What happens when we approach energy access from a perspective of how to provide energy services instead of simply focusing on expanding the supply of kilowatt hours? Underserved populations require consideration of latent demand as well as supply options, but to do this, planners often have to change how they approach these issues.
At Practical Action and WRI’s most recent Energy Engagement Series event in Washington, DC, Gilberto Jannuzzi talked about his work in Brazil delivering energy efficiency programs for low income urban households in Brazil. He’s a champion of Integrated Resource Planning (IRP), an energy planning tool which is able to evaluate both demand side and supply side resources to best meet future energy requirements of a region. What follows is a summary of our group discussion, though, if you’d like to see some of the handouts used for talking points, you might like to read those here.
IRP looks at the developmental needs of a country, the potential for energy supply that energy service providers can deliver, and the other resources available. Integrated Resources Planning (IRP) is one tool that can help include these opportunities in an energy planning process.
At the top of this, you see the national plans set out by a government. Inside of this discussion a major part of IRP depends on setting parameters around what resources you are considering who you want to work with, etc. Our group discussed how this is often an area where the most advocacy needs to be done for disempowered groups, and it is also the area where planners really need to make sure that all voices are being heard. Once parameters are set, there is an attempt to connect the efforts of energy planners (listed along the left side inside this parameter box), and the developmental targets. Energy planning is pretty quantitative, and is within the comfort zone of the planners who are usually involved, but developmental targets are a more complex space, because they require stakeholder consultations, and inputs that come from outside the energy space. These two components are used to analyse how to use resources for given aims. In this way IRP shifts the conversation from one about how to increase kilowatt hours to how to better use existing resources.
IRP can be used to figure out how consumers will use energy, but how you determine the consumer patterns you want to have depends a lot on who is doing the IRP in the first place.
Another useful application of IRP is deciding pricing. It’s an issue for customers and utilities. Even though people may be connected they aren’t able to afford it. In addition, some of the subsidy schemes in Brazil mean that energy companies supply lighting and refrigerators as part of a required subsidy. But since they often supply high energy consuming products, their customers can’t pay for it, and stop using it a year after it is given through the subsidy. Energy efficiency really helps here, and IRP can be used to weigh the benefits of that. For example, a focus on rooftop solar pv could be used to sell energy back to the grid in poorer environments, which can then offset the cost of the service when it is used in the home, and can also help eliminate subsidies or tariffs over time.
A great example of this from Brazil was two separate utilities that looked at IRP holistically, considering resources including recyclable products. Because IRP was also looking at trash collection services, as one of the resources to consider, they realized that poor customers could pay their energy bill by recycling goods for cash in conjunction with the energy utility. As a result, more goods are recycled than would have been, and energy bills get paid. Interestingly, the price for recycled products is set on the energy content, and it is all done using the mobile phone.
Our group discussed how you might do this in other countries. For example, REDD+ programs for deforestation in Sierra Leone have an uncertain future due to a loss in funding. Our group discussed how to change accounting so it could use trees as a resource that could then pay for energy use.
One major question is who owns the IRP process. In Brazil it should go to the National Energy Commission. But this depends on the players in the energy system. For example, in some energy markets the private sector utilities might be best positioned to champion IRP, if government has issues with corruption or inefficiency.
IRP is ultimately conceptual. It won’t fit everything but it is a good approach for initial mapping, and it changes the focus from one that only talks about technology to a focus that also considers the influences around a given energy technology, helping eliminate technology bias that is sometimes common in government evaluations.
IRP has challenges getting data, and dealing with trends. From the planning perspective there is have a power balance issue, for example, in Brazil, there are serious influences for the supply side, as the hydropower sector is very powerful.
One question is who makes the call for the mix of energy use versus resource recovery. Starting with the right criteria is needed from the beginning, and it often times requires feedback from many different stakeholders. This takes time. Multi-criteria decision making assigns weights that the regulator then chooses to prioritize one effort over another. For more equity, you have to have civil society absolutely engaged, as they can better represent the needs of energy customers with less social capital. For example, In South Africa, NGOs get trained to do IRP. If you target groups that can serve as multipliers, that can be a good strategy.
But it also sheds a light on a different part of this discussion: TVs and refrigerators are often times the first things that populations want when they get energy access. But perhaps there is a time when a call should be made to prioritize one energy approach over another.
The IRP approach sometimes brings out the need for soft support, for example, teaching people on usage, changing values etc. One example of this was a solar and diesel plant in the Amazon which ran well, but then users began to use refrigerators, which pushed the need for diesel power. To overcome this, they looked at replacing refrigerators and build an ice factory that could use solar power instead, but the challenge was that refrigerators had such a strong cultural link, which would require more of the soft side of engagement.
At the same time, IRP is only as good as those that use it. For example, South Africa, by law, is supposed to use IRP, but in our meeting people stated that in practice, the result is that the choice comes down to bringing on whatever ESCOM the utility wants. IRP may still help with thinking that through, so even in this case, South Africa has made some decisions that show its influence.
One issue that was also found in Brazil is that planners are not always interested in overall savings. They don’t do planning to provide for undeserved people. IRP is a different way to consider supply, thinking about how to alter where resources go, using the same energy supply and giving it to different groups. But the concept is still tough to grasp, because planners are often thinking about how to get more kilowatts into an energy system, not how to use what they have more efficiently.
In addition to being a fellow at WRI, Jannuzzi is also the Executive Director of the International Energy Initiative , a Southern-conceived, Southern-led and Southern-located South-South-North partnership.
If you’d like to join us at a future Energy Engagement Series event in the US, join our mailing list by clicking here. Next month’s event will be on how health centers and schools can be used to bring energy into communities that otherwise wouldn’t have access.No Comments » | Add your comment
The following is a guest post from Lily Ordano, an Associate with the Energy Program and the World Resources Institute (WRI). Practical Action is working in conjunction with WRI to produce a monthly Energy Engagement Series in Washington, DC, which focuses on energy access issues around the world.
The anchor-tenant approach in mini-grid development is considered a promising method for promoting the financial viability of mini-grids in expanding energy access. The approach focuses on securing a ‘reliable load’ for energy service companies to provide electricity to populations without access. In rural communities with very limited demand anchor loads, like cell phone towers, may provide the scale of demand needed to make mini-grid operations financially viable for energy service companies.
In this month’s Energy Engagement Series, we discussed the challenges and opportunities that come with this approach in the latest edition of the Energy Engagement Series – a monthly, salon-style discussion focused on energy access issues hosted by the World Resources Institute and Practical Action. This month’s event featured panelist Clare Boland, Associate Director and VP for Innovation and Strategy for the Rockefeller Foundation, who shared the Foundation’s experience implementing this method in India. Experts from both policy and practice arenas also gathered to share ideas and experiences in this growing area of mini-grid development.
The key takeaway from the event is that much remains to be learned about the anchor-tenant approach and there is an obvious need for knowledge sharing amongst actors implementing this method in mini-grid development.
Here are some more outcomes from the discussion:
- The anchor tenant and consistent demand: Mobile phone towers have been seen as attractive candidates for this approach primarily because they represent consistent demand. The amount of power needed by a cell phone tower is predetermined and comes with no seasonal variations. An anchor tenant such as an agro industry, on the other hand, is associated with a great deal of uncertainty owing to the seasonal nature of agriculture. This makes the agro-industry an unattractive anchor tenant to some participants.
- The anchor load approach comes with much operational complexity. Satisfying the needs of an anchor customer could be challenging given the anchor tenant’s demand for quality and consistent power. For mobile phone towers, down times below 99.5% could mean a potential loss of market for entrepreneurs. Energy service companies must have the capacity to provide anchor tenants with the highest quality services required to ensure their continued patronage.
- Experiences with the anchor tenant approach indicate that anchor tenants are often disinterested in providing electricity to communities without access beyond CSR commitments (in India, for example, companies are required to invest in CSR-corporate social responsibility). The major driver for mobile phone tower operators who buy into this idea is high diesel costs. The need to have an assured alternative supply of electricity at a reasonable cost is the major determinant of an anchor tenant’s decision to participate in this approach. That an energy source is from renewables or satisfies community energy needs does not in itself serve as sufficient reason for an anchor customer to buy into the approach.
- In this discussion there was a general recognition of the critical role that community engagement plays in ensuring the sustainability of mini-grids over time. Willingness to pay for electricity services is critical and community engagement is necessary for obtaining the needed willingness to pay information.
- Even though the anchor tenant approach is seen as a promising approach with the potential of ensuring the financial viability of mini-grids, it is itself laced with some uncertainties. Questions remain about the impact of potential changes in demand resulting for instance, from the adoption of more efficient technologies by the anchor tenant. How well positioned are energy service companies to meet the necessary potential growth in demand as household and productive use loads in local communities grow?
- Balancing anchor tenant needs and the needs of the energy poor. Even though some participants saw the anchor tenant approach as key to providing the critical demand that ensures the financial viability of energy service companies it’s important to keep in mind that the approach runs the risk of prioritizing anchor customer needs over community energy needs. To this end, we discussed how anchor loads could be linked to other development efforts. For example, a computer center providing social/educational benefits could serve as an anchor load. In this case, the anchor load itself may provide direct development benefits for the recipient communities.
- Discussions on energy access should ensure a sustained focus on energy efficiency as a critical input for driving down the overall potential demand that will have to be met. The role of super-efficient appliances in driving down demand especially in energy constrained areas with significant energy access challenges needs further exploration.
So, what do you think? Are anchor tenants the key to supplying energy to the world? Or is it one of many tools in a toolkit that we need to consider as we try to expand energy access? Let us know in the comments below, or, better yet join us for our next event!
The Energy Engagement Series is a monthly event in Washington DC hosted by WRI and Practical Action. We are very excited for next month’s event on May 12, which will focus on the nexus of agriculture and energy. Practical Action’s own Aaron Leopold will be one of our featured speakers for the event. If you’d like to sign up to join us, click here.1 Comment » | Add your comment
Practical Action, the World Resources Institute, and the United Nations Foundation are pleased to launch our first in a series of discussions on bringing energy access to the rest of the world. This series will focus on bringing together both policy and practice actors who focus on mini-grid, off-grid, household energy, integrated resource planning, and our other established areas of expertise. We expect this will be a great environment for a comprehensive look at different approaches to meeting energy challenges.
Our first topic, Bringing Policy and Practice together, will focus on several issues. How does energy access for all play out in policy and practice, and how can we work together to address some of these issues? How can actors such as the private sector and civil society play innovative roles to change the conversation about how energy is generated and delivered?
Ms. Allison Archambault, EarthSpark International
Mr. Jem Porcaro, United Nations Foundation
Dr. Ryan Shelby, USAID
Ms. Davida Wood, WRI
We will take a salon style approach, where distinguished panelists are featured, but the audience size is limited in order to encourage open and active audience discussion. The first 5-15 minutes focus on the invited panelists and their expertise, but audience members are invited ask questions and provide their own insights throughout. All attendees should come expecting to participate! The goal is to get feedback from a variety of actors from different sectors. Practical Action will moderate to ensure that the discussion is inclusive, stays on topic, and finishes on time.
Thursday, November 6, 2014
8:30 AM-10:00 AM
World Resources Institute
10 G Street NE Suite 800
Washington, DC 20002, USA
Metro: Red Line, Union Station stop, WRI is west of Union Station.
To RSVP for this event, CLICK HERE.
People think big at the beginning of the day, but we know some of you may need help. Coffee and refreshments will be provided.3 Comments » | Add your comment