Pay-As-You-Go (PAYG) Models for Cooking Fuels – Innovation for the Poorest Consumers

Daniel Kerr from UCL writes on innovative pay-as-you-go models in use for cooking energy service provision.

In the last 2-3 years, a handful of thermal energy services companies in the developing world, specifically in Sub-Saharan African countries, have begun to take advantage of pay-as-you-go (PAYG) consumer financing models in their energy businesses. These models have significant advantages in comparison to direct purchase, hire-purchase or micro-credit models when dealing with the poorest consumers in societies, for example those living in informal settlements in urban or rural areas. Some companies are taking advantage of these models for selling clean cooking products, such as stoves themselves, whereas others are using this payment structure for cooking fuels.

One company in Kenya taking advantage of these innovations is KOKO Networks. This organisation seeks to offer an integrated neighbourhood-level clean cooking solution with smart technology, via their KOKO points, cloud-connected commerce hubs where consumers and vendors can come to refill the products on sale or make purchases. Currently the company is offering the SmartCook product at these sales points, which is a two-burner clean cookstove with an integrated fuel canister. The fuel used is marketed as Mafuta smart, which is an ethanol fuel derived from molasses manufacture.

What is particularly innovative about this system is that the sales hubs for the company have in the automated purchasing stations for the fuel for the cookstove system. These dispensers refill the provided fuel canister (known as a kibuya smart canister) with the cookstove system, and customers can refill their canister from as little as KHS30 (US$0.29) at a time, offering significant flexibility for the consumer, without the “poor people’s premium” (higher per-unit prices charged for small amounts of consumable products) seen in other commodities. The company operates on a concession business model, with interested parties either setting up their own fuel supply arrangements for the fuel to service their settlement, or purchasing equipment and fuels from KOKO themselves.

KOKO Networks KOKOPoint in store in Nairobi. Customers can purchase a stove or replacement fuel from the kiosk. Image: http://www.globalhearthworks.org/koko/

Other companies in Kenya are taking advantage of PAYG models to enable greater access to their products and services as well. In Nairobi, PayGo Energy is a distribution service for LPG fuels that is using pay-as-you-go services to bring LPG fuel access to a greater number of consumers. The service begins with the installation of an LPG stove, cylinder and smart fuel meter in the home. This smart meter is at the core of the service the company offers, as it automatically communicates to the company when the fuel level is running low, whereupon the company arranges delivery of a replacement, full cylinder to the household. In addition, the system support mobile payments and ordering of fuel replacements, allowing customers to purchase as little as a day’s worth of LPG (around US$0.50) at a time. This logistics system has been adapted to informal settlements, allowing uninterrupted supply to households in informal settlements via motorcycle.

PayGo Energy stove and fuel canister in a house in Kenya. Image: https://blog.catalyst-fund.org/delivering-modern-energy-in-kenya-building-on-mobile-money-eb0eba1960da

Other organisations are beginning to see the benefits of integrating mobile payment technology with a pay-as-you-go fuel payments model for energy services. KopaGas in Tanzania are another company using smart LPG metering to minimize the challenges posed by last-mile distribution which are typical in providing thermal energy services to communities. This smart gas meter system allows the company to deliver cylinder filling services or replacement full cylinders to communities efficiently, minimising distribution costs. In addition, the company offers a pay-as-you-go service for LPG fuel, as well as offering pay-over-time services for both fuels and cooking equipment. KopaGas has been partnering with EnviroFit, an established LPG equipment and fuel distributor in East and West Africa, in order to scale their service reach.

Through these cases, the market opportunity for offering clean cooking fuels and technologies as an energy service, using innovative fuel and equipment payment models to enable access for the widest range of consumers, can be clearly demonstrated. KOKO Services and KopaGas/PayGo Energy may be using different technology options, but the commonalities in approach exist: offering consumers the ability to purchase small amounts of fuel at a time, via a convenient payment method (either via mobile, at a central filling station, or both), and in the case of the LPG companies, offering consumers the option of household delivery. Through this combination of factors, these companies are breaking the traditional barriers to household thermal energy service delivery, allowing consumers who previously would not have had the financial capacity to afford modern cooking fuels the ability to access these technologies.

– Daniel Kerr, UCL Energy Institute

References

Global Alliance of Clean Cookstoves (2017) “Pay-as-you-go” technology to boost access to cooking fuel. Available at: http://cleancookstoves.org/about/news/05-30-2017–pay-as-you-go-technology-to-boost-access-to-cooking-fuel.html

KOKO Networks Home: http://kokonetworks.com/

PayGo Energy Home: https://www.paygoenergy.org/

KopaGas Home: https://www.kopagas.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

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

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

Why Isn’t There Greater Adoption of Biogas Technologies in Sub-Saharan Africa?

There are issues surrounding the lack of willingness to finance biodigester projects at all scales in many SSA countries particularly at the household level, lack of financial arrangements for poorer households where technology is most viable, prevailing climatic conditions beneficial but socio-economic conditions (particularly availability of feedstock and financial capacity of rural users) can be problematic.

Household-scale biodigesters can be an effective solution to providing thermal energy services to rural poor communities in the developing world. However, successful examples of biodigester programs in the past at a government or development-agency scale have mostly been confined to China, India and South-East Asia more widely. Notably, there has been a distinct lack of experience of successful biogas projects in Sub-Saharan Africa. The STEPs research project aims to address some of the reasons behind this, and propose potential solutions.

In theory, the prevailing conditions in Sub-Saharan African countries are mostly beneficial for the introduction of biogas digesters. Climatic conditions, on the whole, are suitably warm, with minimal cold periods to impact digester efficiency. In addition, target users are in abundance in rural areas, if considering the local feedstock regime. Small cattle farming is prevalent in a number of SSA countries, and subsistence farmers in rural areas often keep a small head of cattle. Given also the distributed nature of rural populations in a number of SSA countries (particularly, for example, in Eastern South Africa), household-scale biodigesters are an excellent solution for providing thermal energy services to households.

Potential uses for biogas and waste products. Sovacool, Kryman & Smith (2015) Scaling and commercializing mobile biogas systems in Kenya: A qualitative pilot study. Renewable Energy, Vol. 75, pp 115-125, http://dx.doi.org/10.1016/j.renene.2014.10.070

However, the lack of successful experience of biogas dissemination programs or businesses can be attributed to a number of factors, first and foremost of which is the cost of biodigesters (ranging from US$30 for a rudimentary drum-type system to over US$700 for a larger household system) [1] [2], and the lack of credit facilities/service regimes to enable access to the technology for the poorest consumers. Biodigester technology still represents a significant upfront cost to a typical rural household, and micro-credit services for clean energy technologies are still in their infancy in SSA countries, with some successful experiences in countries like Kenya or South Africa for solar home lighting or electricity systems in Kenya for example, but little widespread knowledge.

This lack of end-user credit is mirrored in a general lack of energy service companies or institutions offering biodigester services, with the cost issue again a driving factor behind this. Given how critical the maintenance factor is in biodigester installations (an issue which will be explored in the next blog), this lack of service companies, integrating credit or fee-for-service business models with a maintenance and servicing regime, has hampered uptake significantly in the region. The final negative factor is in fact the converse of an advantage: whilst some households will have suitable feedstock availability, compared to average heads of livestock or agricultural waste availability in South-East Asia, SSA has a much lower proportion of households with viable feedstock availabilities. Targeting consumers and areas where feedstock regimes are good is a critical step in ensuring the success of programs or business around biogas digesters in SSA.[2]

The next post in this series will investigate maintenance of biodigesters, and the necessity of maintenance and service arrangements with end-users to ensure efficient and successful operation of biodigesters.

– Xavier Lemaire & Daniel Kerr, UCL Energy Institute

[1] 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

[2] Raha, Mahanta and Clarke (2014) The implementation of decentralised biogas plants in Assam, NE India: The impact and effectiveness of the National Biogas and Manure Management Programme. Energy Policy, Vol. 68, pp. 80-91

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

What Could The Energy Transition Be For Thermal Energy Services in the Global South – Part 3

Following our previous post on heating, this last post will investigate other energy service needs linked notably to farming activities.

Refrigeration/Drying

Refrigeration in developing countries in remote areas is rarely found except for specific needs like to keep vaccines for health centres. A number of possibilities exist to provide refrigeration with LPG, with passive solar, and again using ground-source heat pumps, but it seems solar PV is the most economical one. Various attempts have been made at renewable refrigeration over the past 30 years, predominantly focusing on solar collector designs, although photovoltaic vapour compression systems are the most commonly found for vaccine refrigeration. The high cost of these systems can often be justified by the importance of the application.

Larger refrigeration systems based on solar collection/kerosene/LPG power using different absorption refrigeration cycles (for example the Platen-Munters ammonia-water-hydrogen continuous diffusion absorption cycle) have been tested for ice-making in developing countries, but the lack of constant heat sources in renewably-powered systems has made reliability and efficiency a concern. Alternatives do exist to LPG-powered refrigeration in the form of solar refrigeration however, and with the current global lowering of photovoltaic and other solar components, the technology is becoming more cost-effective and viable to small entrepreneurs.

Platen-Munters absorption refrigeration system and cycle. Image – centrogalileo.it

Drying is to be found in agriculture, but not at a small scale for individual households. Tray design solar dryers can be useful for small agricultural businesses to increase productivity, and are often easy to construct from locally-sourced materials. Updraft-style solar dryers are more complex from a design perspective, requiring specific attention to be paid to air flows and moisture extraction from the heating areas.

Solar drying for chilli pepper crop in Peru, with locally-produced equipment. Image: Carlos Bertello, GIZ EnDev Peru.

Other Agricultural Uses

Milk pasteurisation is a critical issue for dairy farmers in the developing world. It has been estimated that over 50% of an average rural dairy farmer’s milk crop in Kenya will spoil before it has been sold, which has a severely detrimental effect on their livelihood and income generation. Modern pasteurisation equipment using steam boilers and batch-type pasteurisers can significantly increase output and income from a rural dairy farm in the developing world.

These steam boilers can be renewably powered, for example through biomass from animal/crop waste. Low-temperature (70-80°C) water can be substituted for steam in the pasteurisation process with only slight plant modifications, and this allows the potential for greater renewable energy use in the process, for example through flat-plate solar collector water heating, or cogeneration/recuperation from electricity generation or refrigeration equipment condensers. Whilst renewable pasteurisation technology has not been a focus of many organisations, the FAO have produced a report on the potential uses and processes for the technology, which is available here (http://www.fao.org/docrep/004/t0515e/T0515E03.htm).

Potential for novel pasteurisation technologies in the developing world, to be powered by renewable electricity from solar or biomass digesters. Image: Openideo, Sarah Rizk, Stanford University.

In conclusion of this series of three posts, there exists vast potential over the wide range of available thermal energy services for the residential, industry and commercial sectors, notably in the Global South in general, and Sub-Saharan Africa specifically. The STEPs project will specifically be working most on the services that appear most viable in the Sub-Saharan African context: cooking/heating services for household needs, and low-temperature hot water production for households. The need for sustainable cooking and household thermal energy is a pressing one, and the STEPs project, through investigating a technology-neutral approach to thermal energy services and business, hopes to address this need.

– Xavier Lemaire & Daniel Kerr – UCL

The ‘Real 5P Model’ in Cinta Mekar

Binu Parthan from SEA writes on the implementation of a pro-poor public-private partnership (5P) model for micro-hydropower in Indonesia.

I first heard about the 5P model or the Pro-Poor-Public-Private-Partnership in 2012 when I was in the mountain kingdom of Lesotho. The UN’s Economic Commission for Africa were scoping for an energy centre to be run by a cooperative as a 5P model.  I found the idea of PPPs in rural energy that focused on poverty alleviation quite compelling in the context of the rural energy work I was doing at the time. This approach was reflected in the Lesotho Energy Alternatives Programme (LEAP) that I developed for UNDP and the Sustainable Thermal Energy Partnerships (STEPs) project that Xavier Lemaire of UCL Energy Institute and I developed with during 2012-2013. Fast forward 2 years and the STEPs project is generously funded by UK Aid and on its way, and while responding to the baseline study on the STEPs project, I hear from Hongpeng Liu and Deanna Morris at the Energy Division of UN’s Economic and Social Commission for Asia-Pacific (UN-ESCAP) about the original 5P model which has been working for over 10 years in Cinta Mekar, Indonesia.

With kind support from Tri Mumpuni of People Centred Business and Economic Institute (IBEKA) (who incidentally is a recipient of Magsaysay award for her work on hydro power for rural electrification), weeks later I find my way to Cinta Mekar, a relatively remote hilly village about 3 hours drive from Jakarta. The Cooperative at Cinta Mekar – Makar Sari is headed by a diminutive Yuyun Yunegsih, a grandmother of three who was elected a few years ago by the 450 members of the cooperative. The cooperative manages the 120 kW hydro power plant which was commissioned in 2003. The investment in the hydro-mechanical and electro-mechanical equipment and the building materials were financed 50:50 by UN-ESCAP and a private company Hidropiranti. The facilitation was by IBEKA and the members of the community and cooperatives contributed labour and local materials for civil construction in a normal PPP mode. Today after 12 years the hydro power system is still working well and generating and selling electricity to the local utility – PLN at slightly over US cents 4/kWh. 40% of the $650-$1100 monthly revenues go to Hydropiranti and 40% to Mekar Sari cooperative while 20% is set aside for maintenance, repairs and replacement.

The Mekar Sari cooperative has done a number of impressive ‘pro-poor’ initiatives over the years with its share of the revenues. It has provided financial assistance to households which could not afford to obtain an electricity connection. The cooperative also provides scholarships to 360 kids from the community, provides a land fund for members who do not have land holdings, provides an allowance for women in the community to cover childbirth related expenses and also pays an allowance to older members in the community. It has plans to construct public toilets, drinking water fountains etc. all of which seems very impressive. This is an impressive ‘pro-poor’ element that I have not seen in energy projects in general. I have seen impressive pro-poor energy initiatives driven by visionary and charismatic individuals but not by organisations for such a long duration and consistent track-record.

While the social development and pro-poor schemes have been very impressive, the business side has been slightly less impressive. The cooperative has not been successful in renegotiating in higher off-take tariffs in the power purchase agreement with PLN which pays almost a three times higher tariff for similar community hydro plants. A major investment in a manufacturing facility to make gluten-free banana flour which would have employed 10 people have not been successful and lies largely unutilised as the supply chain and market prospects were not investigated properly. It’s possible that the cooperative may have benefitted from some hard-nosed business advice. However the initiative can be considered a notable success in establishing a technical and management solution at an institutional level which has worked for over 12 years and has continued to be profitable and having driven social development in the community.

From the STEPs project perspective it was interesting to see that almost all the electrified community was using LP Gas or gathering wood from the forests for cooking, thus affirming our view that the thermal energy aspect is often overlooked and left to individual households to solve. What was interesting was also that many households which could afford were using electric rice cookers for cooking the main staple food, and efficient electric cooking is something STEPs hasn’t paid much attention. For the STEPs project plans, 5P model which combines private sector quality, efficiency and investments with public and community investment and participation, with community organisations managing social benefits and which combines both electricity and gas supply could indeed be a better model economically and socially. The question whether the institutionalised community leadership in Cinta Mekar can be replicated elsewhere remains. After my visit I asked Yuyun what the cooperatives biggest challenge was and contrary to what I expected it turned out to be the efforts by the local government to take over the cooperative. So while technical, economic and social challenges can be overcome in rural energy services, political challenges often pose a greater risk to sustainability.

– Binu Parthan, SEA

Yuyun Yunegsih at the Cinta Mekar 5P Hydro Power Plant. Image: Sustainable Energy Associates

A Man and an Island Called Pediatorkope

Dr Binu Parthan from Sustainable Energy Associates writes on his recent visit to Pediatorkope in Ghana.

The man was old and frail but had a commanding presence and a strong voice despite needing a walking stick to move around. I suspect that he was in his late 80s or early 90s but looked a lot younger, was strategic and spoke intelligently. His name was Chief Nene Pediatorkope IV – the supreme chief of the island of Pediatorkope in Ghana whom I met last week.

Pediatorkope is an island in the Volta River inhabited by agricultural and riparian fishing communities. After the Akosombo dam was built in 1966, water levels downstream decreased significantly and with it the fish catch also dropped just like the water level. Many of the men left the village moving upstream to continue fishing or migrated to nearby cities to find other jobs. There is still limited amounts of agriculture and fishing in the Island but more at a subsistence level. The island now has a government supported school and a health centre but the houses do not have electricity or water supply. Once darkness sets in, the village life literally comes to an end. Some of the wealthier households have either a solar home system or a battery power pack, primarily for lighting, phone charging and for powering radios or televisions. Those with the battery power pack recharge their batteries periodically at the village solar kiosk operated by an NGO – Empower Playgrounds. Income from agriculture and fishing has also dwindled over time due lack of irrigation and absence of a cold storage.

The situation in Pediatorkope where absence of energy constrains social and economic development is very similar to the situation in remote communities I have seen. Availability of modern energy allows such villages to irrigate fields which are not cultivated, have cold rooms and freezers to store poultry, milk and fish and also find other productive uses for energy. This also allows children to read and study in the evenings and have shops and markets open into late evening. The Chief was very sure that the Pediatorkope island community will grow from strength to strength once there was energy supply.

The village also had some feedback on the way rural energy programmes should be implemented. Rather than government institutions installing solar home systems or street lights which fail in a matter of time, their preference was for the energy to be delivered as a service to them for which they will pay. What the villagers were willing to pay was the avoided cost of what they were already paying for dry cell batteries for torches. They also did not want the community themselves to manage the energy systems as they thought the social compulsions would result in inadequate revenue generation and eventual failure. They wanted the systems to be managed by professional enterprises and that people in Pediatorkope were available to be employed by such companies.

For me it was interesting to hear people preferring paid energy service over hardware donations, like I have heard in the Sunderbans villages in India few years ago. It was also interesting to hear that they also wanted an external enterprise to manage the service arrangements like I have found out in Mokhotlong in Lesotho last year. I can see an increasing desire in remote rural village communities to received energy services than products and pay for these. This will be one of the issues that the STEPs project will seek to understand better and provide new approaches and solutions.

Once back in Accra, I spoke to my friend Wisdom who is the Director at the Ministry of Energy about the island and its electricity needs. Wisdom thought that it should be possible to get grid electricity to the village through overhead cables or a mini-grid system to meet the household and productive needs in the village.  Either way, I do hope that Pediatorkope will be electrified soon as part of the government’s rural electrification efforts. Next time someone visits Pediatorkope, I hope they will be able to see a more prosperous island, where men stay on in the village, children doing better academically and agriculture and commerce prospering.

– Binu Parthan, SEA

Chief Nene Pediatorkope IV on Pediatorkope Island – Image: Sustainable Energy Associates

Second STEPs Network Meeting – KwaMbonambi, South Africa, 28-30 October 2014

The second STEPs network meeting was held in KwaMbonambi, South Africa from the 28^th – 30^th October 2014. The purpose of the meeting was to address the current status of the project and determine next steps, as well as take the opportunity to both meet local representatives from South African electricity and thermal off-grid concessionaires, and visit the operations of local concessionaires for fieldwork, which will be described in a later post on this blog.

The first day of the meeting saw a great deal of discussion among project partners as to the way forward for the STEPs project. Primary discussion focused around the construction of the STEPs model, focusing on five main aspects: institutional arrangements, business/enterprise models, financing, technology options, and policy/regulation. The project will look to test a number underlying assumptions for the sustainability of thermal energy service businesses, for example operating margins (in the 50-70% range), and the importance of using public sector clients as anchor consumers in a thermal energy business customer base.

Discussions were had on the most relevant technologies to target with STEPs. Key technologies are improved cookstoves, LPG for cooking/refrigeration, and household biogas installations, primarily for the successes seen in previous projects using these technologies. These include the Ghanaian experience in LPG stove dissemination via the government, and the vast scale of the Chinese domestic biomass gasifier program. However, challenges exist to the uptake of all these, including cultural contexts for cooking (meaning stove design needs to take social factors into account), as well as the difficulty in acquiring biomass feedstocks in some country contexts, for example Sub-Saharan/Southern Africa.

Discussion was also had about the most relevant financial and management models to target under the STEPs model, as well as which technologies these models applied best to. For example, outright/financed purchase models under a concession contract are most relevant for improved cookstoves, whereas fee-for-service and progressive purchase models are more relevant for LPG and biogas systems.

Binu Parthan presenting to the STEPs team – 2^nd Steps meeting network – KwaMbonambi, South Africa – 28th – 30th October 2014.

The second day saw representatives from local utility concessions in KwaZulu-Natal attend the STEPs meeting. The concessions represented were KES, with their CEO Vicky Basson attending, active in the Durban and central KwaZulu-Natal region, and Nuon-RAPS (NuRa), with MD Sifiso Dlamini, active in Northern KwaZulu-Natal up to the Mozambican border. The KES utility was founded in 1997, and currently services over 28,000 customers with solar home systems on a fee-for-service basis in and around the Durban area. Tariffs are set at 96ZAR/month for a solar home system, with six lights (2 outdoor, 4 indoor), and a 9V and 12V DC connection point. The company has provided LPG services, both in LPG bottles and integrated stove systems (notably the Shesha stoves from Totalgaz). Their concession is granted via a bidding process by the KZN state government and local municipalities on a yearly basis.

Questions were answered by the concessionaires that added context to the construction and future work of STEPs. These included revisions of assumptions for sustainable operating margins, insight into the regulatory framework in South Africa for LPG financing, and particularly the barriers to the use of mobile money in South Africa, due to transaction regulations in the financial sector and a lack of culture for mobile payments. Subsidy positioning from the government was also identified as a key barrier in South Africa to thermal energy use, with subsidies moving between thermal energy sources frequently.

Both concession representatives stated a desire to expand their thermal energy services business, and stated the criticality of tailored solutions to national and local contexts for technologies, an aspect of the thermal energy market that is core to the development of the STEPs model.

Discussion between the STEPs team and Vicky Basson (KES, far left) and Sifiso Dlamini (NuRa), middle – 2nd Steps meeting network – KwaMbonambi, South Africa – 28th – 30th October 2014.

A number of conclusions were drawn from the meeting. Given the ongoing political difficulties in Lesotho, a reorientation of project objectives was proposed to take into account the changing landscape in which the project operates. Current goals are to construct the STEPs model as a resource across all sectors, being relevant to governments and policy-makers, as well as the private sector and SMEs/entrepreneurs wishing to enter the thermal energy services market.

– Daniel Kerr, UCL Energy Institute