Productive Uses of Energy Opportunities for Rural Electrification Monika Rammelt Poverty-oriented basic energy services (HERA) Photo credit: GIZ/Wegener GIZ GmbH, Eschborn 19/03/2015 Page 1 What are Productive Uses of Energy (PUE)? PUE are defined as agricultural, commercial and industrial activities involving energy services as a direct input to the production of goods or provision of services. Includes home businesses, non-monetary income Excludes social infrastructure etc. Cuts across different sectors, energy sources, types of enterprises 19.03.2015 Page 2 Why bother? Productive use of energy can be a significant driver of economic growth and social progress in developing countries: underpin the creation and upgrading of value chains facilitate diversification of economic structures and livelihoods reduce vulnerability to multiple stresses and external shocks. enhance the commercial viability and financial sustainability of infrastructure investments 19.03.2015 Page 3 What does this mean in practice? Productive uses potentiallly Convert into additional income for end-users Consequently increases their ability to pay bills and recoup investment in grid connection/off-grid system as well as end-use equipment Increase economic viability of mini-grids through higher load factors and an increase in revenue for operator Increases technical durability of energy infrastructure through increasing ability of operator to cover operation and maintenance costs Increased impact of (rural) electrification 19.03.2015 Page 4 What does this mean in practice? Exemplary load curve with/without PU in a village Average daily energy demand: HH 11kWh, PU 54kWh 19.03.2015 Page 5 What can GIZ offer? Advice and knowledge management PRODUSE Materials and Website Catalogue for PUE of solar PV (planned) 19.03.2015 Page 6 PRODUSE – Manual, Study, Website Available Material: • PRODUSE Impact Evaluation Methodology • PRODUSE Impact Evaluation Study • PRODUSE Manual • PRODUSE Website (www.produse.org) • Productive Use of Thermal Energy Guide 19/03/2015 Page 7 PRODUSE Manual A structured approach towards PUE promotion Objectives • Pragmatic guidelines on how to plan, design & implement programmes for productive use promotion • Structured approach applicable to a wide range of settings Assumed scenario • To supplement ongoing electrification program • Headed by energy sector experts • Target population is “electricity-illiterate” 19/03/2015 Page 8 PRODUSE Study and Methodology Objective • Gaining insight into interaction between electrification and productive electricity usage by examining the impact of electrification on micro enterprises • Improving the available toolkit for the impact evaluation of electrification programmes Field surveys • Benin (farmers) • Ghana (MSME in light industrial zones) • Uganda (fishing communities) 19/03/2015 Page 9 PRODUSE Study and Methodology Findings I • Businesses in service sector tend to get connected to the grid, take-up rates in manufacturing sector of rural areas were low • Usage of electrical appliances low, electricity mostly used for lighting (exception study in Ghana) • Electrification hardly translated into higher profits, instead could even reduce profitability (Benin) • Electrification can lead to creation of businesses, which generate additional income, and attraction of larger enterprises to the area of electrification 19/03/2015 Page 10 PRODUSE Study and Methodology Findings II – Methodology • • Development of a robust and sound evaluation method Business that get electrified can per se be different to those that do not get electrified, simple comparison of these two groups leads to invalid findings → Proper usage of statistical techniques necessary and sufficient size of sample • Methodological rigour is possible with small budget 19/03/2015 Page 11 PRODUSE 2.0 Strengthening evidence base on PUE • Which PUE efforts are effective? • How do income generating activities emerge? • How to leverage suppressed demand and create real net economic growth? • What are success factors for start-ups? • … Currently looking for suitable projects Criteria • Baseline or evaluation status • Treatment and control group with sufficient size (ideally 200-300 firms) 19/03/2015 Page 12 Productive Use of Solar PV in Developing Countries A catalogue of technical solutions and sample business cases Tailoring, Senegal Hair cutting, Uganda Milk cooling, Mali Grain milling, Senegal Packaging, Uganda Water pumping, India Page 13 Productive Use of Solar PV in Developing Countries A catalogue of technical solutions and sample business cases • Guidebook for project practitioners and solar companies on decentralized solar PV-powered applications that can be used for productive purposes. • Factsheets for the individual applications including technical specifications of the appliances and the required PV system • Exemplary calculations and costs of a business scenario (including cash flow and time of amortization of investment) in different setting Looking for firms/partners interested in piloting technologies/business scenario in field Page 14 Productive Use of Solar PV in Developing Countries A catalogue of technical solutions and sample business cases • Technical solutions available on the market, incl. technical specifications (system components, sizing of PV array and other components, power consumption of appliance, status of product development, output, weight…) • Performance in the field (external factors, e. g. climatic conditions) • Availability of the applications and factors to be taken into account upon purchase of the appliance (special reliable brands, features, availability of spare parts…) • Business scenarios – Investment costs, repayment period, cash flow in different settings, exfactory prices/prices charged by international distributors • Potential to be adopted at scale • Best practice, exemplary projects, applications, contacts to resource persons Page 15 Thank you for your attention. Monika Rammelt Poverty-oriented basic energy services (HERA) Dag-Hammarskjöld-Weg 1-5 65760 Eschborn Germany Photo credit: GIZ/Wegener Tel.:+49 6196 79 6453 E-Mail: [email protected] www.giz.de/hera www.produse.org 19/03/2015 Page 16
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