sustainable energy delivery models that target the poorest, 10-2012

8/10/2019 Sustainable Energy Delivery Models That Target the Poorest, 10-2012

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sustainable energy delivery modelsthat target the poorest

Seminar for the UCL Energy Institute

Ben Garside

International Institute for Environment & Development

23 October 2012

www.iied.org
http://www.iied.org/http://www.iied.org/


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What Im going to cover

Energy as a hot topicRio+20 & beyond

SE4ALL and pro-poor energy delivery

Private sector as deliverer of SE4ALL

The broader pictureenergy equity principles

Key aspects of building pro-poor energydelivery models

Energy delivery modelsa framework Delivery model design process

Next steps


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Sustainable Energy for All (SE4ALL) What?

When?

Where?

Who?

( with thanks to Practical Action for inputs on SE4ALL slides )


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What:

UN Sustainable Energy forAll Initiative (SE4ALL)The SE4ALL Initiative is focused on working with

stakeholders to deliver three key objectives by 2030:

Ensuring Universal Accessto modern energy

services

Doubling the share of renewablesin the globalenergy mix

Doubling the global rate of improvement in

energy efficiency


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Key outputs of SE4ALL Vision Statement Framework for Action

Action Agenda (identifies 11 Action Areas)

sectoral areas: (1) modern cooking appliances and fuels; (2)distributed electricity solutions; (3) grid infrastructure and supplyefficiency; (4) large-scale renewable power; (5) industrial andagricultural processes; (6) transportation; and (7) buildings andappliances.

enabling areas: (1) energy planning and policies; (2) business model

and technology innovation; (3) finance and risk management; and (4)capacity building and knowledge sharing.


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When:

Timeline of action September 2011 - SE4ALL Initiative launched

November 2011 - EC announce Agenda for Change energy priority

for Development Assistance

April 2012SE4ALL Action Agenda launched

June 2012 - Rio +2052 countries endorse SE4ALL, $50b committed

from private sector to Initiative

September 2012launch of operational phase of the Initiative(country-focused)

December 2012baseline report released (WB-led)


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Where:

Priority countries62 countries have actively opted in to the SE4ALL Initiative(almost half of which are in sub Saharan Africa)

12 countries have been prioritised as first-movers largelySSA:

Kenya Mozambique

Tanzania Ghana Uganda Burkina Faso

Sierra Leone


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Who:

Key International Players UN:

- UNDP

- UNEP- UNIDO

European Commission

Energy+

GIZ

World Bank


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Who:

European CommissionEnergisingDevelopment

Demonstrating leadership on energy access through:

1) NewDevelopment strategy Agenda for changeprioritising energy access in Sub Saharan Africa

(20142020)

2) Launch of a50m Technical Assistance Facility(by 2014)

3)Announcement of500m commitment to

concrete energy access projects (by 2014)


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Who:

Energy+ and World BankEnergy+

Norwegian government initiative to promote energy accessand low carbon developmentcountry government

agreements already signed with Kenya, Liberia andEthiopia (c. 150m Euros)

World Bank

Leading the development of an SE4ALL baseline reporta snapshot of the global picture of each of the goals in2012 - and establishing a tracking framework to define andmonitor progress to 2030


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Who: Private sector is seen as key deliverer of SE4ALL

Many large PS financial commitments e.g. Bank ofAmerica USD 35 billion of financing toward energy

initiatives

Civil society - All three SE4ALL documents highlightthe role of Civil Society as crucial and

complementary. The Secretary General identifies civilsociety as the third pillar to deliver SE4ALL,alongside business and government


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The overriding rule should be to makemarkets not destroy them, while clearly lotsof aid programmes have been veryineffective in giving things away. Grantmoney needs to be used to reduce the risk ofstandard commercial business.

Unfortunately, most energy accessinvestment opportunities among theworlds poorest offer high risk and lowreturns, which is the wrongcombination.

If there is a simpler market ready to be

exploited there is little incentive for theprivate sector to set up cumbersomefinancial mechanisms and delivery modelsto serve the poorest.

I think we need to be honestand recognise that at presentwe are not able to target thepoorest of the poor.

A successful business model isnot necessarily defined by the factthat people have to pay at thepoint of end use.

The primary role of NGOs shouldbe to innovate and demonstrate theviability of systems and technology,reducing the risk for subsequentinvestment by the private sector.

In fact many do not do thatbecause they are not brave enough

to subject their work to criticalevaluation.

I think [SE4ALL is] a great initiative but therehave been so many initiatives in the past withdubious results so Im not getting too excited.

Who: SE4ALL and the private sector some perspectives


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Coordinating Link entrepreneurs and investors; NGOs

and business; private and public sectors

Co-ordinate (and educate) donors

Gather country-focused information forsetting up business/finding local partners

Coordinate market analysis, resourcemapping, data collection/info sharing

Guiding Influence governments to generate

supportive policy/economic frameworks,e.g. guidelines for policy directives

Promote incentives, e.g. fossil fuel

subsidy reform; eliminating import taxes;tax benefits for local manufacturing; feed-in tariffs

An IIED survey: What can SE4ALL do to stimulate private sectorinvolvement in sustainable energy access, especially for the poorest?

Stimulating Demonstrating Stimulate investment funds aimed at

difficult market (low returns, high risk,longer term)

Provide guarantees for private investment

Encourage public sector adoption of newtechnologies and public/private supportfor research and education

Showcase and validate demonstrably

profitable business models for replication Build capacity in financial institutions to

understand viability of such businesses

Develop standardised methods formeasuring impact beyond profit


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Who: Civil SocietyThe current profile of energy access is unprecedentedbut commitments to clean, secure and affordable energy donot automatically translate into delivery for poor communities

Civil society has a role to play in establishing a new energynarrative; one which recognises the full range of serviceswhich poor people want, and need AND ensuring that thismessage is reflected in the definition and delivery of

energy access at country level

September 2012 marks the start of the operational (i.e

national-focused) phase of the Initiative


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Civil Society Roadmap Civil society engagement with SE4ALL has not beenstrategic or systematic

Civil society groups, including IIED, have formed acoalition and made a high level joint statement at Rio+20

The SE4ALL initiative has tasked a group of NGOs, led byPractical Action, to create a Civil Society Roadmap

This represents a tangible opportunity to help shape howcivil society can engage at the international and national

levels IIED and others currently working on a joint-plan to run

civil society strategic engagement at national level


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Key national opportunitiesEach of the 62 countries opting in to SE4ALL have to

deliver two outputs in the next 12 months:

1) Gaps Analysis

2) National SE4ALL Implementation Plan

These will shape the delivery and definition of energyaccess in country for the coming decade


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Energy equitysome principles


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Energy equitysome principles

Prioritise improving the lives of the poorest

Tailoring energy services to the needs of the poor

Decentralised is often more appropriate and moreaffordable

Danger of low-carbon agenda driving pro-poorenergy access

Measure success in terms of developmentbenefits

Health, education, and livelihoods; more focus onM&E

Joined up planning


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Energy equitysome principles (II)

Promote effective civil society participation inplanning and decision making

A sense of ownership/involvement is often key Local socio-cultural context including preferences

for products and practices; assessing &stimulating local willingness to pay

Support sustainable use of local resources Using locally available energy resources e.g.

solar, gas

Creating jobs in supply chains


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What is an energy delivery model?

The combination of technology, finance and

management required to supply energy to users. Thisincludes sourcing energy resources, conversion and

processing, distribution (of products or power) andrelations with end users. The design of this processneeds to consider governance, management andownership structures, and the chosen financing

options and payment systems (product pricing ortariffs).

Pro-poor energy models would target the needs ofthe poorest, following the equity principles


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A few key aspects of pro-poor energy

delivery models Success needs to be viewed from different perspectives

Wants vs needs

Partnerships and stakeholder relations/incentives

Socio-cultural context is often key Local preferences & expectations

Community cohesion and capacities

Strength & perceptions of institutions

Enabling environment Institutional structures, policy, regulation, and government support

Environmental conditions

Financial sustainability and scaling Designing payment systems

The role of subsidies

The challenges of connecting to larger finance


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Pro-poor energy delivery model framework


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OsterwaldersBusiness Model Canvas


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Delivery Model Design Process


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1. Demand Phase Identify the context - this is usually dictated by the initiating

agencys priorities

e.g. particular geographical area; a group of people with similar activities or

lifestyles such as farmers in semi-arid regions. The productive uses of energy

services for subsistence agriculture

Perform a broad stakeholder mapping group types, livelihood types, actors that engage with these groups (local,

national)

Carry out energy needs and wants assessment across a range of

actors

perceptions of end-user needs plus own needs/incentives. Is there a space for an

energy service as part of a broader need?

Nail down the challenge - matching stakeholders priorities

fits within local and national programs, feasibility in terms of natural and human

resources, opportunities, barriers

Identify potential solutions and definitions of success from all

stakeholder perspectives.

What are the expected outcomes and impacts from delivering certain outputs?How are the outputs linked to outcomes and impacts


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2. Market and context analysis phase The process so far has led to the broad formulation of an intervention

idea or value proposition.

This phase uses a Delivery Building Tool to understand what marketand context information is needed to create the delivery model. Analysis adapted from Osterwalder canvas and market mapping tools

Answering the questions the analysis raises involves using a number of differenttools/approaches e.g. better understanding willingness to pay


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3. Design Phase

Using the gathered information, map out potential

delivery model options

Keeping in mind risk/opportunities that have emerged

from the market analysis and ensuring best alignment ofincentives for different stakeholders

Identify opportunities to mitigate risks and

improve the models value through creating

support services Action plandefine activities, monitoring and

evaluation strategy


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Next Steps

Continue engagement with and constructiveanalysis of SE4ALL process

Deepen analysis of delivery modelsframework, working with others to refine andfield test it

Work on better measuring links between

energy service delivery and livelihoodimpacts


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Publications

Energy equity: will the UN Sustainable Energy for Allinitiative make a differencehttp://pubs.iied.org/17127IIED.html

Powering change in low-income energy marketshttp://pubs.iied.org/17093IIED.html

Sustainable Energy for All and the private sectorhttp://pubs.iied.org/G03383.html

Sustainable energy for all? Linking poor communitiesto modern energy services (forthcoming)
http://pubs.iied.org/17127IIED.htmlhttp://pubs.iied.org/17093IIED.htmlhttp://pubs.iied.org/G03383.htmlhttp://pubs.iied.org/G03383.htmlhttp://pubs.iied.org/17093IIED.htmlhttp://pubs.iied.org/17093IIED.htmlhttp://pubs.iied.org/17127IIED.htmlhttp://pubs.iied.org/17127IIED.html


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Thank you

sustainable energy delivery models that target the poorest, 10-2012

Documents