identify opportunities for business growth along the value chain, and the fourth post in this series will examine the role of government in promoting clean cookstoves businesses.

– Daniel Kerr, UCL Energy Institute

[1] Bazilian et al. (2011) Partnerships for access to modern cooking fuels and technologies. Current Opinion in Environmental Sustainability, Vol. 3, pp. 254 – 259.

[2] Rai & McDonald, GVEP International (2009) Cookstoves and markets: experiences, successes and opportunities. Available at: http://www.hedon.info/docs/GVEP_Markets_and_Cookstoves__.pdf

[3] WHO Website (2016) Household air pollution and health.  Available at: http://www.who.int/mediacentre/factsheets/fs292/en/

[4] Global Alliance for Clean Cookstoves (2016) Clean Cooking Catalog.  Available at: http://catalog.cleancookstoves.org/stoves

[5] University of Washington (2016) Carbon-financed cookstove fails to deliver hoped-for benefits in the field. Available at: http://www.washington.edu/news/2016/07/27/carbon-financed-cookstove-fails-to-deliver-hoped-for-benefits-in-the-field/

[6] Global Alliance for Clean Cookstoves (2016) Business and Financing Models., Available at: http://carbonfinanceforcookstoves.org/implementation/cookstove-value-chain/business-models/

[7] FAO (2015) Running out of time: The reduction of women’s work burden in agricultural production. Available at: http://www.fao.org/3/a-i4741e.pdf

[8] GACC (2015) The Use of Behaviour Change Techniques in Clean Cooking Interventions to Achieve Health, Economic and Environmental Impact. Available at: https://cleancookstoves.org/binary-data/RESOURCE/file/000/000/369-1.pdf  

[9] GACC/Practical Action (2014) Gender and Livelihoods Impacts of Clean Cookstoves in South Asia. Available at: https://cleancookstoves.org/binary-data/RESOURCE/file/000/000/357-1.pdf

[10] GVEP/GACC (2012) Kenya Market Assessment: Sector Mapping. Available at: https://cleancookstoves.org/binary-data/RESOURCE/file/000/000/166-1.pdf

[11] GVEP/GACC (2012) Uganda Market Assessment: Sector Mapping. Available at: http://cleancookstoves.org/resources_files/uganda-market-assessment-mapping.pdf

[12] REN21 (2016) Renewables Global Status Report. Available at: http://www.ren21.net/wp-content/uploads/2016/06/GSR_2016_Full_Report_REN21.pdf

What Business Model is Best for LPG Dissemination?

In the previous two posts of this series on LPG in developing countries, we have examined the concepts of fuel-switching to LPG from other, less sustainable fuels, and some ways of promoting LPG access in developing countries through government interventions. However, the development of LPG markets with private and public-private participants in developing countries has been slow, and few interventions attempted by governments and third-sector actors have had success in developing these markets.

Developing a private market for LPG in developing countries requires the existence of business models that are relevant to the technology and fuel source, as well as adaptable to changing consumer and market conditions.

Is fee for service a good model for LPG?

Fee-for-service business models, where consumers pay a monthly fee to an energy service company for their energy services, whilst the company maintains ownership of the system and maintenance/operations responsibility, have been used to great effect in other renewable technology sectors in allowing users to access energy services at a significantly reduced up-front cost, removing one of the primary barriers to business success and market development for renewable technologies.

Applying a fee-for-service business model to LPG equipment and fuels could help to promote the development of an LPG services business in developing countries. The high up-front cost of converting from other fuels to LPG can be mitigated through a monthly payments scheme, allowing the user to access the technology where otherwise they could not. This can be applied to LPG fuels as well as LPG-utilising equipment, such as water heaters or cooking equipment. However, there are disadvantages to the fee-for-service approach as a transaction model for LPG also. Equipment costs for LPG are generally low, particularly for cooking use, with the majority of the cost coming in fuels. Fuel costs are generally very high compared to other renewable thermal technologies. As such, direct purchasing of LPG equipment is within reach of a large proportion of consumers, mitigating the usefulness of a fee-for-service approach to spread out high equipment costs. Applying a fee-for-service transaction model is an approach that has been tested in rare cases: LPG fuel financing is used by some companies, for example VidaGas in Mozambique, where users can pay off cylinder purchases over a period of 2-3 months.

LPG business model table

Appropriateness of the most common thermal energy fuel types for common renewable energy business transaction models. Source: Robert Aitken, 2016. [1]

Other models for LPG dissemination

Some countries, for example Ghana, South Africa and Nigeria, have started implementing a cylinder exchange model for LPG fuels, as opposed to previous models where cylinders were bought as a unit for a much higher price. These cylinder exchange models have been used in the domestic LPG sector in Europe for many years, and involve exchanging empty cylinders at central locations for full cylinders, with the user only paying for the fuel in the new cylinder. This involves the energy service company retaining ownership of the cylinders in circulation, allowing the user to access fuel at a lower cost.

kenya lpg cylinders

A vendor inspects cooking gas cylinders at a cylinder exchange site in Kenya. Source: http://empoweredweb.blogspot.co.uk/2011/07/opportunities-in-gas-business.html

Whilst this model benefits the users greatly, from a company perspective it is challenging, requiring a large up-front investment in terms of cylinders and filling equipment for LPG, as well as bulk purchases of the fuel itself, and the need for safe and secure storage of the fuel. However, with policies to promote business development in place, for example start-up grants or low-interest credit underwritten by governments/NGOs, this model has the potential to greatly increase access to LPG in developing countries.

– Xavier Lemaire and Daniel Kerr, UCL, February 2016

[1] Aitken  Robert (2016), Technology and Business models for thermal energy services, STEPs toolkit, Under print.

Promoting LPG Uptake in Developing Countries

Increasing the use of LPG fuels as a means of achieving greater sustainability has been a targeted policy for a number of developing countries in recent years. However, projects to promote LPG access have met with mixed success. The barriers to increasing the use of LPG in developing countries, particularly for poorer communities or those in rural areas, are numerous, including issues of price of fuel, access considerations and the reliability of supply, and the price of LPG-using equipment, for example stoves..

A number of projects have endeavoured to mitigate these barriers and improve the state of LPG markets in their respective countries and regions. The Ghanaian LPG sector is often cited as an example of a successful government-level intervention to develop LPG markets.

The case of LPG in Ghana

The earliest government programs in the sector began in 1989, and recent government policy on energy has put access to LPG for households and institutions and security of LPG supply as high priorities in the national energy strategy. Government strategy has addressed two key themes: increasing indigenous production, storage and equipment production capacity for LPG, and removing barriers to access for both the urban and rural populations of the country. Results of these interventions have included improving the production and storage capacity of the Tema oil refinery, re-capitalising the Ghana Cylinder Manufacturing Company to indigenously produce LPG cylinders, and price-levelling the cost of LPG fuel across the country to promote rural market growth.

However, direct subsidies such as those used in Ghana for levelling the price of LPG fuel can have unintended consequences and distort markets. There has been seen in the rise of LPG conversions for taxis and minibuses in the country, taking advantage of the newly-subsidised LPG fuel for transport use. The rise in LPG use in road vehicles was also due to increased government taxes on transport fuels in 2012 and 2013, which do not include LPG in their remit. The combined effect of being able to avoid taxation on petrol or diesel, as well as take advantage of subsidised domestic LPG, has led to increased LPG use in the automotive sector. More recently, from 2013 onwards, supplementary imports to the Tema Oil Refinery’s LPG output, as well as the government’s scaling back of price controls and subsidies, have reduced automotive LPG use. [3]

Other countries, such as Indonesia and India, have also implemented direct subsidy models, such as the Indonesian kerosene conversion megaproject from 2007-2009, and the Indian LPG sector, which as of 2015 was offering direct subsidies to consumers for the purchase of LPG fuels and equipment through the government’s Direct Benefit Transfer system. Both of these projects have seen a huge shift from the use of kerosene for cooking and heating to the use of LPG, and both projects have achieved this through re-targeting government subsidies towards LPG, and away from other fuel sources. In the case of Indonesia, LPG use following the conversion project rose to over 80% of rural and 90% of peri-urban and urban households by 2013. The Indonesian program also intervened in the equipment sector, distributing 44 million LPG conversion kits to 15 provinces in the country, enabling consumers to convert to LPG fuel without the high initial investment in LPG-using equipment. [1] [2]

pertamina-graph

Increase in LPG usage before and after the kerosene-LPG conversion project in Indonesia. Source: Pertamina, 2013, http://www.pertamina.com/en/

However, experience with developing a functional private market for LPG in some developing countries is limited, particularly in Sub-Saharan Africa. The persistent issues of access to the LPG fuel and reliability of supply, as well as transport considerations for rural areas and a lack of a distribution network, can hamper the development of markets. The next post in this series will investigate business models for use in the LPG sector by private or public-private participants.

– Xavier Lemaire and Daniel Kerr, UCL Energy Institute, February 2016

[1] Budya & Arofat (2010) Providing cleaner energy access in Indonesia through the megaproject of kerosene conversion to LPG. Energy Policy, Vol. 39, pp. 7575 – 7586.

[2] Andadari et al. (2014) Energy poverty reduction by fuel switching. Impact evaluation of the LPG conversion program in Indonesia. Energy Policy, Vol. 66, pp. 436 – 449.

[3] Biscoff et al. (2012) Scenario of the emerging shift from gasoline to LPG fuelled cars in Ghana: A case study in Ho Municipality, Volta Region. Energy Policy, Vol. 44, pp 354 – 361.

“Fuel Switching” To LPG: Substituting More Sustainable Fuels

‘Fuel switching’ has achieved some prominence in the sustainable energy for development discourse. Fuel switching is usually used to define situations where end-users transition from less-sustainable traditional fuels, such as fossil fuels like kerosene or paraffin, or traditional woodfuels, to more sustainable sources of fuel used for the same purpose. For example, kerosene for lighting may be substituted for electric lighting from a solar home system, or woodfuels used for cooking or heating may be substituted for LPG.

Fuel switching has been particularly put forward when relating to LPG uptake in developing countries, as LPG fuel has significant benefits over other modes of fuel used for similar purposes. These can include superior combustion properties, producing less indoor air pollution with the attendant co-benefits in terms of public health. Fuel switching can lead to a reduced burden on the end-user for energy resource acquisition, such as alleviating the time burden of collecting woodfuels or purchasing charcoal/kerosene.

STEPs LPG Blog 1 Graph 1

Time spent collecting wood fuels per day by women in different African countries, 1990-2003, World Bank 2006. Source: http://ourworldindata.org/data/environmental-change/indoor-air-pollution/

Fuel switching (combined with the use of efficient cookstoves) can also lead to improved performance resulting from the use of a more energy-dense fuel, such as reduced cooking times.

STEPs LPG Blog 1 Graph 2

A comparison of different types of clean cookstoves and their relative energy consumptions and times to boil water. Source: http://www.lowtechmagazine.com/2014/06/thermal-efficiency-cooking-stoves.html

But fuel switching is not a one-way process where energy users switch to modern fuels and never come back to traditional fuels. Energy stacking is defined as when end-users in developing countries engage in multi-modal fuel usage depending on a variety of factors (e.g. variances in household income seasonally or over time), or utilising certain fuels for specific purposes (e.g. using kerosene for lighting and woodfuels for cooking).

Creating the incentive for a household, commercial enterprise or industry to engage in fuel switching can be challenging. The barriers to increased uptake of sustainable energy sources and more-sustainable energy equipment, such as solar home systems or LPG cooking apparatus, are well-documented [1] [2]. These can include higher costs for fuels, high initial investment costs putting systems/equipment out of reach of users, and problems with fuel availability, for example in distributing LPG fuels to remote rural areas.

These issues will be addressed in the next article in this series on the STEPs Blog, “Methods of Promoting LPG Uptake in Developing Countries”.

— Xavier Lemaire & Daniel Kerr, UCL Energy Institute, February 2016

[1] Pandey & Chaubal (2011) Comprehending household cooking energy choice in rural India. Biomass & Bioenergy, Vol. 35, pp. 4724 – 4731.

[2] Rai & McDonald (2009) Cookstoves and Markets – Experiences, Successes and Opportunities. Available at: http://www.hedon.info/docs/GVEP_Markets_and_Cookstoves__.pdf#

The recent evolution of China’s National Biogas Program and lessons learned for application in other regions

This blog aims to describe in brief the history of China’s national biogas program and its transition phases in both the 1980s (moving to prefabricated plastic digesters) and more recently in promoting household scale systems, as well as how this program compares to other government-scale programs in household and centralised biodigesters. [1] [2] [3]

The Chinese National Biogas Program is one of the most cited examples of a successful biogas dissemination program at a government scale. The first biodigesters started appearing in China in the 1920s, and from the 1970s onwards the government began introducing household-scale centralised biodigester systems for rural communities under the predecessor of the current program. The first major transition in the program took place in the 1980s. Previously to this, most biodigesters in the country were constructed on-site from brick or concrete, however this period saw the introduction of what are known in the country as “commercialised digesters”. This covers three constructions of prefabricated biodigesters. Fibreglass-reinforced plastic (FRP) digesters began appearing in the 1980s themselves, whilst so-called plastic soft (PS) and plastic hard (PH) digesters came into the market in the mid-90s. These digesters offered significant commercial and operational advantages, being able to be constructed at a central site and then disseminated, as well as being more reliable, having lower maintenance requirements and a better performance overall.

xia zuzhang china biogas graph

Source: Adapted from Zuzhang (2014) Domestic biogas in a changing China: Can biogas still meet the energy needs of China’s rural households, http://pubs.iied.org/pdfs/16553IIED.pdf

As of 2011, 41.68 million households were using biogas services through the National Biogas Program. As of 2010 production capacity for the three previously-described prefabricated digester types was approximately 2,500,000 per year, and as of 2014, approximately 50 million households had been reached with biogas supply, using over 16 million cubic metres of biogas per year [4]. At least one prefabricated digester manufacturer exists in each Chinese province, over 100 in total. These digesters are also marketed across South-East Asia, and also recently to Sub-Saharan Africa.

However, there exist a number of present challenges to the continued development of the Program. Current funding for biogas digester construction predominantly comes from state, regional and government sources in the form of a subsidy for rural households. Rural households are expected to contribute, but this varies widely from just the labour costs, to 50-70% of the total installation costs. Some funding criteria stipulated by the government also exclude large proportions of the rural population: for a village to qualify for biodigester subsidies for example, at least 70% of the households must own sufficient livestock. This funding regime, as it exists, makes no provision for servicing and maintenance, and whilst biogas service cooperatives are beginning to appear in rural areas, no effort has been made to assess the current proportion of functioning digesters nor repair any identified non-functioning systems at a local government level.

Possibly the largest constraint to the continued operation and growth of the program is internal migration in China. The rural population is falling significantly as urban development continues, with huge number of rural people moving to urban areas for greater employment prospects and wages. This also contributes to biodigester effectiveness; with traditional animal husbandry industries giving way to larger, centralised livestock farming, feedstock regimes are decreasing in suitability in rural China for household-scale digesters, presenting an ongoing constraint to the operation of the program.

– Xavier Lemaire & Daniel Kerr, UCL Energy Institute

[1] Raha, Mahanta & Clarke (2014): http://dx.doi.org/10.1016/j.enpol.2013.12.048

[2] Groenendaal & Gehua (2010): http://dx.doi.org/10.1016/j.energy.2009.05.028

[3] Deng et al. (2014): http://dx.doi.org/10.1016/j.rser.2014.04.031

[4] IRENA (2014) Renewable Energy Prospects: China. Available at http://irena.org/remap/IRENA_REmap_China_report_2014.pdf