Newsletter for Members and Supporters of the Alliance for Rural Electrification
CONTENT
ACTORS FROM THE RURAL ELECTRIFICATION WORLD
NEWS FROM THE RURAL ELECTRIFICATION WORLD
RURAL ELECTRIFICATION AND RENEWABLE ENERGY EVENTS
EDITORIAL
Powering Africa's Development
EnergyNet commends the work done by the Alliance for Rural Electrification (ARE). It seems hard to believe that in development circles the crucial role of power as a driver of economic growth and social wellbeing has not always received the acknowledgement it now does. Unfortunately, policies of national development agencies and multilaterals tended to follow the fashion of the time, which has focused more on the consequences of underdevelopment rather than on the causes.
Acknowledgement of the importance of power is now tangible, welcome, and long overdue, and is demonstrated by initiatives such as the Africa-EU Energy Partnership. And ARE is part of that growing awareness that the cycle of dependency experienced by many African countries will persist in the absence of an adequate infrastructure to support the means of production.
The difficulties and opportunities of electrification, and in particular rural electrification, in Africa is attracting companies that exhibit a professionalism not always evident in the past. If this translates into sustainable projects it will mark a significant break with many past practices. The tendency for the disbursement of donor funds to be determined by spending targets rather than project integrity has meant that Africa is strewn with failed projects. Not only is this an unacceptable waste of resources but it has reversed development by fostering false expectations that perpetuate inaction on the part of villagers. If villagers had not been promised a working project, it is probable that through their own resources and ingenuity, a solution would have emerged. The need to charge a mobile phone is a powerful motivator.
The concept of self-help is gaining currency, and it is with this in mind that future projects should be implemented. Local ownership, local accountability, local customers are elemental to success. The success of projects is as much determined by good management as it is by the use of appropriate technologies. These are factors understood by the private sector, and their involvement in the provision of energy services in Africa is increasingly being seen as instrumental in ensuring the sustainability of rural energy projects.
Funding energy projects in Africa to assist and enhance the elements that support sustainability remains a challenge. But it is a challenge and responsibility that cannot be shirked. Unfortunately, there are issues surrounding development funding that aggravate the task. For too long, issues relating to development, climate change, donor funding, aid, and poverty alleviation have been conflated and associated with a sub-culture that eschews commercialism, and in extreme cases is even antithetically commercial. The interdependence of these issues and the overarching objective needs to be rationally understood and articulated if distracting conflicts of interest are to be avoided.
But herein lies the rub, rural energy is not commercial in the true sense, and hence accountability, which is the key element underpinning sustainability, is often missing. The very fact of its absence should resolve the players involved to put in place mechanisms to ensure the accountability necessary for sustainable projects. The zeitgeist would seem to indicate a realisation of the difficulties and a resolve to find solutions; and, as a reflection of this growing awareness, the Africa Renewable Energy Forum (AREF), which will be launched in Bordeaux on July 1, will encourage organisations and companies to discuss their options for solving some of the persistent problems facing the rural energy sector.
AREF will be held in conjunction with the Africa Energy Forum (AEF), Africa's largest power event. The raison d'être for AEF was to create an annual marketplace for private-sector investment and business opportunities in the power and gas sectors. The steady annual increase in attendance over the last 10 years does suggest that it has achieved some measure of success in bringing parties together to explore opportunities in on-grid power.
In recent years, the renewable energy element of the work conducted by a number of the AEF participants has growth, and they are showing an increased interest in discussing issues relating to rural and renewable energy—and so too have the government officials who attend the forum. It would therefore seem timely to launch the Africa Renewable Energy Forum.
AREF will provide a venue where the private sector, government officials, the donor community, and commercial lending institutions will discuss strategies for delivering reliable energy services to rural and peri-urban communities, as well as providing clean energy as part of a country's total energy mix. Renewable energy can also offer a way of reducing dependency on expensive imported fuel. Morocco, for example, has embraced renewable energy as a way of reducing its coal import bill.
Discussions on the impact of the global financial crisis on development projects in Africa should not be avoided. In the light of the huge funds committed to bailing out western commercial banks, the switching of comparatively meagre sums for development of Africa's infrastructure seems to smack of double speak on behalf of the politicians who avidly avow their commitment to constructive poverty alleviation.
Since ARE has kindly given me the opportunity to say a few words, I cannot overlook the occasion to mention an initiative called "2010: the Year of Electrifying Africa" (YEA), which was launched this year by the charity AfricaConnect to bring to the attention of politicians, the public, and business the appalling waste of potential and hardship resulting from a lack of basic energy services. To find out more about YEA visit the website www.Africa-Connect.org. Your corporate support for this fledgling initiative would be invaluable.
Rod Cargill
Managing Director
EnergyNet Limited
London
For more information about the African Energy Forum please click here.
ARE News and Activities
New members in the Alliance for Rural Electrification:
The Alliance is proud to present one new member:
Sunlabob Renewable Energy Ltd
Sunlabob is a renewable energy provider, with particular expertise in the field of decentralised rural electrification in developing countries. Sunlabob’s energy solutions, mostly solar and small-scale hydro power technologies, offer rural households in Laos and other developing countries, clean, safe and sustainable alternatives to the consumption of kerosene or wood for lighting and other uses. The solutions offer health and environmental benefits as well as the opportunity to pursue educational and income-generating activities during time previously occupied by conventional practises such as collecting firewood. Sunlabob have focused on franchise systems where village technicians are trained to operate systems and carry out maintenance operations to ensure the ownership and continuous care of the systems, thereby increasing the equipment’s lifetime. The scheme also provides local employment.
Sunlabob recently received $100,000 and the UNEP Sasakawa prize in Africa, in recognition of the company’s ground breaking efforts in ‘Moving towards a low carbon economy’.
Sunlabob joins ARE as a growing number of companies based in developing countries. They look forward to sharing their knowledge and experiences with like-minded organisations and utilising the networking opportunities that ARE offers.
For more information about Sunlabob please see the Interview here.
If you would also like to become a member of the Alliance please contact us.
World Bank Energy Week
From March 31st to April 2nd, The 2009 World Bank ‘Energy week’ was held in Washington. The event was attended by senior-level energy and finance industry executives, senior donor and developing country government officials, stakeholders and leading-edge thinkers of the energy sector, who offered new ideas on, and insights into the potential solutions to global energy challenges. The three day event involved several seminars dedicated to the issue of enabling access to energy and the emerging risks and opportunities for policy makers. Events included a focus on the needs and activities for rural energy supply as well as the particular needs of Africa.
Members of the Alliance and Secretary General of ARE were invited by the World Bank to contribute towards discussion and shared learning experiences. Being the second visit of ARE to Washington, this also gave us the opportunity to consolidate partnerships with the World Bank and other American institutions, and discuss further opportunities relating to our shared interest in rural electrification.
Actors From the Rural Electrification's world
- Prince Charles and Andy Schroeter (Ashden Awards 2007 Ceremony)
Andy Schroeter is Director of Sunlabob Renewable Energy Ltd, a PV company based in Lao PDR and a new member of the Alliance (www.sunlabob.com)
Could you please introduce Sunlabob and its area of work as well as your role within the company?
Sunlabob is a commercial company operating in Laos since 2000 and specializing on providing sustainable energy solutions for remote rural areas. Initially we were concentrating on solar systems, but now we include small hydraulic turbines and biomass in our work. Furthermore we are known for our network of rural small entrepreneurs with whom we have a franchise kind of arrangement. This network is important for us to be able to sustain reliable services in remote areas. Additionally to our activity in Laos we have registered Sunlabob International in Singapore as a vehicle for our work abroad.
There are two directors of the company, one Lao and one German. My Lao partner takes care of the critically important interactions with villages and local government, while I take care of the commercial side of things and of the international contacts.
Could you tell us more about your projects involving Hybrid systems?
By Hybrid systems, we mean small local grids where a range of diverse energy sources are used to feed the grid. These include: Hydraulic turbines of various sizes, solar generators, motors operating on biogas or biofuel or initially diesel. We have found that Hybrid systems only make sense in fairly compact villages, thereby reducing the investments for the grid. The total number of connected households should reach about 200.
We have found through experience that small grids can only be operated economically when the public invests in the fixed assets (ie. civil engineering works, the grid, etc), while we as a private company invest in the generating equipment (ie. turbines, generators, etc). We then sell electricity into the village-owned grid.
The interaction with the main grid is becoming increasingly interesting. We have found that small hybrid grids become attractive for the main grid to hook up with, ie. because there is already an infrastructure and organization in place, it makes economic sense to build a line to that small grid and connect it up. The main grid then usually takes on the village grid, while the generating equipment (turbines, generators, solar panels, etc) continue to be operated by the private side. The main grid operators require this generating equipment to stabilize the voltage out on the fringe of the grid during peaks in usage, while at the same time we can sell electricity during low local demand into the main grid. This mutual win-win turns out to be economical in most cases.
Sunlabob also operates a rental based scheme for solar home systems. What has this meant for the uptake of this technology in rural communities? What are the advantages of this system over the traditional equipment sales based method?
We developed the rental scheme as a response to the low buying power of most rural households. In rural Laos people usually don't have enough cash around to buy themselves solar home systems. But on the other hand we discovered that they would be willing and capable of paying in small incremental installments. The typical solution would be a loan from a local bank. However the financial sector is not yet ready to provide long-term loans to rural households at acceptable conditions. So we decided to launch a rental scheme. The rental scheme has triggered a strong demand. However, there are important issues with regard to field organization that need to be managed well when engaging in a rental operation.
A few years ago we experienced that even with a rental scheme about half the Lao rural households are still not in a position to pay the regular rents and were forced to give back the systems. We needed to think out a cheaper solution for them, a challenge we took up with a clear view to enter the mass market: A solution for even the poorer households would allow us to get into economies of scale.
We now have a new product, and as with all our successful products it is a combination of technology with an operational/financial concept: Sunlabob trains suitable villagers to operate a large solar array as a charging station. This charging station they rent from Sunlabob. The village entrepreneurs also buy lanterns that operate with a rechargeable battery. They hand out charged lanterns to households who come back every 3-4 days to replace a depleted lantern with a fully charged one. The fee they pay for a charge is comparable or cheaper to what they pay for kerosene for their traditional lamps. These charging fees also pay all the costs and profits of operating the whole system. The electronic controls in each lantern allow users to track their use and thereby unambiguously attribute kerosene replacement through solar energy, an important asset for carbon trading.
Sunlabob has played a key role in setting up the Laos Renewable Energy Institute. To what extent do you think renewable energy technologies have been integrated into the policy and infrastructure plans of Laos (i.e. are renewables becoming a mainstream option for rural electrification or are these activities still on the fringes of energy supply development)?
The government energy policies very clearly point out the importance of producing as much electricity as possible from local renewable sources. The electrification targets of the government are ambitious and it is well recognized that in rural areas this cannot be achieved solely through the main grid distributing mass-energy. There is an explicit support for decentralized renewable energy provision. Any efforts to reduce the countries dependence on imported fuels are also explicitly supported by established policies.
The challenge is not the policy support. The challenge is to find suitable operational and financial procedures that allows for sustainably (and therefore commercially!) provided electricity at prices that the rural population can afford. Sunlabob has been pioneering such efforts and we are proud to have found increasingly better solutions. I am also very glad that with LIRE we have managed to establish a long term public institution that can look at these challenges and thereby support the emergence of a vibrant renewable energy sector in Laos.
How do you bikes work and how can we get hold of one?
Very nice development , the bikes are very reliable .After receiving an order we could ship it to Europe, maybe there is an option to bring it in as personal luggage to reduce shipping cost.
- Sunlabob's Bike
Sunlabob’s E-Cycle looks and works exactly the same as a normal bicycle, except the E-Cycle has a high tech lightweight battery and running gear attached to the rear wheel that can power the cycle up to speeds of 32km/h without any peddling assistance of the rider.
News from the rural electrification world
Energy Facility – Final results for the calls for proposals. What has the facility meant for private companies?
The Energy Facility Call for Proposals was divided into three components:
1) improvement of access to energy services in rural and peri-urban areas including a) Small-scale initiatives and b) Large Infrastructure projects;
2) Improvement of the management and governance of energy and;
3) Improvement of cross-border cooperation in the energy sector.
Lion’s share of the budget (91%) went to component a) with 30% being allocated to small-scale initiatives.
Within the private sector, 12 companies (6 from ACP/6 from EU) benefited from the EF grants amounting to around €30 Million out of the €196 Million allocated, to develop both small-scale initiatives and large infrastructures projects. The private sector has also been involved as a partner in another 14 projects.
The renewed Energy Facility has now been officially replenished, being endowed with €200 Million to help improve access to safe and sustainable energy services in rural and peri-urban areas. It is envisaged that the new Facility will start being implemented by the end of the year with the launch of a call for proposals.
The Energy Facility website is available on http://ec.europa.eu/europeaid/energy-facility
IPCC chief argues that climate change financing for developing countries should target supporting low-carbon technologies
In an interview with Euractive, The IPCC chief - Rajendra Pachauri, discussed issues relating to the upcoming climate debate in Copenhagen to establish a successor for the Kyoto protocol. The discussion also covered the actions needed from developed countries to assist developing countries in adaptation and to kick-start low-carbon activities in developing countries. Mr Pachauri argued that “something that could help greatly would be low-interest financing of certain technology measures by developed nations, which would make it possible for developing countries to implement some of these solutions that are based on clean technologies”.
The Alliance also believes that assisting developing countries to develop along low-carbon trajectories through using renewable energy technologies, will be crucial for the future of the planet and can have a vital impact on the lives of populations through increasing access to clean and sustainable energy. Low-interest loans from developed nations could be an effective tool to achieve these ends.
IEA - Developing countries urged to raise their game in clean energy investments
The IEA estimates that more than half of global energy investments will need to be made in developing countries if the growth in demand is to be met.
The IEA executive director – Nobuo Tanaka – has outlined the difficulty of these countries, especially Africa and India, to mobilise the levels of investment needed to meet economic growth, environmental and social development goals.
Tanaka emphasised that decisions made now for investments, could impact on the next 60 years in terms of environmental affects, so we need to ensure that all countries are making efforts to invest in clean energy sources now.
The Alliance welcomes these comments and the IEA’s effort to highlight the importance of encouraging low-carbon development. Many private companies are ready to take up the challenge. What is needed is the appropriate investment support and cooperation from international development organisation with developing country governments.
http://www.euractiv.com/en/energy/iea-chief-calls-clean-energy-new-deal/article-180655
CDM outlook
Despite a recent slowdown in carbon market activity, the long-term outlook for the Carbon market looks promising for the Clean Development Mechanism (CDM) projects, according to a recent survey by Point Carbon. Respondents (working in Carbon trading operations) foresee a rebound CDM investment even this year.
Among companies active in the CDM market, 41% of respondents predicted they would increase their carbon credit project investments in 2009, against 23% that expect their investments to decrease or stop completely. According to Endre Tvinnereim, Senior Analyst and one of the authors of the report: “This more positive outlook is confirmed by our finding that post- 2012 Certified Emission Reduction (CER) market activity has increased. Some 20% of respondents report having traded CER forwards for post-2012 delivery, up from 8% last year“.
Further CDM spending should yield further financing for renewable based rural electrification projects – financing which is greatly needed to kick-start investment and stimulate widespread uptake of renewables to enhance livelihoods in the poorest regions of the world.
http://www.pointcarbon.com/aboutus/pressroom/pressreleases/1.1079827
ADB Helps Vietnam electrify remote areas – including renewable energy development
The Asian Development Bank (ADB) is extending a US$151 million loan to help Vietnam expand and improve electricity services in poor and remote communities. The expansion supports the ‘Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project’ which will develop 5-19 mini hydropower plants to serve communities in mountainous areas as well as provide surplus renewable energy to the grid. The loan will also assist the government’s ongoing grid expansion programme.
Vietnam’s electricity coverage has surged from 51% in 1996, to 91% in 2008 in parallel with strong economic growth. Yet it is estimated that over $3 billion a year is still needed to fully electrify the country. The small hydro projects will contribute to these ambitions and will supply communities with reliable and affordable electricity supplies to improve quality of life and living conditions.
In addition, Technical assistance of $2.5 million, financed from the ADB-administered Climate Change Fund will be extended to support development of a renewable energy law and for capacity building.
http://www.adb.org/Media/Articles/2009/12852-vietnamese-electricities-services/
Rural Electrification and Renewable Energies Events: Upcoming appointments
28th May 2009: “Off-Grid Power Conference”, Intersolar trade fair, Munich, Germany.
The World’s largest solar technology trade fair and annual meeting for the industry will be held in Munich from May 27th-29th. In 2008, more than 1050 exhibitors presented their products and services and the event attracted almost 52,000 visitors from 140 countries. 2009 hopes for similar turnout.
The Off-grid Power conference is an international conference on power supply in developing countries. It takes place annually at the Intersolar trade fair in Munich, Germany. Private companies, international organisations in development and infrastructure, non-governmental organizations and entrepreneurs in the field of off-grid power supply will be participating to this event.
Finance, technical design and socio-economic conditions will be explored during the event, with a particular focus on “Micro-Finance”. Therefore, companies that are operating micro-finance projects in renewable energy supply will present their experiences. In addition, classical Micro-finance institutions will showcase their portfolios and adapt them to off-grid power supply. During the conference there will be sufficient time for networking and discussions on how to bring Micro-finance and off-grid power supply together.
ARE is a supporting organisation of this event, will organise a social event during the conference and will contribute to the conference with a speaker.
For more information please visit: www.off-grid-conference.com
30th June – 2nd July: Africa Energy Forum, Bordeaux, France. Organizers: Energynet.
The African Energy Forum will meet in Bordeaux on the 30th June – 2nd July. The conference will be attended by government ministers and utilities who will outline their vision for the future of Africa’s power supply. Private investors will also have a large presence.
Under the theme "Electrifying Africa's Future", AEF 2009 will focus squarely on the opportunities. What has been driving Africa's growth, despite a rather poor scorecard for the commissioning of public power capacity in recent years. The opportunities in the African power market are enormous. But it's the understanding of the dynamics that will provide the access. AEF 2009 will examine Africa's power sector afresh to unlock the huge future growth that must materialize.
The fact that AEF is Africa's largest power conference provides an opportunity to examine associated energy issues. The role of renewables is indispensable in rural electrification and of growing importance in energy security, besides being pivotal in combating climate change. Gas will grow in importance as fuel for power production, but its full value will only be realized through cross-border cooperation. Biofuels have courted controversy in the EU of late, but it is about time Africa put its case. The forum will cover these issues in executive dialogues held in conjunction with the main power debates.
The Alliance will be present to participate to the rich debate which will take place and to bring in its expertise. José Galindez of the ARE board will also contribute to this debate, presenting: ‘Best Practises: Are there renewable energy projects that demonstrate cost-efficient sustainability?’. Finally, we can offer to our members a discount of 50% on the participation fees.
For more information please see: http://www.energynet.co.uk/AEF/AEF2009/
Or contact: Rick Cowley, ricky(at)energynet.co.uk
9th-11th June: European Future Energy Forum, Bilbao, Spain.
In follow up to the World Future Energy Summit, the 9th-11th of June sees Bilbao, Spain welcome the European Future energy forum of 2009. The conference features the same level of keynote speakers as the World Future Energy Summit, but will focus more on the European commitments (such as the 20% of renewable energy by 2020 target) and will provide more interactive sessions to address specific issues and encourage networking between participants.
For further information please visit:
www.europeanfutureenergyforum.com