Taita Taveta County, Kenya – Biogas Partnership for Farming Communities

Taita Taveta county lies approximately 150km northeast of Mombasa and 300km southeast of Nairobi in Kenya. Residents of Wundanyi subcounty were approached in 2013 by a newly-formed NGO, Taita Biogas, to pilot new biogas installations, due to the high prevalence of cattle farming in the region. This gives ready availability for high-quality feedstock for biogas digesters in the form of cattle manure. To date, the NGO has installed over 600 household-scale biodigesters in the country, and has completed two institutional biodigesters for schools in the region, with a third under construction. These institutional-scale installations will use human and food wastes as feedstock rather than cattle wastes.

The business model for the NGO provides an opportunity for consumers who would not be able to afford a biodigester installation outright to install a system. Taita Biogas covers half of the cost of installation, and also arranges contractors to construct and commission the system. The households then pay the remaining amount for installation, usually in the region of KSh145,000 (GBP1,035). In recent years the NGO has expanded operations through partnership with the Micro Enterprise Support Project, another Kenyan NGO supporting farmers venturing into macadamia nut and French bean farming. Whilst this partnership has not been successful to date, due to MESP pulling out in 2017, a new partnership with the organisation is to be formed with additional funding, and a loan finance option provided through the MESP to members for biogas installations.

Household biodigester user Honorata Nyange cleaning utensils at her Lushangonyi home in Taita Taveta County, Kenya. Photo/Malemba Mkongo, star.co.ke

There are a range of benefits available to the farmers who have installed these biogas systems, as well as the institutional-scale digesters installed by regional schools. Households have reported a huge reduction in the amount of money and time invested in collecting firewood and purchasing charcoal, and the institutional users have reported a 50% reduction in the cost of purchasing firewood for cooking since installation of the digesters. In addition, this scheme is innovative in that householders are coordinating with the NGO to apply for regulatory permission from the Energy Commission of Kenya to bottle and sell biogas on the local market, as self-producers. Biogas sells for comparable prices to natural gas on the Kenya market (KSh200/kg (GBP1.43/kg), compared to KSh175-250 (GBP1.25-1.78/kg) for natural gas), and should regulatory permission be granted, these biogas installations have the potential to become an additional revenue stream for the farmers. Finally, household users have reported significant improvements in both cooking quality and ease of use when using biogas compared to firewood or charcoal, with a reduction in combustion residues and ease of lighting when using biogas as a fuel source.

The NGO is currently expanding its operations both on a geographical and technology-focused scale. As well as its operations in Kenya, the NGO is conducting feasibility studies for joint biogas/solar photovoltaic/solar water heater applications in Ethiopia, as well as local training workshops in partnership with an Ethiopian NGO, MCMDO-REESDE, for solar water heating technology, both in terms of installation and local construction.

– Daniel Kerr, UCL

References

Star.co.ke (2017) Taita Taveta Dumps Firewood for Biogas. Available at: https://www.the-star.co.ke/news/2018/02/12/taita-taveta-dumps-firewood-for-biogas_c1707691 [Accessed 10th March 2018]

Taita Biogas (2018) What We Do. Available at: http://biogas-taita.de/home.php [Accessed 10th March 2018]

Solar Water Heating as an Energy Service – Part 1 – Technology Choices and Markets

Solar water heaters as a product have the potential to contribute considerably to energy demand reduction in developing countries. This exists both as a household-scale technology, and in industrial applications such as desalination in countries such as the UAE and Saudi Arabia, and industrial process heat in both developed and developing countries. A number of developing countries around the world, notably those in Sub-Saharan Africa, have had success in disseminating solar water heating products on a commercial basis, in addition to a number of large-scale government dissemination programs. Countries such as South Africa (with around 500,000 systems installed as of 2016) and China (which has over 85 million installed SWH units as of 2016) have developed a robust network of commercial installers and manufacturers of solar water heating units and parts, selling products on a market basis to households and businesses.

Solar water heater installed by ESKOM, South Africa. Image: gmourits, Flickr, via http://inhabitat.com/eskom-installs-solar-powered-heaters-on-south-african-roofs/

 

There are a number of opportunities in developing country markets to develop a solar water heating sector. A number of developing countries, particularly those in Sub-Saharan Africa, have high levels of insolation (sunlight kWh/m2/day), and a consistent demand across income segments of the population for water heating. Industrial process heat is another sector where solar water heating could have an impact, as is institutional process heat, for example heat exchangers for hospital refrigeration, and hot water for use in health centres and schools.

Entrepreneurs and companies looking to enter the solar water heating market space need to consider a number of questions before starting their operations. Firstly, an appropriate technology choice is essential for succeeding in the SWH market, perhaps more so than many other renewable energy technologies. Deciding which consumer segment or income bracket to target informs the technology decision somewhat, but thorough research needs to be done on what the market and consumers can afford before deciding on a technology. Main technology streams for SWH include flat-plate solar collectors, and evacuated tube solar collectors. Both work on similar principles, heating water that passes through the collector, either through capillary action or through the use of an electric pump. Flat-plate collectors can be slightly less efficient than evacuated tube designs due to heat loss through convection, however they are also less expensive and simpler to produce. Evacuated tube designs are generally more efficient at heating water, but are also more expensive to compensate for the increased complexity in manufacture.

Flat-plate solar collector installed on a house in the United Kingdom. Image: uk.solarcontact.com

Flat-plate solar collector efficiency vs evacuated tube efficiency at various temperature ranges for a typical North American location. Source: https://blog.heatspring.com/solar-thermal-flat-plate-or-evacuated-tube-collectors/

 

When designing a new solar water heating business or intervention, therefore, it is important to consider which variant on the technology is to be used, and at what scale (household, institutional, industrial etc.), in order to plan dissemination based on affordability for the consumer. The next blog in this series will investigate business and financing models that can assist in improving the sustainability and replicability of solar water heating energy service companies.

– Daniel Kerr, UCL Energy Institute

References

Clean Technica (2015) World’s Largest Solar Powered, Jellyfish-Fightin’ Desalination Plant To Be Built in Saudi Arabia. Available at: https://cleantechnica.com/2015/01/22/worlds-largest-solar-powered-desalination-plant-under-way/

Urban, Geall & Wang (2016) Solar PV and solar water heaters in China: Different pathways to low carbon energy. Renewable and Sustainable Energy Reviews, Vol. 64, pp. 531 – 542

EE Publishers (2016) Solar water heater rollout programme gains momentum. Available at: http://www.ee.co.za/article/solar-water-heater-rollout-programme-gains-momentum.html

Solar Cooking and Energy Service Companies: An Unexplored Market Opportunity?

Solar cooking, as a technology and group of products, has existed for many decades, with examples being used in the 1970s. The technology in its simplest form has remained relatively unchanged since then, with the basic premise being either a flat or parabolic reflecting surface, placed in the sun, reflecting sunlight onto a cooking chamber. This can be either below the flat-plate reflector, or at the focal point of the parabolic collector. These types of devices are easy to manufacture and can be extremely cost-effective, with little more than a reflecting surface (for example, foil-backed card) and a cooking vessel needed for a minimum setup. These features give this technology particular applicability for targeting bottom-of-pyramid consumers with sustainability interventions: typical prices for simple designs (such as the flat-plate reflector shown below) range from US$3-5.

Solar box cooker made from carboard boxes and aluminium foil. Image: https://nakazora.files.wordpress.com/2011/06/solar-cooker1.jpg

Parabolic solar cooker in use at an informal settlement in Barcelona. Image: Brinerustle / Wikimedia Commons / CC BY-SA 3.0

 

A number of companies currently distribute simple kits for creating solar cookers from scratch, usually in the form of a reflective card template for the reflecting surface. However, these pre-packed kits are often more expensive than locally-sourcing materials for manufacture, ranging up to US$30-40, without offering meaningful benefits to the consumer aside from convenience. There are also a number of companies in developing countries that distribute full solar cookers to consumers using a direct-purchase business model, such as SunFire in South Africa and L’Obel Solar Power in India. Prices for these designs, commonly higher-quality parabolic mirror cookers, range up to US$200.

As such, it appears there is an opportunity for low-cost solar cooking business to develop markets for cheap, reliable solar cookers for bottom-of-pyramid consumers. In addition, through using alternative payment models for business, higher-cost designs can become more accessible to a greater number of consumers. Offering micro-credit products for deferred purchasing of solar cookers, or engaging with consumers on a fee-for-service basis with consumers paying a monthly fee for their product, would allow mid-range technologies to become accessible to consumers with lower incomes.

Other opportunities exist in the solar cooking market space for complimentary technologies, in particular heat-retention bags such as the Wonderbag from South Africa. This is designed to fit around the cooking vessel to retain heat and slow-cook the contents, after it has already been heated, reducing the overall energy requirement for cooking. Whilst this technology is perhaps most applicable to wood or charcoal-fired stoves, it can also help improve convenience when using solar cooking products. For example, rather than leaving a cooking vessel in the solar cooker for up to six hours, it can be left there for 1.5-2 hours, then transferred to the Wonderbag for further cooking.

For more information on the Wonderbag and use-case studies, please refer to https://samsetproject.wordpress.com/2017/04/10/energy-poverty-in-peri-urban-communities-in-polokwane-south-africa-part-1-identifying-the-issues/

— Daniel Kerr, UCL Energy Institute

References

Teach A Man To Fish (2009) Solar Cooker Business Guide. Available at: http://www.teachamantofish.org.uk/resources/incomegeneration/Solar-Cooker-Business-Guide.pdf

Gautam (2011) Microfinance Intervention for Financing Solar Cooking Technologies – Financing With Savings. Available at: http://www.microfinancegateway.org/sites/default/files/mfg-en-paper-microfinance-intervention-for-financing-solar-cooking-technologies-financing-with-savings-mar-2011.pdf

Solar Cookers International: CooKit. https://shop.solarcookers.org/?pn=CooKit&cn=Solar+Cookers&p=621&c=27

L’Obel Solar Power Systems: Solar Thermal Products: http://www.lobelpower.com/solar_thermal_product.htm

SunFire Solutions: http://www.sunfire.co.za/wp/

Wonderbag World: http://www.wonderbagworld.com/

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]

Mr. 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

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.

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.

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 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.

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

Supporting Thermal Energy Services in Afghanistan

Binu Parthan from Sustainable Energy Associates writes on the growing support for thermal energy service considerations in Afghanistan.

Afghanistan is often in the news for the wrong reasons such as large swathes of migrants on European shores, armed conflicts, loss of life etc. However it is possible that the country might actually be implementing one of the most innovative energy services projects which has just started implementation with support from the STEPs team.

Decades of political instability and conflict has resulted in low levels of infrastructure access levels in Afghanistan. Over 57% of the Afghan population does not have access to electricity and 81% of the population does not have access to non-solid fuels (World Bank/IEA, 2015). The situation is dire in rural Afghanistan where only 4% of the population have access to non-solid fuels. Many such locations in Afghanistan are located in colder regions with more than 6000 HDDs/Year.

Afghan households use a Tandoor, a traditional cylindrical clay or metal oven for cooking and baking an efficient version of which is shown in the Fig. It is reported that 90% of cooking revolves around making bread called Naan, followed by potatoes. Houses also use a Bukhari, a traditional space heater for heating the living spaces in winter. Some of the traditional houses also have a Tawa Khana which circulates the hot combustion gases from the tandoor under the floor of the living room and releases to the outside through the opposite wall.

Households in Afghanistan use firewood, animal dung cakes, charcoal and shrubs for heating and cooking. Traditionally firewood and charcoal were purchased in rural Afghanistan but increasingly shrubs and animal dung cakes also have to be purchased. The thermal energy use of solid fuels also have their serious health effects, the annual number of pre-mature deaths from indoor-air pollution is estimated to be 54,000/Year (WHO, 2009). In comparison the civilian casualties in 2015 from the armed conflict in Afghanistan was 11,002 (UNAMA, 2016). The use of solid fuels are also a financial strain on the Afghan households as the average rural Afghan household spends over $ 90 on fuels of which only 12% is on kerosene/lighting with 88% on thermal energy. The prices of the solid fuels also increase by 15-25% during winter months as well.

An efficient Tandoor in Afghanistan. Image: COAM/Amy Jennings

Since late 2013, since the inception of the STEPs project, till late 2015, Sustainable Energy Associates (SEA), one of the partners have been working with the Ministry for Rural Reconstruction and Development (MRRD) in Afghanistan and UNDP to develop a project to address these rural energy and thermal energy challenges. These efforts have led to development of a new programme – Afghanistan Sustainable Energy for Rural Development (ASERD) which has business model and financial innovation at the core of the programme design and was finalised by SEA in late 2015. The project agreement was signed by MRRD and UNDP in late December 2015 and will be financed by the governments of South Korea and Sweden. The project will have a financial outlay of over US$ 50 million and will be implemented over 4 years during the period 2016-2019.

The ASERD programme plans to establish sustainable rural energy services in 194 rural communities in 4 years, providing both electrical and thermal energy services. The efforts will bring sustainable energy to over 19,500 households providing health, economic and social benefits. However the major contribution the programme will make to rural energy in Afghanistan would be to establish delivery models that are technology neutral, leverage additional local and international resources, mobilise communities, engage the private sector and financiers to establish a self-sustaining delivery model. The thermal energy service model which will be used by ASERD is shown in Fig.1.

Thermal Energy Service Model of ASERD. Image: Sustainable Energy Associates

Past rural energy programmes in Afghanistan have mainly relied on technology driven approaches which have focused on commissioning electricity generating equipment and transferring ownership, operation and utility management responsibilities to the communities. These efforts have also largely ignored the cooking and heating needs of rural population in a country which has cold winters. The opportunities to go beyond household energy to commercial, enterprise and public service use of energy have not been exploited or capitalised effectively. Similarly private sector and financial institutions have only played a limited role in the programme so far and the aspects of policy, regulation, standards and incentive frameworks have also not received considerable attention.

Against this backdrop, the ASERD programme seeks to graduate from the current approach to establish a technology-neutral, sustainable service delivery arrangement to provide thermal and electrical energy in rural areas of Afghanistan for household, social and productive needs. The programme will also provide energy in rural areas to seek agriculture productivity gains, rural enterprise development, income generation, community social empowerment and cohesion as well as to expand public service to improve access to better health, education and security in rural areas. To deliver these services in rural areas in a sustainable manner the programme will seek to engage the national utility and the private sector in addition to community mobilisation.

The programme will also develop capacities of the government agencies, civil society and the, private sector including the financial sector. ASERD will also create frameworks for policy and regulation, testing and quality assurance as well as will also pilot seven innovative energy service delivery models which will leverage skillsets and resources from communities, private sector and financial institutions some of which are linked to global financing mechanisms for climate change and energy. These models will also result in benefits to women and the marginalised nomadic Kuchi communities.

The design of ASERD has benefited from the learnings on thermal energy services offerings, key challenges and solutions gained by the STEPs project team which will now be used to support about 20,000 families in Afghanistan. SEA will be involved during the implementation of ASERD to support MRRD and UNDP.

– Binu Parthan, SEA

References

Conservation Organisation of Afghan Mountain Areas (COAM), 2012, Shah Foladi Village energy Use Survey

International Energy Agency (IEA) and the World Bank. 2015. “Sustainable Energy for All 2015—Progress Toward Sustainable Energy” (June), World Bank, Washington, DC. Doi: 10.1596/978-1-4648 -0690-2 License: Creative Commons Attribution CC BY 3.0 IGO

United Nations Assistance Mission in Afghanistan (UNAMA), 2016, ‘Civilian Casualties Hit a New High in 2015’ available at  https://unama.unmissions.org/civilian-casualties-hit-new-high-2015

United Nations Development Programme (UNDP), 2015, Project Document: Afghanistan – Sustainable Energy for Rural Development (ASERD)

World Health Organisation, 2009, Country profile of Environmental Burden of Disease: Afghanistan

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.

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.

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.

The Challenges and Opportunities of Centralised and Decentralised Biodigesters

The STEPs research project explores the relative benefits and dis-benefits of larger centralised biogas systems at a village scale versus smaller family-scale systems. It also investigates the economic and financing factors (centralisation brings economies of scale but can only really be implemented by organisations/governments, family-scale systems may be out of reach of user capital without financing arrangements), environmental factors, and social and behavioural considerations (do users want to collectively cook, issues with economics of pipe gas supply meaning necessity of group facilities etc) inherent in biodigester development.

Biogas digesters can be a valuable solution to providing thermal energy services to rural and urban households in the developing world. The technology is particularly applicable in rural areas, where access to feed stock for the digesting chamber in the form of agricultural wastes and other organic wastes is greater. In general, digesters fall into two broad categories: household-scale biodigesters, and larger, centralised biodigesters.

Dome-type biodigester in Arusha, Tanzania [1]

Household-scale biodigesters are often seen as the most viable option for rural communities and households. These are generally small, with digesting chambers of volumes in the 4 to 13 cubic metres range. These installations will support the cooking needs of a rural household, as well as providing biogas for heating or lighting if required. Tailoring the size of the biogas system to the availability of feedstock for the household is critical for successful functioning of the system: studies have suggested 4-6 heads of cattle is a sustainable target if using agricultural wastes for feedstock, for an average-sized family of five. Individual biodigesters can produce sufficient gas for a single person on as little as 1 kg/day of feedstock.[2]

However, one of the primary limiting factors in the adoption of household biodigesters is financing and end-user capital constraints. Household-scale systems are still relatively expensive for the majority of rural developing-world users, and experience has shown that without the provision of credit facilities in biodigester programs, or government subsidies, adoption rates remain low.

Centralised biodigester systems offer a different set of benefits and challenges. Economies of scale are the major advantage: one centralised system can serve a medium-scale settlement or several small settlements, with a reduced burden for upfront capital costs and maintenance compared to the same service with household-scale systems, in the range of US$100 – 500 per household. The Chinese National Biogas Program [which will be the subject of a later blog in this series], has been the major implementer of centralised systems, however experience also exists in other South-East Asian countries. Examples of this can be found in the centralised digesters built near Beijing to service rural villages. For an upfront cost of ~US$1 million, 1900 households are serviced through each centralised digester, with biogas available at a 20% discount compared to market LPG prices, and the additional benefit of organic effluent being made available for sale to the local farms feeding the digester.[2] The major constraint, however, to wider dissemination of centralised systems is the significantly higher up-front capital costs. This puts the systems out of reach for private users in the majority of cases, government-scale implementation is more common.

Socio-political conditions are another factor that has proved a constraint in biogas implementation projects in developing countries. Centralised biogas digesters can have difficulty with biogas supply to end-users, particularly given the poor economics of installing piped gas supply in small rural communities. Communal cooking facilities have been a solution to this problem in theory, however experience from India suggests that collective cooking is not desired by the rural population, and this has impacted upon the success of centralised digester installations. As with dissemination programs for clean cookstoves, biogas installations need to take into account the end-users needs and desires in design and installation for product use and performance.

The other posts in this series will cover the question of why biogas hasn’t succeeded in Sub-Saharan Africa as it has in South-East Asia, the maintenance question for biogas services, and lessons from the Chinese National Biogas Program.

– Xavier Lemaire & Daniel Kerr, UCL Energy Institute

[1] Laramee & Davis (2013) Economic and environmental impacts of domestic bio-digesters: Evidence from Arusha, Tanzania. http://dx.doi.org/10.1016/j.esd.2013.02.001

[2] Hojnacki et al, MIT (2011) Biodigester Global Case Studies. Available at: https://colab.mit.edu/sites/default/files/D_Lab_Waste_Biodigester_Case_Studies_Report.pdf

STEPs Presentation at the Bengaluru SE4All Workshop

A presentation on ‘Rethinking Finance and Business Approaches for Energy Access’ was made by me at the Third International Triennial Workshop on Sustainable Energy For All : Transforming Commitments into Action. The workshop was organised by the NAM Science & Technology Centre and Society for Energy Managers (SEEM) at the green Christ University Campus at Kengeri, Bangalore during the period 21-24 February 2014. This was the third energy-related international event organised by NAM S&T Centre and SEEM and brought together a large number of energy sector experts from about 20 countries including 15 developing countries and several of them  from Asia and Africa. The five countries participating from Sub-Saharan Africa were from Nigeria, Mauritius, Tanzania, Zambia, and Zimbabwe. The workshop also adopted the Bengaluru declaration on sustainable energy for all.

An expert talk was given by me, presenting the current business and finance approaches to energy access and highlighting some of the new and emerging thinking in this space. The talk exhorted equal priority to thermal energy access alongside electricity and also encouraged the use of Public-Private Partnerships (PPPs). Several energy service business models such as PPPs, PAYG and emerging financing concepts such as crowdfunding, cryptocurrency etc were also presented. The STEPs project and its plans were also presented alongside a number of other progressive finance/business frameworks.. The interventions from the floor showed a keen interest in the issues of finance & business.

So the participation at the third triennial workshop on SE4All provided an opportunity to highlight the challenges with business and finance models in energy access and to encourage new approaches. The workshop also provided an opportunity to introduce the STEPs project, its objectives and plans to clean energy, energy access and development practitioners in Asian and African developing countries.

Dr Parthan presenting at the SE4All Workshop. Image: Sustainable Energy Associates

Rethinking Finance and Business Approaches for Energy Access – Presentation – Sustainable Energy Associates

Dr. Binu Parthan, SEA