Partnerships for Women’s Economic Empowerment through Clean Energy in Senegal

Access to energy in rural areas of Senegal is a persistent issue. Electrification rates in rural areas of the country can be as low as 4%, and over 89% of the population are still reliant on biomass fuels for thermal energy uses in the home, such as cooking. However, a number of barriers exist to addressing this situation, particularly for female entrepreneurs in the region: other commitments such as domestic work can hamper the amount of time available to establish a business, and technical, financial and organisational capacity is often low. Two non-profit organisations, ENERGIA and Energy4Impact, are partnering with local women entrepreneurs in rural areas of the country to improve energy access and reduce the burdens of unsustainable fuel use on families.

Energy 4 Impact with Women Entrepreneurs in Tambacounda, Senegal. Photo: Judith Quax, July 2017

In the rural Tambacounda region of the country, ENERGIA and Energy4Impact have been training women entrepreneurs to become sales agents for small solar home systems, solar lanterns and improved cookstoves. The organisations have taken an “eco-system” approach to the training, attempting to address the wide range of business, financial, capacity and gender-related barriers to developing women’s energy entrepreneurship as a whole. This has included partnerships with local manufacturers and suppliers to enable access to technologies, as well as business and financial training for entrepreneurs, and sensitising campaigns in the local area to enable homeowners to realise the benefit of engaging with women in the energy product space.

Currently, Energy 4 Impact is supporting 160 women entrepreneurs in Tambacounda to become sales agents of improved cookstoves and solar lanterns. From 2016 to 2017, these entrepreneurs sold 1,132 solar lanterns and 822 efficient biomass cookstoves, helping over 17,000 people access clean thermal energy.

However, the engagement in Senegal by the two non-profit organisations is not solely for the purpose of entrepreneur training. Co-benefits of improved energy access in the business space are also targeted. This is particularly being realised in improved access to solar refrigeration technologies for small-scale agri-businesses. Energy4Impact are partnering with two government organisations to offer technical training for women entrepreneurs in the agri-business sector to use solar refrigeration technologies to diversify their business. The NGO also engaged with private-sector suppliers of equipment to suggest suitable technologies scaled to the size of the women’s business needs. In addition, the NGO also engaged with agri-business owners directly to design and manage credit line mechanisms for leasing solar-powered technologies that could be repaid in instalments, enabling access to technologies on a monthly credit basis applicable to the entrepreneurs’ income.

Finally, the NGOs are partnering directly with women entrepreneurs in the Tambacounda region to offer small solar home systems on an innovative pay-as-you-go basis. This is being conducted in partnership with Boabab+, a social enterprise focusing on PAYG models for solar home systems and solar lanterns. Women entrepreneurs are being trained as distribution agents for the products, and can purchase solar home systems from the enterprise with a 25% down-payment, with the remaining 75% being repaid in three fortnightly instalments with zero interest. Clients are able to access one month’s electricity upon purchase of the system, with further payments able to be made on a daily, weekly or monthly basis through mobile money systems already existing in the region. This gives consumers the flexibility to pay for energy when they need it at a price point appropriate for them, while reducing the economic barriers for entrepreneurs to enter the sector through offering this flexible credit mechanism. The system has proven fairly successful: one entrepreneur in partnership with a local women’s group sold 152 solar lamps from 2016-2017, where they ordinarily would not have had the capital to even begin investing in the technology for sale.

– Daniel Kerr, UCL

References

ENERGIA (2018) Helping women entrepreneurs scale-up rural supply chains to reach last mile markets. Available at: http://www.energia.org/helping-women-entrepreneurs-scale-rural-supply-chains-reach-last-mile-markets/ [Accessed 11^th March 2018]

Energy4Impact (2018) Empowered women securing energy access in rural Senegal. Available at: https://www.energy4impact.org/news/empowered-women-securing-energy-access-rural-senegal [Accessed 11^th March 2018]

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]

Thermal Energy Services and Technology Neutrality

Dr Binu Parthan from Sustainable Energy Associates writes on technology neutrality in thermal energy services, and how this can approach can be used to further access to clean thermal energy.

When the STEPs project was conceived in late 2012 and early 2013, one of the key aspects we emphasised was the principle of technology neutrality. We thought it important to include all possible energy conversion and end-use technologies that can provide thermal energy for cooking, space heating and other household, commercial and industrial uses. We were always clear about the role of LPG as a thermal energy fuel and technology to be included. This was also one of the arguments we used to encourage a technology neutral approach to thermal energy to the projects eventual funders DfID and EPSRC. Once the research project started in early 2014 the role of electric cooking also emerged slowly as an option worth considering. During the global survey we carried out during 2014-15 it emerged that electricity was already being used for thermal purposes by some practitioners in several operating contexts. In early 2015, I visited the Mekar Sari cooperative at the Cinta Mekar 5P project in Indonesia to understand the workings of the 5P model – a blog about this visit available here. During this visit I came across the extensive use of electric rice cookers which were being used alongside LPG. Almost all houses in Cinta Mekar was using efficient rice cookers to prepare rice and keep it warm.

A Household at Cinta Mekar, Indonesia Cooking with an Electric Rice Cooker (Credits: Sustainable Energy Associates)

The questions around electric cooking started recurring again during 2015. In mid-2015, at the Asia Clean Energy Forum at ADB in Manila where we presented the STEPs model, there were some interesting discussions about the need to include all possible technologies for cooking, including LPG and electricity. Later in 2015, DfID and Evidence on Demand published three interesting reports on electric cooking using solar photovoltaics and batteries in the African context. One of these publications (Leach and Oduro, 2015) also highlighted that majority of cooking is being using electricity in advanced African countries such as South Africa. Later in 2015 while I was in Nepal I realised that electric cooking option was already promoted by Intermediate Technology (Now renamed Practical Action) over 25 years ago in the 1990s with micro-hydro projects in a village called Ghandruk. The project used electric storage cookers – Bijuli Dekhchis for electric cooking in Ghandruk. The experience with electric cooking in Nepal did not turn out to be a success and perhaps was an idea ahead of time. My efforts to contact the people who ran the project to learn from their experience with the technology wasn’t successful as many of them had moved on or retired.

Rice Cooker and Electric Kettle being used by Households at Barpak in Nepal (Credits: Bir Bahadur Ghale)

There has also been questions raised regarding the health benefits of efficient cookstoves such as the reduction of pulmonary diseases due to reduced indoor emissions from improved cookstoves. LPG based cooking offers significant indoor emission reductions and electric cooking produces no indoor pollution at all. A publication in the Lancet in late 2016, which was highlighted by the BBC seemed to indicate no significant health benefits as a result of efficient biomass stoves (Mortimer. 2017).  I also see a renewed interest in electric cooking again especially with the availability of electromagnetic induction cookers which are available at lower prices of about US$ 20 in many locations in the developing world. Efficiency of rice cookers have also improved and many of the efficient rice cookers now use electro-magnetic induction. Induction cookers are about 14% more efficient than ordinary electric cookers and are increasingly available globally at competitive prices.

In this context, I heard about Bir Bahadur Ghale, owner of Barpak Rural Electrification Pvt. Ltd in Nepal – a community owned mini-grid operated by micro-hydro. After several efforts and with support from Dipti Vaghela at the Micro-Hydro Power Network, I was able to meet with Bir in December 2016.  The experience of Barpak Micro Hydro with electric cooking has been quite impressive. The mini-grid powered by hydro has offered a lower off-peak tariff from 8 AM to 5 PM encouraging households to cook with electricity during this period. These efforts resulted in about 2/3^rd of the 1200 households served by the 133 kW hydro system now using electric cooking during the day. In addition the Barpak hydro also offers lower tariffs to industries during the day time, to encourage the use of electricity for productive uses. These efforts have resulted in the utilisation levels in the Barpak hydro to increase to 47% or 0.47 Plant Load Factor (PLF) which is almost 3 times the levels seen in similar hydro powered mini-grid systems in Nepal and elsewhere. Bir believes that the convenience of electric cooking, low-cost of cookers, reduction in drudgery of collecting firewood and the low off-peak tariffs offered by the Barpak hydro has been the reason behind the uptake of electric cooking. I believe this is a good approach which is valid in many locations around the world which addresses indoor air pollution, deforestation, provide a convenient and modern cooking alternative to households, especially women and improve the business viability of mini-grid operations. I am also beginning to notice more and more electric cooking appliances as I travel and recently in Laos I even see a shop which is specialising in electric cooking. So this market segment is getting quite interesting indeed with more product offerings that are affordable.

Electric Cooking Appliances for sale in Vientiane, Laos (Credits: Sustainable Energy Associates)

Also in a recent visit in summer of 207 to a village in the Ayeyarwady delta in Myanmar electrified by a gasifier powered mini-grid, I was able to see the widespread use of electric rice cookers and electric frying pans on a regular basis in homes. What was interesting was that despite the high local electricity tariffs at $ 0.44/kWh, the households preferring electric cooking to biomass based cooking.

Electric Cooking in rural Myanmar (Credits: Sustainable Energy Associates)

As more un-electrified areas get electrified and as cost of cooking with firewood and charcoal increases, we would expect LPG and electricity to increasingly displace biomass stoves. Where conditions for promotion of LPG exist such as local availability of natural gas, existence of LPG distribution networks, government programmes that offset the cost of access (like in Indonesia) etc. we are likely to see increased uptake of LPG. However many countries to do have domestic natural gas reserves and establishing a nation-wide LPG distribution network is capital intensive and government finances are often stretched. Therefore there is a tendency for LPG distribution networks to be limited to urban areas where there is a high concentration of users. Electric induction cooking can be an alternative in rural and decentralised areas which are electrified where products such as induction cooktops and electric rice cookers are available in the markets. With the right regulatory instruments that ensure tariffs that encourage electric cooking and electric space heating and with efficient and low-cost induction cooking devices, the share of electric cooking in developing countries will increase. While this does not call for shifting the focus away from efficient biomass cookstoves, the option of electric cooking needs to be in the menu of options for practitioners, development agencies and enterprises active in the energy access space. We will also need to think in terms of programme frameworks, financing, policy & regulation that promotes efficient electric cooking alongside LPG, efficient biomass stoves and other options.

Dr. Binu Parthan

References

Matthew Leach and Richard Oduro 2015, Preliminary design and analysis of a proposed solar and battery electric cooking concept: costs and pricing, Evidence on Demand, DOI: http://dx.doi.org/10.12774/eod_cr.november2015.leachm

Mortimer, K et al, 2017, A cleaner burning biomass-fuelled cookstove intervention toprevent pneumonia in children under 5 years old in rural Malawi (the Cooking and Pneumonia Study): a cluster randomised controlled trial, Lancet, 389: 167–75

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/

Kitonyoni Solar Mini-grid and Integration of Thermal Energy Services

Binu Parthan from SEA writes on his recent visit to the Kitonyoni Solar Mini-Grid project, part of the University of Southampton’s efforts for the Energy for Development (E4D) project they lead.

The solar mini-grid at Kitonyoni near Machakos in Makueni County was financed by the UK government and commissioned in 2012 by the STEPs partner The Sustainable Energy Research Group at University of Southampton. The Kitonyoni Solar mini-grid is managed by Makueni County Solar Energy Co-op Society Ltd which is owned and managed by the community.

Management of the Solar Electric Cooperative and manager of the mini-grid business. Image: Sustainable Energy Associates

In July 2016, I travelled to Kitonyoni to visit the solar min-grid and meet with the community. While at Kitonyoni, I met with Joseph, Monicah, William and Shadrack from the management Makueni County Solar Energy Co-op Society Ltd and also with Stephen, the manager of the mini-grid and energy service business. With the community leaders and the manager of the mini-grid, I visited several businesses and households that were consuming electricity from the cooperative to understand the business model. The solar electric cooperative seems to be professionally managed and financially sustainable. They operate on a for-profit business basis and the financial accounts reveal that the operation is financially sustainable. The electricity cooperative uses a pre-paid card system for electricity sales and payments which seems to be working well. The electricity consumers are more conscious of energy use and payments and the cooperative is also happy with the upfront collections. The number of shops in the Kitonyoni market has significantly increased since the solar mini-grid was commissioned and the value of the land in the area has also almost tripled. However, the tariff charged by the solar electric cooperative is considerably higher than the public electricity utility but the community has been willing to pay a higher tariff due to better availability and reliability.

One of the new businesses established in the Kitonyoni market powered by the solar mini-grid. Image: Sustainable Energy Associates/span>

STEPs project team at University of Southampton had carried out a survey to examine the possibility of integrating thermal energy services into the existing electrical energy service business model. The results showed that 90% of the households in Kitonyoni use firewood for cooking which is available without cost to the community (Bahaj and Kanani, 2016). While the households spends over 5 hours to gather firewood, there is limited interest in switching to cleaner cooking options such as LPG which involve additional financial expenditure. The opportunity to integrate a solar thermal energy service along with the electricity service seems rather limited due to limited scope and demand for commercial fuels. The firewood is available freely in the area and LPG distribution networks are not available in the village.  Therefore currently, there does not seem to be a business case for introduction of an LPG franchise model and integrate the model into the solar electricity business. However some thoughts that I shared with the community were:

Since households and restaurants are cooking in separate rooms than their houses and as there is a preference for community schemes, will a community electric cooking scheme succeed? This may be relevant as on most days the battery bank of the solar mini-grid seems to be fully charged in the early afternoon and this could provide an opportunity for a central cluster of electric induction cookers which people can use to cook on a pay per use basis(similar to battery charging) to the cooperative.

It is possible that people may opt for efficient Cookstoves/Jikos if available on a hire-purchase/PAYG basis and reduce the amount of firewood to be collected resulting in time savings. An efficient Jiko will cost 45 $ which could be offered on a loan basis with daily/weekly/monthly payments to people by the cooperative for 6 months to 1 year tenure. These funds could be revolved over the time period to reach other members.

A differential tariff with a lower tier-tariff for the shops and establishments that use electricity during the day will likely improve the revenue model of the cooperative and can increase the utilisation levels. Such a tariff regime could allow the use of induction electric cookers at households during the day. Such a development could result in increasing sales and revenue and improving the business viability.

Cooking using firewood and a metallic stove in Kitonyoni. Image: Sustainable Energy Associates

Therefore the technology options for thermal energy and cooking in Kitonyoni is electric cooking or efficient Cookstoves with the possible business models of pay-per-use or hire-purchase respectively. A differential tariff with lower off-peak tariff could also allow electric cooking during the day time and improve the business model. These options are not entirely obvious and needs to be investigated and defined. This approach will certainly face stiff competition from free biomass availability and availability of free time for fire-wood collection.

Dr. Binu Parthan

Partnerships and Opportunities for Clean Cookstoves Support from Governments

This post aims to discuss where the opportunities may lie for governments and private sector organisations to enter partnerships for clean cookstoves market development. Both public and private sector actors have advantages and disadvantages in the approaches generally taken by such bodies in the clean cookstoves market space.

Map of stakeholders in the clean cookstoves sector in Ghana. Image: http://cleancookstoves.org/binary-data/RESOURCE/file/000/000/311-1.pdf

Public-sector operations have the ability to achieve scale quickly and effectively, however are often lacking in terms of lasting presences in markets due to the financing models (direct dissemination, direct subsidy) used most commonly in these circumstances. These models tend to lead to consumers failing to maintain use of disseminated equipment, leading to a shrinking of the market presence for cookstoves technologies in the longer term. Private sector market actors, conversely, can take longer to achieve scale in their operations, and have to contend with acquiring financing, either through their operations or donors, to continue maintaining their market presence.

Hence, there are significant, proven opportunities for the combination of approaches. Public-private partnerships (PPPs) have the potential to alleviate the negative aspects of both public and private approaches, with private sector actors operating as delivery agents for overarching public-sector objectives, or public sector operators supporting the development of a functioning private market.

The development and marketization of the Sri Lankan clean cookstoves sector, with donor agencies, the state electricity agency, and private sector companies all collaborating to develop a functioning private cookstoves market, is a good example of how PPPs can achieve successful results in the clean cookstoves market context. Support from the Ceylon Electricity Board (CEB) in distributing clean cookstoves to their existing customers allowed the development of functioning private production enterprises across the country, with a guaranteed market for their produce. Local production of clay stove liners is still continuing in the country. [1]

Steps in improving the enabling environment for clean cookstoves. [2]

The creation of an enabling environment for new businesses to enter the clean cookstoves market is another crucial role of governments in developing a clean cookstoves sector. The above image shows a number of pertinent steps that can be taken to do this. Starting at a consumer level, raising awareness of the benefits of a clean cookstove technology, through to allowing small and large businesses to access financing to scale their operations, and enabling credit facilities either through public or commercial banks, governments have the potential to significantly contribute to the ease of starting and maintaining a functioning private clean cookstoves market.

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

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

The Emerging Impacts and Evolving Development Framework for Thermal Energy Services

Binu Parthan of Sustainable Energy Associates writes on developmental frameworks and the emerging sphere of thermal energy services in them.

When the STEPs project received the nod from EPSRC and DfID in 2012, energy access in developing countries was all about electrification and Cookstoves. The assumption was that if you provide an efficient biomass Cookstove to a household and the thermal energy access problem was solved. So lot of the focus in 2012 was on cooking and Cookstoves. Efforts then were essentially focussed on developing more efficient Cookstoves and reducing the cost of Cookstoves. In addition to Biomass Cookstoves, there were also efforts which were focussed on solar cooking focussed. So the space was divided between different technologies and limited to biomass and solar energy technologies.

When STEPs project was proposed in 2012, where we encouraged to consider thermal energy as a service for cooking, space and water heating and applications, the typical reaction was that it was a just another Cookstoves project. Often the challenge was that people – both practitioners and researchers had not heard about the concept and were often quick to dismiss it. Another challenge was when we advocated technology neutrality meaning that the thermal energy services may be delivered through renewables, LPG or electricity there was certainly a lot of discomfort as if was always been about Cookstoves and technologies. There were also suggestions that cooking technologies should be limited to renewable energy and LPG was fossil fuel based and was not an option for developing countries etc.

A traditional wood stove for space heating in Lesotho. Image Credit: Sustainable Energy Associates

The STEPs project team has since made a number of efforts to increase awareness about the need to look at thermal energy as a service rather than a product. We spoke at several events that had linkages to the energy access agenda and targeting development agencies and governments. Our team reviewed and commented on the Sustainable Development Goal (SDG) drafts and objected to the emphasis on Cookstoves in the earlier drafts. We also emphasised the need for considering space heating and sanitation energy needs and the need for technology neutrality.

We also carried out a questionnaire survey during second half of 2014 to early 2015 with 2 objectives 1) to popularise the project and the idea of thermal energy services and 2) to gather data for the project outputs. The questionnaires that were sent out to 64 experts drawn from development agencies, practitioners and researchers with response collected through Survey Monkey, response forms and through phone interviews. The STEPs team also held discussions with two South African rural energy enterprises to encourage them to consider an energy service offering. We reviewed and commented on the Global Tracking Framework (GTF) and the multi-tier framework for energy access for the UN’s initiative on Sustainable Energy for All (SE4All).

We also continued to look for opportunities to pilot the STEPs model in an actual implementation context and continued our discussions with United Nations Development Programme (UNDP) and Lesotho. It was important for us that STEPs as an effort to go beyond a collection of publications and outputs to an effort which will make a tangible impact on public policy as well as thermal energy use in developing countries.

Now with the project in its third and final year we are seeing the impact of the some of our persistent efforts:

• The current and final text and the background narrative on SDG 7 on energy talks about cooking and heating and the targets for SDG 7 is technology neutral, silent on technologies and talks about energy services. The final target reads as ‘By 2030, ensure universal access to affordable, reliable and modern energy services’. As the global development agenda on energy during 2016-2030 will be guided by the SDG framework, this will allow a level playing ground for thermal energy services and hopefully attract more resources to support thermal energy services in developing countries;

• The SE4All GTF update in 2015 is more technology neutral and includes space heating. The multi-tier frameworks also place an emphasis on service, fuel supply etc. and a new multi-tier framework has been included for space heating. As the GTF and multi-tier framework is likely to be used by World Bank and other development agencies for energy access projects/programmes, this may support the implementation of more thermal energy access initiatives.

• We have had one South African private enterprise – AES requesting the project for business advice on offering an energy service business proposition;

• Responses from 32 out of 64 organisations to the questionnaire survey including development agencies such as World Bank, IFC, UNIDO, UN-ESCAP, GIZ practitioners such as NuRa Energy, Practical Action, Selco, Simpa, BGF, S3IDF, ECS, ACE, practitioner networks such as GVEP, GACC, Ashden and energy research organisations such as IIASA, Imperial College, Stellenbosch University, TERI etc and the World LPG Association. Many of these organisations expressed a desire to be updated on the STEPs project details.

• Although we faced delays in implementation with the UNDP Lesotho project where we wanted to integrate the STEPs model for thermal energy services, we have managed to integrate the STEPs thermal energy services model into a much larger project in Afghanistan. The project which began implementation in 2016, will implement the thermal energy services model in about 200 villages benefitting about 20,000 households;

During this final year in 2016, we will continue to focus on disseminating results from the research and deepening our influence and impacts with actual on the ground projects.

– Binu Parthan, SEA