Hyderabad | Sep-16 | Lessons from Africa, Asia and Latin America
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Hyderabad | Sep-16 | Lessons from Africa, Asia and Latin America
- 1. e4sv.org LESSONS FROM AFRICA, ASIA AND LATIN AMERICA Date 23 September 2016 Presenter: Dr John Holmes
- 2. e4sv.org SUMMARY OF FINDINGS TO DATE ■Cross-cutting issues ■Home-based supply ■Mini-grids ■Cooking ■Sustainable development Goals
- 3. e4sv.org CROSS-CUTTING ISSUES 1. Improve access to affordable finance: ■ build/share track records of income streams ■ risk mitigation: credit guarantees ■ reduce transaction costs 2. Provide support to entrepreneurs: ■ business incubation & advice services ■ cut red tape / give breathing space 3. Build capacity: ■ technical/business/institutional/finance sector 4. Create awareness 5. Involve women and youth 6. Don’t give things away
- 4. e4sv.org HOME-BASED SUPPLY: SOLAR HOME SYSTEMS AND PICO-SOLAR LIGHTS Substantial advances Key factors • PV cost reductions • Increased efficiency of appliances • Pay-as-you-go 3rd Generation systems
- 5. e4sv.org HOME-BASED SUPPLY (2): SUCCESS STORIES East Africa: business driven Further accelerate rollout by: access to finance leverage distribution networks Build skill base Bangladesh: Government-led Ownership by group of stakeholders Subsidised finance Repay in instalments Effective technical standards Technical support
- 6. e4sv.org HOME-BASED SUPPLY (2): SUCCESS STORIES East Africa: business driven Further accelerate rollout by: access to finance leverage distribution networks Build skill base Bangladesh: Government-led Ownership by group of stakeholders Subsidised finance Repay in instalments Effective technical standards Effective technical support How can these models be adopted and adapted for other countries/regions?
- 7. e4sv.org HOME-BASED SUPPLY (3): LOOKING AHEAD ■Tackle problem of poor quality and counterfeit products ■Needed technical developments: ■ Better batteries ■ Recycling ■ Plug and play ■ Control systems ■ New PV technologies ■ Appliance efficiency ■DC nano-grids
- 8. e4sv.org MINI-GRIDS Technical developments reduce equipment costs Economies of scale: replication Anchor loads absorb costs Reduce set-up overheads Reduce financing costs Capital cost subsidy Get the tariffs right: constraints of affordability & equality Stimulate productive enterprise to increase incomes Increase load factors: improved control systems & productive enterprises Increase level of connections Operating cost subsidy More limited progress – costs greater than revenues – how can we balance the books? costs revenues
- 9. e4sv.org MINI-GRIDS (2): COMMUNITY ENGAGEMENT ■Villagers should be the main drivers ■Build on local knowledge and customs ■Work with trusted individual and organisations: local champions ■Ensure that the poor have a voice & stake, not just the powerful “projects are 70%social / 30% technical”
- 10. e4sv.org COOKING: KEY DRIVERS ■Health risks ■Environmental impacts ■Social benefits
- 11. e4sv.org COOKING (2): KEY FINDINGS 1. Address user needs and cultures 2. Financing schemes (& subsidies) to ensure viability of all stages of value chain 3. Enhance product quality 4. Technical and business support
- 12. e4sv.org SUSTAINABLE DEVELOPMENT GOALS ■Goal 7: level of ambition ■Other goals: integrated approach ■Goal 17: strengthen means of implementation: ■Better coordination ■Sharing of information ■University collaborations ■Evaluating development outcomes
- 13. e4sv.org Thank you for your attention www.e4sv.org | info@e4sv.org | @e4SmartVillages
Notes de l'éditeur
- Improve access to affordable finance: Problem for companies – upfront capital cost of mini-grids and working capital to enable PAYG schemes for SHS Key issues as need to ramp up financing by factor of 10 or more Banks perceive high risks: build/share track records of income streams & Governments/donors provide credit guarantees to mitigate risks SMEs: a lot of effort to get small capital sums – distracts from ‘day job’ – reduce transaction costs. Provide support to entrepreneurs: Important role of entrepreneurs: drive / local knowledge / connected to and understand communities Businesses to provide and make productive use of energy: key to long term sustainability and progression up energy/development ladder Value of business incubation and advisory services Govts. Should establish supportive policy and regulatory environments: cut red tape, simplify licensing and breathing space in tax regimes to get enterprises off the ground Build capacity Lack of skills and institutional capacity are major constraints Need systematic analysis across value chains Then training to fill the gaps Create awareness Continuing value of initiatives to increase villagers’ awareness of the technologies, their benefits and how to use them ‘seeing is believing’ – promote successful examples of smart villages Involve women and youth Different priorities to men Women proven as great energy entrepreneurs – well-connected and rapport with other women Need and ownership of youth – can they see a future life in the village Don’t give things away Many examples It spoils markets: undermines businesses, creates handout mentality, equipment falls into disuse.
- Solar home systems and pico-solar lights: substantial advances in performance and affordability Key Factors Substantial reductions in cost of solar panels Much greater efficiency of appliances, e.g…. Business models that get around initial cost hurdle – mobile phones and money as enabling technologies 3rd generations SHS: 1/3 the power to support given level of service, weight 50 to 6 kg results in cost reduction of 30-50%
- Two distinct success stories: East Africa – commercial; Bangladesh (4 million SHS deployed) – Government led. East Africa: focus on how further accelerate roll out… Bangladesh: key factors in success…
- Two distinct success stories: East Africa – commercial; Bangladesh (4 million SHS deployed) – Government led. East Africa: focus on how further accelerate roll out… Bangladesh: key factors in success…
- Universal problem of poor quality and counterfeit products spoiling markets and undermining householder confidence Governments need to set and rigorously enforce quality standards: requires resources International action needed on flow of counterfeit products Technical developments needed in… Linking small clusters of houses (say 10 to 30) in low voltage DC nano-grids provides opportunities for load sharing and can be more cost effective And relates to a current debate on AC v DC as the basis for household electricity provision
- Mini-grids: central power source to meet needs of village or cluster of villages AC Better able to meet power demands of productive enterprises Some successes, e.g. micro hydro in mountainous regions of Nepal and Pakistan, and jungle interior of Borneo But generally limited progress – pilots and demonstration plants, but not significant roll out: yet IEA evaluation points to mini-grids providing the major part of electricity supply to off-grid rural communities How can we balance the books? Reducing costs: May expect technical developments to further reduce costs: PV and batteries particularly Replicated plants rather than one offs will reduce costs Anchor loads such as phone masts, mines, productive enterprises can absorb a significant part of the capital cost, providing some level of cross-subsidy. Set-up overheads from due diligence etc. can be up to 30% - bundling, track records and replication should reduce Reduce financing costs (interest rates) through building finance community confidence and risk mitigation Some level of capital cost subsidy as interim measure – but need to do so in a way which maximises leverage. Increasing revenues: Governments may impose limits on tariffs, for example by a requirement to match grid-connected urban tariffs in the interest of equality. Otherwise they may be pitched to maximise revenues in the context of affordability by different sections of the community and considerations of social equity Stimulating productive enterprise increases incomes and villagers’ ability to pay more for more electricity Increasing load factors increases the revenues arising from a given capital investment: improved control systems and productive enterprises help Similarly, more houses connected in the village increases demand and consequently revenues. A problem in some schemes has been insufficient sign-up to the scheme An alternative subsidy as an interim measure is to support the operating and maintenance costs, but this can be an open-ended commitment which can drain the resources of Govts and donors
- Need extensive community engagement to build ownership Villagers should control their development path and be the main drivers of energy initiatives Build on local knowledge, cultures and customs Need to build trust - Work with trusted local individuals and organisations Identify and nurture local champions Ensure that the poor and marginalised have a voice and can benefit, not just the powerful
- While cooking has featured in most of the workshops, so far it has only been the focus of one – in Myanmar looking at issues around deployment of improved cookstoves in Southeast Asia Key drivers: With regard to the 4.3 million annual deaths – reduce exposure to smoke and fumes, particularly for women and children Reduce environmental impacts – deforestation and climate impacts, particularly due to black carbon emissions Social benefits; reduce time collecting firewood – freeing up several hours per day for other activities
- Tailor designs to local cooking styles – and importantly for women: engage Appropriate combination of financing schemes and subsidies ensure that actors at various stages of value chain can establish viable businesses, and householders can afford to purchase (perhaps in instalments). Many cookstoves made by local artisnal producers – need standards and ongoing testing to ensure product quality and that maintained Need both technical support to develop technical expertise and managerial support to develop business expertise so that successful enterprises can grow.
- Turn finally to some more general reflections on the SDGs Goal 7: universal energy access: move beyond minimalist approaches – set ambition consistently with supporting achievement of full range of SDGs – achieve smart villages and level of opportunity that they represent Other goals: confirmation that integrated approach needed – associated investment in key services and infrastructure – and support for productive enterprises Goal 17 is about strengthening the means of implementation – key relevant points: Little coordination between donors/development agencies and limited collaboration with govts: duplication, gaps and missed opportunities Time consuming rounds of grant calls Value of sharing information – between communities, countries etc – and on failures as well as successes – SVI Collaboration between universities and frontline organisations Evaluating development outcomes