scaling -up off-grid electrification: lessons from ... · march 15 th 2012, durban. ... • will be...

Scaling-up off-grid electrification: Lessons Scaling-up off-grid electrification: Lessons from international experience

DEPARTMENT OF ENERGY ELECTRIFICATION INDABA

Pepukaye Bardouille

March 15th 2012, Durban

Asia has the largest number of off-grid population in the world while Africa has the least electrification rate

78.0%

41.9%

93.4%89.5%

99.8%93.9%

68.9%

98.8% 98.6% 100.0%

68.8%74.0% 72.2%

99.5%

50%

100%

Electrification rate (%)

Region wise electrification rate (2009)

Overall Urban Rural

1442

796

800

1200

1600

Unelectrified Population (in m

illions)

Region wise electricity access (2009)

2

Note: The electrification rates reflect actual number of people with no access to electricity. These numbers are different from the numbers based on

electrification definition by certain country governments (such as India)

Sources: International Energy Agency; Intellecap Analysis

Key insights

• 55% and 41% of the off-grid population in the world are in Asia and Africa respectively

• 22% of the population (~796 Mn) in Asia do not have access to electricity; Rural Asia has an electrification rate of 68.8%

25.0%

0%

Asia Africa Latin America

Middle East

Transition economies and OECD countries

Electrification rate (%)

Region

587

31 22 30

400

Unelectrified Population (in m

illions)

Region

Seven countries constitute ~85% of the off-grid population in Asia; India alone accounts for ~50%

404

grid

po

pu

latio

n (

in m

illio

ns)

Country wise population with out access to electricity (2009)

South Asia East Asia and PacificMiddle East

and

North Africa

796 Mn

Other Asian Countries

3

96

175

82

44

11 10 2 1 1 0.3 8 0.2

68

241

170 8

Ind

ia

Ba

ngla

de

sh

Ne

pa

l

Sri L

an

ka

Ind

on

esia

La

os

Ca

mb

od

ia

Ph

ilip

pin

es

Vie

tna

m

Ea

st T

imo

r

Th

aila

nd

Ma

laysia

Ch

ina

Mo

ngo

lia

Pa

kis

tan

Afg

ha

nis

tan

Bu

rma

(M

ya

nm

ar)

No

rth

Ko

rea

Ta

iwa

n

Oth

er

Ea

st

Asia

Off

-grid

po

pu

latio

n (

in m

illio

ns)

•3

Sources: International Energy Agency; Intellecap Analysis

34% 59% 56% 23% 35% 45% 76% 10% 2% 78% 1% 1% 1% 33% 38% 84%% of Off-grid pop. for

each country

87% 74% 1% 83%

Cambodia

Bangladesh

Agenda

4

Bangladesh

India

Cambodia is characterized by a very low electrification; batteries and kerosene are dominant in off-grid areas

24%

99%

62%

38%

45%

36%

24%

42%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f H

Hs

Distribution of HHs by primary source of lighting (2007)

Electricity

Battery

Kerosene

• ~ 1.12 Mn HHs use batteries

as primary source for lighting

– Rural ~1.08 Mn HHs

– Urban ~0.04 Mn HHs

• ~ 1.06 Mn HHs use

© 2010 Intellecap. All rights reserved •5

Source: Housing Conditions 2007 (NIS) , Intellecap analysis

24%

11%

0%

14%

0%

24%

0%

10%

20%

30%

Cambodia Phnom Penh

Other urban Other rural

Kerosene

~ 2.94 Mn

To

tal N

o. o

f H

Hs

~ 0.26 Mn ~0.29 Mn ~ 2.39 Mn

kerosene for lighting

– Rural ~1 Mn HHs

– Urban ~0.06 Mn HHs

Battery and kerosene are primary sources of lighting in the off grid HHs

Government plans to electrify 12,000 villages by 2020…

Government electrification plans to

2020 include several technologies

Government electrification plans to

2020 include several technologiesAs per the plan, 12,000 villages to be

electrified using SHS by 2020

As per the plan, 12,000 villages to be

electrified using SHS by 2020

• To achieve 100% village electrification1 by 2020 including battery lighting

• A rural electrification plan has been formulated consisting of:

• Grid extension by EdC

600000

168000200000

400000

600000

137 3071 392 1720# of

villages25885


• Decentralized mini-grids powered by micro-hydro, biomass, and diesel

• Solar home systems (SHS) and solar battery charging systems (BCS)

1. Village electrification is different from Household electrification

2. Villages that have poor access to even battery lighting today are target for electrification through Solar BCS and SHS;

Villages with access to battery lighting today through private diesel charging stations are targets for mini-grid

Source: Master plan study on rural electrification by renewable energy, JICA, 2006

9000

168000

23000 6000012000

0

200000

Target No. of Households for Electrification by 2020

• Proposed electrification plan is to be achieved in 4 phases between 2005-2020

• Will be reviewed every 4 years

…with some 50% of HH receiving off-grid power

52.70%

24%

8%

HH electrification plan by 2020Total: About 900,000 HH

• Villages outside 40 km from the provincial capital cannot be electrified

• 3,000 villages out of 12,000 are considered as only off grid candidates


52.70%

15.30%

HH not electrified Electrified as of 2004

Grid Electrification Minigrid

only off grid candidates

• 20% of villages are considered outside of “possibility of grid electricity”

Source: Master Plan Study on Rural Electrification by renewable energy in the kingdom of Cambodia (JICA), Intellecap analysis

Roles of key players in Cambodian Electrification Plan

Government of CambodiaDonors

Financial andTA providers

TA, grant, loan

TA, grant, loan

Grant Loan

Capacity building, subsidy

Capacity building, subsidy

Cross subsidy from grid users

Grant


1. Rural Electrification Fund 2. Rural energy enterprises 3. Community electricity CambodiaSource: Master plan study on rural electrification by renewable energy, JICA, 2006

Electricity providers

Beneficiaries ofmini-grids & SHS

Provincial Government

Grant Loan

Service providers

Electricity supply

Grant

Issues to be addressed to support growth of SHS market

Affordability

Lack of awareness

Poor quality products

• High upfront cost of the systems is a major barrier • Poor credit mechanism for consumers to finance purchase of SHS; Low

willingness of MFIs to extend solar loans; Limited outreach of MFIs in remote areas

• Only10-20% of rural consumers are aware of solar energy and its benefits • Private solar companies do not possess capacity to build awareness nor do they

perceive it as their responsibility

• There is a huge influx of poor quality products in Cambodia from China • Absence of standards and regulations to govern product and installation quality • Some battery retailers and shops sell cheaper low quality solar lanterns and SHS


products

Poor maintenance infrastructure

• Some battery retailers and shops sell cheaper low quality solar lanterns and SHS

• Lack of local market for spare parts – all products are imported• Lack and quality of professional staff for servicing of SHS

Difficult accessibility • Difficult accessibility of remote areas in Cambodia

Financing for companies

• Banks expect a high collateral and high interest rate (~18-20%)• Absence of private equity

Agenda

Cambodia

Bangladesh

10•10

Bangladesh

India

90% of off-grid households in Bangladesh are in rural areas

1694615079

4000

6000

8000

10000

12000

14000

16000

18000

No. of H

Hs in 0

00’s

Distribution of off grid HHs in Bangladesh (2008)

89%

11%

% of total off-grid HHs in India

11•11

18670

2000

Total Rural Urban

11%

Source: IEA, Intellecap analysis

Electrification Rate (2008) 41% 28% 78%

Electrification Rate (2009) 41% n.a. n.a.

According to unofficial estimates, over 70% of population (~110 Mn) is either off-grid or under-electrified facing significant power outages on a daily basis

Kerosene is the main source for lighting in off-grid areas

44%

98% 99% 100%

92%97.20%

50%

60%

70%

80%

90%

100%

% o

f H

Hs

Distribution of rural HHs with various sources (primary and secondary) of lighting (2004)

No. of HHs using kerosene does not change with electrification rate across regions in BangladeshNo. of HHs using kerosene does not change with electrification rate across regions in Bangladesh

12•12

39%44%

11%

20%

29%

0%

10%

20%

30%

40%

50%

Chittagong Dhaka Khulna Rajshahi All Divisions

% o

f H

Hs

Region

Electricity Kerosene

Source: Bangladesh’s Rural Energy Realities (World Bank), Intellecap analysis

Kerosene is the main source of lighting in the off grid HHs

IDCOL solar program was launched in 2003 under Rural Electrification and Renewable Energy Development Project of the World Bank

• Infrastructure Development Company Limited (IDCOL), a government owned financial institution, supported by

international donor agencies and governments, implements SHS program in Bangladesh to promote off-grid solar

lighting (only SHS).

• Part of the Rural Electrification and Renewable Energy Development Project (REREDP) of the World Bank.

• The program is valid only for off-grid lighting areas as recognized by the government of Bangladesh

SuppliersSupply of solar home systems (SHS)

Partner Organizations (PO)Donor agencies

13•13

Program aims to leverage strengths of

each partner / stakeholder

Partner Organizations (PO)Expertise in micro-finance

IDCOLTechnical and promotional support

Donor agenciesProvision of necessary financial support

Independent committeesExperts in relevant fields

Source: IDCOL

IDCOL program has been successfully driving the SHS market and accounts for nearly all SHS installations in Bangladesh

Sequence of steps

1. PO installs the system

at the consumer

household

2. PO makes electronic

disbursement request to

IDCOL for refinance

and grants, as

applicable

3. IDCOL conducts

physical verification of IDCOL Consumers

Donors(World Bank, ADB, KfW,

GTZ, SNV and IDB)

Partner Organizations (POs)- NGOs

SHS/ component Suppliers1

Provides grants and soft loans for SHS program

Provides grants and soft loans (for redirecting

Distributes, sells and

installs SHS;

14•14

1Note: Most NGOs procure components such as solar panels, batteries, charge controllers, lights and assemble SHS such as Grameen Shakti while

few others procure complete systems

Source: IDCOL presentation at DIREC 2010; Intellecap Estimation and Analysis

the SHSs installed

4. IDCOL releases grants

and refinance amount

only if the inspection

result is satisfactory

5. IDCOL makes the

disbursement within 21

days from the receipt of

disbursement request

6. IDCOL monitors PO’s

performance

(POs)- NGOs MFIs and PBS

(for redirecting and

refinancing)

Financing terms to PO• Soft loan: 80% of the SHS price for refinancing

(cap of 230 USD per system), 10-year maturity with 2-year grace period at 6% p.a. interest, no collateral or security except for a lien created on project accounts

• Grant subsidy: ~USD 30 as grant subsidy per SHS per HH to be redirected to end-consumer

Credit terms to consumer• 15% down payment• Loan tenor varies from 1 year to 5

years- generally it is 3 years• Interest rate varies from 4 to 6% per

annum• Repayment frequency is monthly

installs SHS; provides loanLoan repayment

Loan repayment

600

760

980

1210

800

1000

1200

1400

No. of units insta

lled a

nnually

in 0

00’s

No. of SHS installed annually through IDCOL

The programme has reached 1 million households since 2003

42 %

3020

4230

2500

3000

3500

4000

4500

Cum

ula

tive n

o. of units insta

lled in 0

00’s

Cumulative SHS installed through IDCOL1

117 %

~4%

(2010)

as % of current off-grid households2

~25%

(2014)

15

25 25 25 25

90 94 101

295

600

0

200

400

600

No. of units insta

lled a

nnually

in 0

00’s

•15

1Sales figures are approximated from the graph in “IDCOL solar home systems model” presentation by IDCOL2 ~15 Mn Off-grid households in Bangladesh

Source: Overview of the policies - Bangladesh (RENDEV), IDCOL solar home systems model, Financial model design- Bangladesh (RENDEV), Intellecap

Analysis

51%

25 50 75 100190

284385

680

1280

2040

0

500

1000

1500

2000

2500

Cum

ula

tive n

o. of units insta

lled in 0

00’s

60%

Agenda

Cambodia

Bangladesh

16•16

Bangladesh

India

Husk Power: Mini-utility OverviewPaddy Fields

Rice Mill

Farmers supply all their paddy crop to the rice mill for processing;

Husk is transported using tractors / bullock carts from the rice mill to the plant compound; ensure landing

price is not more than INR800 per ton

�Husk Power System provides electricity for 6-8

hours each day usually from 6 pm to midnight;

�Domestic consumers can light 2 bulbs and a

fan, and commercial users 2 bulbs and a water

pump. Tariff ranges from INR 80 per household

to INR 150 for commercial users per month;

�HPS maintains plants uptime of 93%.

17

Husk Power Plant

Husk Storage Space

30 – 50 kW power plant

Circuit Breaker

Home Clusters

HPS provides point to point connection in each

of households who subscribe to HPS’s services. The entire

distribution network is set up by HPS and the

cost is included as part of the total project cost

To mitigate stealing of power, HPS has circuit breakers for each pool of

houses which shut down if the average consumption exceeds 18-

20% of the registered usage capacity

scaling -up off-grid electrification: lessons from ... · march 15 th 2012, durban. ... • will be...

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