energy for development: business opportunities for community minigrids - jan 2014

www.energy.soton.ac.uk

Energy and Climate Change Division – www.energy.soton.ac.uk Prof A S Bahaj : The Role of Energy in Development

Energy for Development: business opportunities for community minigrids

Professor AbuBakr S Bahaj Energy and Climate Change Division, Sustainable Energy Research Group Faculty of Engineering & the Environment University of Southampton, Southampton, SO17 1BJ United Kingdom

Prof A S Bahaj : The Role of Energy in Development Energy and Climate Change Division – www.energy.soton.ac.uk

Energy generation and services

Exploit local natural resources, understand how these can be coupled

with economic, social and environmental impacts.

Local abilities - the provisions for societies will differ by region.

System design - need to be less complex & anticipate loads.

Storage systems.

A supply chain including technical support will need to be in place.

If local natural resources are inadequate or inappropriate, a supply

chain for the delivery of energy services based on fossil fuels will need

to be established.

Need to take into account the following factors:

Possibilities for energy generation:

renewable energy - regionally and temporally variable,

initial capital cost (fuel free).

fossil energy – cost, maintenance and supply chain! 1000 kWh/m2.a

1000 .. 1500 kWh/m2.a

1500 .. 2000 kWh/m2.a

2000 .. 2500 kWh/m2.a

>2500 kWh/m2.a


Energy provisions Intervention strategies

Internal / external

donor provides

investment

Local investment!

Training

given.

Revenue

generated.

Community has

interest in project

and are prepared

to run it.

Scheme is

sustainable

and is

replicable.

External

donor

supply and

install

equipment

Minimum training,

No supply chain or

revenue generation.

Minimal community

engagement

After some time, system

fails and is not repaired

etc.

X

Community

engagement is key

A better pattern, something like the following:

==


=== This sits at the heart of the E4D project.

Energy provisions

1. Capital costs

2. Operational costs

3. Income generation.

Options:

• Banks

• Micro financing companies

• Governments

• etc

How can such

an intervention

be financed?

Intervention strategies

Aim for the better pattern:

– Finance

Internal / external

donor provides

investment

Local investment!

Training

given.

Revenue

generated.

Community has

interest in project

and are prepared

to run it.

Scheme is

sustainable

and is

replicable. Community engagement is key

==


E4D project aims

To establish and implement, easy to replicate,

sustainable decentralised off-grid electricity.

Specific to the promotion of both development,

alleviate poverty and improves wellbeing in rural

communities in East Africa.

Tailor made solutions to meet the productivity

needs of target communities.

Develop easy to apply tools, to ensure long term

financial viability whilst addressing the associated

societal and health impacts.

Tools and designs to replicate the projects.

Replication of Rural Decentralised off-grid Electricity Generation through

Technology and Business Innovation

www.energyfordevelopment.net

http://www.energyfordevelopment.net/


Community led energy supply services

Community ownership and enhanced wellbeing.

Commerce creating value especially of trade / agricultural production.

Services that can address other societal needs such as educational and

primary health requirements.

Cottage industries / SMEs geared to enhance the wellbeing and wealth of

the community.

The needed platform for capacity building to enhance growth / retain

capabilities / expand.

Core businesses and community ownership to be enhanced / created and

developed. This can provide/facilitate the following:

Various possibilities for the organisation of an energy supply provider:

Initial set-up and technology capital costs.

Funding streams to be addressed at the outset.

Holistic approach – community at centre.

Revenue generation!


Community based energy supply services Kenya: Kitonyoni

Implementation approach:

Understanding country / region.

Developing knowledgebase.

Assess and review aspirations / needs.

Community based structures.

Enhancing what is already there.

Business approach / revenue generation.

established.

System design and overall procurement.

Installation.

Operational analysis.

Business case evidence.

Replication.

Kitonyoni sub-location

Mwania sub-

location


People/km2

Population density

0-5 km

5-10 km

10-20 km

20-50 km

50-100 km

100-250 km

Distance from the grid

Understanding country / region.

=>Exclude <50 people/km2

=>Exclude <15 km from grid

Kenya: regional understanding

(People/km2).km


Kenya: Makueni district : 160km south of Nairobi, 27.1 km2, population density

96 persons/km2, total population app. 2,590

Mii

Kangondi

Kavingoni

KwaKavise

Kiliza

Kitonyoni

!!!

!!!!!!!!!!

!!!!

!

!!!

!!!!!!!!!! !!

!

"

Mwania

0 2 41 Kilometers

Where do Households mostly charge their mobile phones?

Using own electricty

Using neighbours electricity

At Kitonyoni/Mwania TC

Other

Kitonyoni_roads

Kitonyoni/Mwania Sub Location

Assessing needs

Control Community


Lighting data from the catchment areas. - Kitonyoni (left) and Mwania (right)

Kenya: Makueni district

Mii

Kangondi

Kavingoni

KwaKavise

Kiliza

Kitonyoni

!!!

!!!!!!!!!!

!!!!

!

!!!

!!!!!!!!!! !!

!

"

Mwania

0 2 41 Kilometers

Do HH own a paraffin lantern?

Yes

No

Kitonyoni_roads

Kitonyoni/Mwania Sub Location

Do Households own paraffin lanterns?

Assessing needs

Control Community


Each dot on represents a household and the

legend identify the available platform for device

charging.

Mii

Kangondi

Kavingoni

KwaKavise

Kiliza

Kitonyoni

0 2 4 1 Km

Solar Panels

Own Generator

Vehicle Battery

No Electricity in HH

Other

Kitonyoni_roads

Kenya: Kitonyoni

Assessing consumption

-0.02

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

Rela

tive

fre

qu

en

cy

Monthly lighting spend (KSh)

Poly. (Kitonyoni) Poly. (Mwania)

Lighting cost from the catchment areas Power availability


Concept and project development Kenya: E4D Concept

Business consumption

Lighting (Lanterns)

Mobile Phone Charging

Sale of Water

Remote charging Stations

On-going

income

Households/ education

Local Trading Centre

Community Members

Sub Location Development

Benefit Group

Cooperative &

Committees

Initial

Capital

Initial Income for Co-Op through Shareholder & Membership


Power supply/income structure Kenya: Kitonyoni == power supply

RL

S s

yste

m in

eve

ry h

ou

se

ho

ld

Trading Centre

Business Business

School

Health Centre

Business

RL

S s

yste

m in

eve

ry

ho

use

ho

ld

Minigrid – connecting businesses, health centre & schools #40. Residential housing have rechargeable lighting systems # target 500 households.

Business

Business

ESCO Minigrid

Churches


System deployment / connectivity Kenya: Kitonyoni == Deployment

Provide lighting to over 500 households and power to businesses

− Trade Centre : Via minigrid network in the

−Households: Via rechargeable lantern / battery

−Develop legislative framework to attain project sustainability

(a)


System design / installation Kenya: Kitonyoni == System installed 13.5 kWp PV, 4 strings each @ ~60V ~9A

4N

o. 4

8V

80

A

15 kW, 1500 rpm,

230V, single phase,

max 21.5 kW

48

V 8

00

Ah

2No. 10kVA


Business models Kenya: Kitonyoni: Tariffs

ESCO/ Co-operative Society

Battery Charging Business

Retail Businesses

Health Clinic/ School

Tariff 1 - Tiered

Tariff 2 - Fixed

Lanterns supply

Energy supply

Microcredit

• Provide lighting 3000 people, power to 40 businesses.

• Rainwater harvesting from canopy.

• Income generation for the Co-operative and the project.

Churches

Households as direct customer for battery charging


Additionality Kenya: Kitonyoni – rain harvesting

Various possibilities could be envisaged

that combine energy and water provision

in water stressed areas:

Canopy used to harvest rain water.

Energy supply that combines the

provision of electricity for normal use

in businesses/housing as well as

water pumping.

Additional revenue generation for the

cooperative.

Scaling of the approach is possibel?


Community based energy supply services Kenya: Achievements

Access

Affordability assessment

Pricing

Operation

Payment mechanism

Monitoring & evaluation

Governess

Operations & maintenance

Ownership finance

Community engagement

Outputs

Templates to replicate

Local supply chain

Private Sector

engagement

Project economics

Project economics


Community status Kenya: Kitonyoni


Impacts and development Kenya: E4D Concept

Business consumption

Lighting (Lanterns)

Mobile Phone Charging

Sale of Water

Remote charging Stations

On-going

income

Households/ education

Local Trading Centre

Community Members

Sub Location Development

Benefit Group

Cooperative &

Committees

Initial

Capital

Initial Income for Co-Op through Shareholder & Membership

Health Jobs / new businesses

Community invigoration

Poverty alleviation

Impacts


Community based energy supply services Kenya: Kitonyoni extension = some examples

Maternity unit

Grid extension

Mobile power


Concept and project replication Project timeline

Network formation (2012/3)

Major conference (2014)

Outputs (2011 – 2014):

Workshops, publications,

capacity building and training

2 village systems to be installed

(2013/4)

1st village system installed (2012)

Baseline surveys

(2010/11)

Endline surveys impacts

4th village system installed (2014)

ENERGY FOR DEVELOPMENT


Concept and project replication Future/Replication

Kitonyoni, Kenya

• 13.5kWp Solar PV • 15kWp Generator • 48V 800Ah Storage

Oloika, Kenya

• 13.5kWp Solar PV • 48V 800Ah Storage

Bambouti, Cameroon

• 6kWp Solar PV


Community based energy supply services Kenya: Kitonyoni

This work is supported by the EPSRC and in collaboration with many partners – www.energyfordevelopment.net

http://www.energyfordevelopment.org/

www.energy.soton.ac.uk

Energy and Climate Change Division – www.energy.soton.ac.uk Prof A S Bahaj : The Role of Energy in Development

This work is part of the activities of the Energy and Climate Change Division and the Sustainable Energy Research Group at the University of Southampton and is supported by RCUK / EPSRC /DFID

Thank you ..

www.energyfor development.net

energy for development: business opportunities for community minigrids - jan 2014

Small Business & Entrepreneurship