rsal electricity access - Haas School of BusinessA novel solution for universal electricity access DC MICROGRIDS We’re here to introduce you to a novel technology that can be applied
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A novel solution for universal electricity access DC MICROGRIDS
We’re here to introduce you to a novel technology that can be applied to one of the world’s greatest challenges – that of universal electricity access
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1.3 billion people still lack access to electricity
Presenter
Presentation Notes
This is a photo of the world at night. As you can see, many parts of the world are dark and without electricity – Africa is particularly unlit. 1.3 B still lack access to electricity; nearly 97% of those live in SSA and developing Asia http://www.worldenergyoutlook.org/resources/energydevelopment/energyaccessdatabase/
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Electricity is not affordable
Presenter
Presentation Notes
Energy-poor households rely on traditional fuels such as kerosene for their lighting and basic electricity needs. In this photo, they’ve even resorted to using woods. These traditional fuels are not only poor sources of light, but they create harmful indoor pollution that results in over 85,000 premature deaths every year. Each year, 4.3 million premature deaths can be attributed to household air pollution resulting from the traditional use of solid fuels. IFC estimates (conservatively) that avoided deaths from kerosene lamps would be about 85K http://www.worldenergyoutlook.org/resources/energydevelopment/modernenergyforallwhyitmatters/
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Electricity is not reliable
Presenter
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This means that in India, electricity comes and goes unexpectedly. Even when there are wires overhead, power doesn’t necessarily run through them.
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Electricity is not scalable
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Presentation Notes
This means that people around the world do not have enough electricity to support revenue-generating activities. Adverse economic impacts. http://thebreakthrough.org/index.php/programs/energy-and-climate/solar-lamps-are-no-substitute-for-access-to-modern-energy
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For 1 in 5 people worldwide, electricity is not
Affordable
Reliable
Scalable
Electricity access is a significant challenge
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OPPORTUNITY
Presenter
Presentation Notes
1.3 billion people off grid want electricity if they can afford it and access it. Now business models and technology allow financing of clean energy to shift the payment stream from dirty fuels to clean fuels. Off-grid households currently spend 6x as much as US households do for an equivalent amount of energy. \Electricity access for the world’s poor represents at least $37 billion market
Electricity access is a significant challenge
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OPPORTUNITY
Solar Lanterns
Solar Home Systems Grid Extension
# Eligible Consumers 561M
478M
95M
Est. Market Size $4B $8B $2B
What is a microgrid?
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Microgrids have the potential to electrify 145M to 410M people
Existing solutions do not meet all three needs
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Affordable
Reliable Scalable
DC Microgrids
Scalable: Microgrids enable higher tiers of electricity use
0.001 0.01 0.1 1 10 100
Macrogrid(U.S.)
Macrogrid (developing world)
Microgrid
Solar home system
Solar lantern
Per capita electricity use (kWh/day/person) 11
Presenter
Presentation Notes
Microgrids can provide >2X what solar home systems can provide, but we can’t stop there
AC microgrids can be improved
Not affordable • Larger solar arrays
Not reliable • Central storage
Not scalable • Inverters
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How is our system different?
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AC DC + -
Power Generation: Solar PV
Inverter
Battery Bank
CHARGEBOX™ enables benefits of the DC system
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• Steps Down Voltage • Payment System
Compatible
• Charge Meter • Wireless Communication • Lithium-based Storage
48V DC
12V DC
5V DC CHARGE CREDIT
DC microgrids succeed where others fail
Device / Solar Kit
Solar Home System
AC Microgrid
DC Microgrid + CHARGEBOX
AFFORDABLE
RELIABLE
SCALABLE
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Higher distribution efficiency in DC microgrids
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AC Microgrid DC Microgrid
73% 79%
81% 98%
AC microgrid efficiency excludes AC/DC rectifier losses
A more efficient system is more affordable
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0
200
400
600
800
0 5 10 15 20 25
Ener
gy C
onsu
med
(kW
h / y
ear)
Capacity (cubic ft)
AC Refrigerators
DC Refrigerators
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Presentation Notes
In addition, DC air conditioners offer inherent efficiency advantages. Variable-speed compressors use far less energy than their typical single-speed counterparts (with documented savings of 30% and more) and offer higher performance, because, rather than switching between full-on and full-off to maintain thermal comfort, they match output to need, avoiding energy intensive on-off cycling of the motor and overcooling during on-cycles. Variablespeed compressors are generally powered by variable frequency drives. The typical variable frequency drive first rectifies the AC input (converts it to DC), then uses pulse width modulation to create the desired output frequency.[10] Because the power passes through a DC phase, it is amenable to operation by direct-DC LED Lighting - 73% more efficient than incandescent bulbs Electronics – Native 20% (AC/DC Loss) Refrigeration & Cooling - 53%
Microgrids are the most affordable option for the desired level of service
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Phone charging, lighting
Entertainment Comfort and productivity
LCO
E ($
/ kW
h)
Level of Service
Solar Home Systems
Microgrids
Solar Devices
DC microgrids will be cost competitive
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Technology Levelized Cost of Electricity ($/kWh)
Solar Lantern ~ $10.00
Solar Home System ~ $1.00
AC Microgrid ~ $0.50 - $1.00
Grid Extension ~ $0.10
DC Microgrid ~ $0.50
Presenter
Presentation Notes
Grid extension is low cost, but often not reliable and not available.
How can we make microgrids more affordable?
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Num
ber o
f Rur
al H
ouse
hold
s
Income Level
Solar Home Systems
$80-120/year Microgrids
$100-150/year
Solar Lamps and Kits
$30-80/year
A reliable system prevents brownouts
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Presenter
Presentation Notes
Reliability/Flexibility Molly Reliability: Bhutan Rice Cooker Case – why distributed storage is so important DC microgrid > AC microgrid. Distributed storage is our unique idea which hasn’t been tried, which we think will XYZ benefits Source: Humboldt State & Department of Energy of Bhutan
A scalable system supports projected growth in energy demand
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-4
-2
0
2
4
6
8
10
1980 1990 2000 2010Annu
al P
erce
ntag
e C
hang
e
Real GDP Growth
Emerging market and developing economies Advanced economies World
Presenter
Presentation Notes
Accommodates economic growth Easy to add generation in addition to PV Easy to add more household storage No swapping to larger inverters Now what do we mean by scalability? The modularity of our microgrid facilitates the addition of houses to the grid as households acquire the necessary income to join the microgrid. It also facilitates addition of generation to match increases in energy demand. This is easier on our system than a normal AC system because
A scalable system can be tailored
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Presenter
Presentation Notes
Now what do we mean by scalability? The modularity of our microgrid facilitates the addition of houses to the grid as households acquire the necessary income to join the microgrid. It also facilitates addition of generation to match increases in energy demand. This is easier on our system than a normal AC system because
Why is the market ready now?
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Decreasing PV costs
Decreasing storage costs
Rise of pay-as-you-go
Presenter
Presentation Notes
Mobile phone penetration and rise of PAYG platforms Expected decreasing battery costs Expected decreasing storage costs
Initial markets were evaluated using 3 criteria
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Strong Partners
Value Energy Efficiency
High WTP
Presenter
Presentation Notes
WTP: Based on the price paid for the best alternate source of electricity EE: Large proportion of income spent on electricity Partners: Institutional and organizational support needed, especially in preliminary phases
Islands are an attractive premium market
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World Bank Islands Sustainable Energy Finance Project
10-30% of GDP spent on imported fuel (diesel)
70% Pacific Islands lack electricity access
Presenter
Presentation Notes
After much discussion and feedback from experts in the field, we settled on islands as an ideal initial beachhead market Over 30,000 islands, over 12M people. 70% no access to energy and located far from resources. 10%-30% of island countries GDP is spent on fuel. World bank has Pacific Islands - Sustainable Energy Finance Project (English) to encourage adoption of renewable energy in Pacific Islands
Path to market
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Mar
ket S
ize
1 years 3 years 5 years
$1B
Islands
$1.6B
Peri-urban
$4B+
Rural electrification
Presenter
Presentation Notes
It’s going to be more expensive at first, so we should target islands first (higher WTP). Market: Pacific Island GDP est. at about $8B, and they spend 10- Battery costs expected to be lower over time SHS are expected to break = higher lifetime costs DC appliance saturation expected to grow. More demand for higher tiers of electricity More institutional investors drive down financing costs and risks
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For 1 in 5 people worldwide, electricity is not
Affordable
Reliable
Scalable
CAN BE
Presenter
Presentation Notes
The market is right Our technology addresses a few pain points
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One step closer to universal electricity access
Sherry MBA 2015
THANK YOU
John GSPP /
ERG 2016
Sara MBA 2015
Tia MBA 2015
Nick MBA 2015
Molly MDP 2015
Achintya Madduri
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Questions?
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Microgrids let customers move up the energy ladder
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Solar home
systems $8
Grid extension
$2
Microgrids $4
Solar lanterns
$4
# of People (M) Market Size ($M)
Market size estimates (lower bound)
Solar home
systems 478
Grid extension
95 Microgrids
145
Solar lanterns
561
Presenter
Presentation Notes
IFC 2012
Addressable market, by technology
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Presenter
Presentation Notes
http://www.ifc.org/wps/wcm/connect/ca9c22004b5d0f098d82cfbbd578891b/EnergyAccessReport.pdf?MOD=AJPERES, p. 32
$0.24 $0.51
$0.08 $0.06 $0.09 $0.11
0.0
0.2
0.4
0.6
0.8
DC Microgrid AC Microgrid
LCO
E ($
/kW
h)
Generation and Storage Distribution Labor and Transportation
Better service at the same LCOE
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$0.41 $0.45
Presenter
Presentation Notes
We have better service than AC microgrids, at the same price.
DC is more efficient, especially at night
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Battery costs expected to decrease
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Market Segment Service Offering Financing Method Payment Collection
Pay per use
Rental/ Pure Lease
Rent-to-own/ Lease financing
Tier 2: Basic Household Needs
Tier 3: Small Productive Power
Tier 4: Large Productive Power
Households
Commercial
Manual
Scratch Card
Mobile Money
Business model choices
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Competitive Landscape
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Company Country Technology Payment Collection
Business Model
DESI Power India Micro/mini-grid Manual/cash Lease time/energy
Devergy Tanzania Micro/mini-grid Scratch card Pay per use
Energa Senegal Micro/mini-grid Scratch card Pay per use
Fenix International Uganda Device/solar kit Mobile money Pay per use
Husk Power India, Uganda
Micro/mini-grid Mobile money Lease time/energy
Mera Gao Power India Micro/mini-grid Manual/cash Lease time/energy
d.light design SSA, Asia Device/solar kit Mobile money Lease time/energy
Off:Grid Electric Tanzania Solar home system
Mobile money Lease time/energy
BBOXX SSA Solar home system
Mobile money Lease time/energy
Value Chain of a Microgrid
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Presenter
Presentation Notes
http://www.ifc.org/wps/wcm/connect/ca9c22004b5d0f098d82cfbbd578891b/EnergyAccessReport.pdf?MOD=AJPERES, p. 32
