Tag Archives: STEPs

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

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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

CIMG3672Chief 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 28th – 30th 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.

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Binu Parthan presenting to the STEPs team – 2nd 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.

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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

Energy for Development Case Study – Replication of Rural Decentralised Off-grid Electricity Generation through Technology and Business Innovation

Prof. AbuBakr Bahaj and Rucha Amin from Southampton University write on the University’s Energy for Development (E4D) project, providing renewable and reliable power to rural Kenyan communities.

Reliable and affordable sources of energy are fundamental not only for wellbeing, but also for economic growth and poverty reduction. Rural communities that do not have access to the national electricity network are also deprived of the associated benefits in health and quality of life provided by electrical services such as lighting and refrigeration. Fulfilling the energy needs of developing countries without compromising the environment is a challenge requiring imaginative policies and methods.

The approach adopted by E4D in Kitonyoni, Kenya focussed on a replicable, community based solar mini-grid electrification system aimed at invigorating village trading centres and promoting business innovation. The core of the project is based on a 13.5 kWp solar photovoltaic (PV) array with integrated rainwater harvesting system coupled to a mini-grid. The latter provides power to all trading centre buildings (shops, cafes, schools, health centres, churches etc.) and local businesses that in turn are able to provide charging facilities for electrical appliances, such as LED lanterns and mobile phones, to customers.

A major focus of this project has been to establish an economically sustainable system whereby the community contributes to the project and is responsible for the operation and maintenance of the plant. Income is generated for the cooperative which is also set up as an energy supply company (ESCO) through membership fees, local sales of electricity and share ownership. This income covers the running costs of the project, provides finances to the community as well as contributing to the recovery of the capital cost of the project.

Soton E4D ImageThe E4D project solar installation in Kitonyoni, Kenya. All images Sustainable Energy Research Group, University of Southampton

Since the installation in September 2012, there are clear indications that the trading centre in Kitonyoni is being transformed with land prices increasing, a number of new buildings constructed, new businesses opening and existing business owners reporting profit increases.  There has also been a marked improvement in healthcare provisions with a newly donated, fully electrified maternity clinic in operation. Furthermore, one replication project has already been carried out in Bambouti, Cameroon with a third installation in Oloika, Kenya planned for later this year.

For more information: http://www.energyfordevelopment.net/

– AbuBakr Bahaj and Rucha Amin, Southampton University

The Woman and Child in Bondo and Modern Thermal Energy Access

She was weak and frail, with her baby on her back and a large and unusually long log of wood on her head. You could sense that she was struggling to move under the weight of the log on her head and the baby on her back, but perhaps the promise of the large firewood and promise of less trips to gather wood egged her on. The water channel on her path was shallow but the fall was very steep, probably 40 m or more, she would have crossed the channel quite easily without the load. She jumped across, didn’t make it, slipped but fortunately held on to the brickwork and then pulled herself and her baby out and moved on. I had my heart in my mouth for a few seconds and was greatly relieved that she and her baby was safe. The women with her baby (see picture) could have easily slipped and dropped 40 m down with grave consequences.

This is a scene I witnessed two weeks ago at Bondo in Southern Malawi –one of African countries where over 90% of the population lack energy access. Several millions of women in Sub-saharan Africa and South Asia make such risky trips every day to gather firewood, twigs and shrubs for household thermal energy use, often putting themselves at physical risk. Such trips often expose these women to rough terrain, natural elements and attacks from animals and sometimes fellow humans.  Most of these women then cook food or boil water using inefficient traditional stoves or keep the fire burning through the night to keep themselves warm or wild animals away. These traditional thermal energy use results in major indoor air pollution which slowly kills them and their children through lower respiratory diseases. So women are exposed to health risks during the collection and use of traditional biomass for thermal energy.

Against this backdrop, last week, I was pleased to learn from the launch of the decade of SE4All from New York that the first two years of the decade will be dedicated to ‘Energy-Women-Children-Health’ nexus. This is a very welcome development and I applaud the SE4All leadership and partners for the attention to this space. However to be able to effectively address health related challenges of women and children in areas without energy access, electrification alone is not sufficient and providing modern and thermal energy to rural women is central to this issue. Providing modern thermal energy needs to go beyond a product delivery approach which often focuses only on efficient cook-stoves. While energy for cooking is important, hot water for sanitation and space heating are also quite important. While biomass – solid and liquid fuels, electricity and solar thermal could all play a role, Liquefied Petroleum Gas (LPG) can also play a supplementary role. The business of providing thermal energy as a service is likely to a low-return, long-term business and may need to be combined with electricity or agro businesses to increase viability. There are also important roles that public sector, private sector, Public-Private Partnerships (PPP) and the international community should play. Solutions will need to go beyond technology to address, financing, supply chain, institutional arrangements as well as policy and regulations. So all of us need to chip at this problem from all possible angles and the attention and support in this space in the next two years due to SE4All is very welcome.

As for the anonymous woman and her child, Peter Killick of Mulanje Energy Generation Agency, the micro-grid electricity service provider for Bondo who witnessed the scene with me, kindly offered to put a footbridge across the channel. While I am relieved that her future journeys to gather fuel will be safer, I hope to be back in Bondo in the future to see that she has access to cleaner energy technologies and fuel supply at her doorstep.

Dr. Binu Parthan, SEA

The Woman and the Child at Bondo

The Woman and Child in Bondo. Credit: Sustainable Energy Associates

How to Evaluate the Impact of Research Projects?

Xavier Lemaire and Daniel Kerr from University College London attended the first annual workshop of the Understanding Sustainable Energy Solutions (USES) Network, held at the Wellcome Trust, London, UK on the 8th July 2014. The workshop was designed to give insights into how best to achieve impact and engagement with beneficiaries in the USES Network projects, which cover a wide variety of aspects of low carbon energy research in developing countries, from institutional networking assistance and business support, to technology dissemination for thermal and electrical energy, to institutional and residential energy efficiency. A number of sessions took place, with an aim to convey insights into how funders and research users engage with academic institutions and organisations conducting research; theories of change and the impacts, both potential and real, that past projects have achieved/failed to achieve; and how best to plan for and assess the impact of the USES projects, and what shared experiences could be brought to bear for the good of all involved projects.

The day began with three presentations on impact, engagement and theories of change. Ed Brown from Loughborough University, in conjunction with Alison Mohr from the University of Nottingham, led off with an introduction to the Participatory Impact Assessment (PIPA) methodology. Adrian Ely from the STEPs Centre at the University of Sussex, and Duncan Green from Oxfam also contributed via video presentations.

Of particular interest was the PIPA methodology for assessing impact, which seeks to identify the inter-linkages in the goals and priorities of all actors in research projects, for example funding agencies, research institutions, local and national governments, community organisations, NGOs and the wider population. Through identifying the synergies in these groups’ priorities and needs, the methodology hopes to provide a clearer insight into the potential impacts of research projects, and the methods needed to achieve them.

The following session saw a number of representatives from the Department for International Development and the Department for Energy and Climate Change, as well as the UKCDS and the Knowledge Transfer Network, conduct a roundtable discussion on the experiences of funding agencies and other organisations in engaging with research and researchers. Broad themes included the importance of quantitative measures of impact and results in the view of the funders and their objectives, as well as highlighting the divergence on timescales for results between public sector projects and research projects.

The whole-room discussions sessions that followed, as well as in the case study presentations, brought forward a number of recurring points. The importance of stakeholder engagement from the very beginning of a project  in achieving impact in research projects, particularly in developing country contexts, was consistently highlighted as a key factor. In-depth knowledge of local country contexts, as well as sectoral expertise in key project members, was identified as a useful factor in achieving project impacts. These factors, along with the targeting of invitations to actors based on their expertise, were also identified to be critical in the creation, funding and initial engagement of projects.

The final session focused on the proposed framework for reporting project impacts to DFID, and how shared experiences within the USES project could help to facilitate greater impacts for all involved projects. Finally, the day concluded with contributions from participants on how the USES network can support the involved projects, predominantly focusing around networking via social media and web networking spaces provided through the USES portal on the LCEDN website.

LCEDN Meeting July 2014Roundtable discussion at LCEDN USES Network Meeting, July 2014

– Xavier Lemaire & Daniel Kerr, UCL Energy Institute

Side-Stepping the Energy Ladder

For decades now there has been talk of a hierarchy of energy use or ‘ladder’ which defined levels of development as well personal aspirations. Occupying the bottom of this ladder were primary fuels such as biomass, dung, etc. Moving towards the middle we had kerosene and LPG which were considered ‘modern fuels’ because of their comparative convenience as well as fairly sophisticated refining process associated with hydro-carbon fuels. And of course, at the top of the ladder was electricity, the most versatile and modern energy source of them all.

There have been many articles published about the energy ladder, some supportive of its clear albeit simplistic representation of how households progress in terms of fuel use while others have been more critical altogether of its rigidity and inability to accommodate variables such as culture,  differing socio-economic and geographic contexts. How this is playing out in South Africa today is quite interesting. Looking at South Africa’s energy policy, it is highly orientated towards developing the ‘top of the ladder’ options. Policy and regulations abound when it comes to nuclear, coal, large scale renewable, LPG gas, etc. But there is little regulatory interest when it comes to wood. Perhaps its posturing (Africa’s largest and most sophisticated economy requires nuclear not biomass regulations) or perhaps that’s the reality (the energy service activities are at the top of the ladder).

Despite this there are a number of inconsistencies emerging;

  • Electricity is becoming increasingly expensive (above inflation increases for over 5 years already with about the same to come) so many poorer households are having to ‘back-switch’ to LPG and paraffin.
  • Many middle class households that have been electrified for decades are opting to cook on LPG gas (on stainless steel hobs for sure) and heat their houses in winter using wood (up-market fireplaces).
  • Millions of households still cook with wood although they have access to electricity. The energy source is simply uneconomic to support the full range of thermal services households require.
  • High oil prices (think kerosene and LPG) and increasing electricity prices are putting strain on the ability of people to use fuels which they have access to. Access and utilisation have become two different issues
  • Political promises which have for decades reinforced the energy ladder now cannot be met as lower-income households cannot afford to utilise these fuels for all services required.
  • Department of Rural Development and Land Affairs has put out a tender for improved cookstoves, a technology that has never appealed to the Department of Energy because of the ‘poverty’ stigma associated with wood. Or, “people did not struggle [against Apartheid] to use wood” the former Minister of Energy [Dipuo Peters] once said to this blogger [African Minister’s Meeting, Sandton Convention Centre, Johannesburg, 17th September 2011].

Without significant subsidies, the lower-income households will find ascending the so called energy ladder increasingly difficult to achieve. The progressive notion of the ladder had much to do with the assumption that it was simply a matter of time before households, given broader economic growth, would progress up the ladder. However such economic growth hasn’t quite materialised and the associated costs of using these fuels has become increasingly exorbitant. Perhaps the middle-class should be used to assist in de-stigmatising the use of biomass fuels and the like which will at least assist in addressing some of the indignity associated with being trapped at the ‘bottom of the ladder’. Third generation improved cookstoves instead of open fires should go a long way in terms of doing just that.

– Robert Aitken, Restio Energy