Tag Archives: entrepreneurship

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.

ghstakeholdersmap

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]

enablingenvironment

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

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The Clean Cookstoves Value Chain and Opportunities for Business

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

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

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

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

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

– Daniel Kerr, UCL Energy Institute 

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

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

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

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

Clean Cooking Technologies and Dissemination: Growing Markets

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

cookstovegraph1

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

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

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

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

stovetech-combined-wood-charcoal-ics

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

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

cookstove-blog-table-1

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

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

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

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

– Daniel Kerr, UCL Energy Institute

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

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

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

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

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

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

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

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

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

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

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

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

What Could the Energy Transition Be for Thermal Energy Services in the Global South

The STEPs project (Sustainable Thermal Energy Service Partnerships) funded by Dfid-DECC-EPSRC is about the design of public private partnerships for the provision of thermal energy services targeting the poorest in developing countries.  The STEPs research focuses on thermal energy services for households and small producers.  The following posts describe what the main needs are in terms of thermal energy services, and with which technologies they could be provided.

Households and small producers in developing countries have needs in terms of cooking, heating/cooling, refrigeration and drying which vary according to the geographical, socio-economic and cultural conditions found in their locations, and can be satisfied in a very different manner than in industrial countries.  Not only can the technologies used be different, but the entrepreneurial model which can help to disseminate these technologies is particular to the Global South: social entrepreneurs, cooperatives, informal groups or established small rural companies acting like utilities have to be involved.

The sustainability of their business models implies the need to find the right mix between different technologies and services provision adapted to the context they evolve in.

Cooking

Currently cooking in developing countries is mainly done using non-efficient cook stoves using traditional biomass (wood, charcoal) or fuels like coal or paraffin. More infrequently efficient cook stoves, bio-digesters or more rarely LPG (Liquefied Petroleum Gas) are used for cooking in rural areas.

Improved cook stoves have been tried to be disseminated for several decades now with mixed results. It seems cook stoves of all kind of shapes and made of all kind of materials have been conceived without being able to reach their intended market. Improved cook stoves fall broadly into two categories – cook stoves that use traditional wood fuels more efficiently, or cook stoves that use improved fuels such as unprocessed charcoal, briquettes or pelletised fuelwood.

600px-GIZ_Diversity_of_improved_cook_stoves_2011

A small selection of the diverse design options for clean cookstoves. Image credit: GIZ 

One of the aims of the STEPs project is to understand if public-private partnerships similar to the ones established for rural electrification could facilitate the dissemination on a very large scale of improved cook stoves. This is done by reviewing the (few) successful experiences of large-scale dissemination of improved cook stoves, for example the National Biogas Cookstoves Program (NBCP) in India (http://www.mnre.gov.in/schemes/decentralized-systems/national-biomass-cookstoves-initiative/), and determining how private business can take charge of the distribution and the marketing of improved cook stoves.

Another way of facilitating the energy transition in terms of cooking facilities is to encourage the use of LPG (Liquefied Petroleum Gas). LPG may not be a very low-carbon energy but it is considered a lot cleaner/less damaging for the environment and efficient than the use of traditional fuels. Unfortunately, the logistics of distribution in remote places makes it unaffordable for the poorest unless a program of subsidies is also implemented, which experiences show are difficult to target. For example, the Ghanaian LPG distribution and promotion program started in the 1990s, and continuing today, has experienced difficulties through cross-subsidising LPG, intended for cooking, through gasoline sales. This led to a rise in LPG transport use and conversions, particularly in urban taxis, skewing sales towards transport use and not rural cooking use as intended by the government program.

Bio-digesters can produce methane for cooking. This technology is widely disseminated in few countries like China or India, but not so much in sub-Saharan African countries. Various reasons have been invoked to explain this situation – low density of population/small size of holdings notably. It seems nevertheless than even if conditions may be less favourable in African countries than Asian countries, there could be specific services organised around collective use of bio-digesters (e.g. cooking in a school by collecting waste from a community).

There are two main approaches to household biodigester construction. The traditional technology is a dome-type biodigester, with the digesting chamber constructed from compacted earth or brick. These are cheap and easy to construct, but are prone to failure and require significant maintenance for good efficiencies. Modern household biodigesters are made from prefabricated plastic digesting chambers, which only require maintenance to maintain the digestion process, and are significantly more durable than the traditional type.

biodigester in cantonment

Biogas construction in cantonment (4971874669)” by SuSanA Secretariat – https://www.flickr.com/photos/gtzecosan/4971874669/. Licensed under CC BY 2.0 via Wikimedia Commons

africa biodigester

Prefabricated biodigester being installed in South Africa. Image: popularmechanics.co.za

agama biogas

Prefabricated biogas digester being constructed by AGAMA Bioenergy worker in South Africa. Image: Agama Biogas PRO via Youtube

Solar cooking and solar ovens are another technology that can be used for cooking in rural areas of developing countries. The Global South, and Sub-Saharan Africa in particular, generally has a good level of insolation for the use of solar technologies. Solar cooking technology however has struggled to find a foothold in Sub-Saharan African markets, and is at a low level of dissemination despite the maturity of the technology. A number of factors could be behind this, most notably the lack of convenience associated with solar cooking and the long cooking times and forward planning associated with using the technology.

ikiwaner solar oven 2008

A solar oven being demonstrated in Ghana. Credit: Ikiwaner / Licensed under CC BY 2.0 by Wikimedia Commons

– Xavier Lemaire & Daniel Kerr – UCL