how advance market commitments could scale up sustainable biomass energy in africa
DESCRIPTION
GVEP International has just published a Policy Briefing on innovative finance mechanisms and how they could be used to scale up investments in low carbon technologies in Africa. The two case studies examined were presented at a DFID sponsored policy conference at Chatham House in London on 28th January. Here is the presentation. For more information about the policy briefing: http://www.gvepinternational.org/news/165/TRANSCRIPT
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How AMCs could scale up sustainable biomass energy in Africa
Chatham House, 27th-28th January 2010
Simon Collings
GVEP International
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Contents and objectives
• Using the theoretical input from Vivid Economics and Chatham House we present two examples how it could be translated into practice
• Focus on biomass and energy efficiency solutions as this remains the largest contributor of greenhouse gases in many low-income developing countries, especially sub-Saharan Africa
• Present two case studies on briquettes and Earth Bricks that show how AMCs could be designed in practice
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Our case studies
• Sophisticated and innovative technologies which are already cheaper or at least near break even point to conventional high-carbon substitutes but risks prevent up-scaling.
• AMCs could help to create viable low-carbon industries, without relying on subsidies.
• Focus on biomass and energy efficiency case studies because these areas are highly important from a low-carbon perspective.
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Why tackle biomass?
• 80% of Africans rely on biomass to meet their energy needs
• 4 million ha of forest disappear in Africa per year due to non-commercial harvesting to meet energy needs.
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Why tackle biomass?
Tanzania, areas of unsustainable wood harvest in red (FAO, 2005).
• Emissions from biomass burning in Africa are more than 5 times those of fossil fuels and double that of other land use.
• Contribution of soot (black carbon) to climate change plays a greater role in warming than previously thought.
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Innovation to diffusion
(UNEP 2009)
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Common barriers to adoption
• lack of awareness because the technology is not widely available
• no economics of scale due to small market share at the moment
• variable quality and low availability restrain scale-up from an entrepreneurial to a semi-industrial scale
• access to finance for entrepreneurs
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The technology:
• Sustainable substitute to charcoal, made out of agricultural waste or saw dust.
• Product at early stage of diffusion, small-scale manufacturers already exist in various African countries.
• Cheaper and with desirable properties – burns longer
• Lack of awareness and large supplies hamper wider adoption of the technology.
Case study 1: Briquettes
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more than 70 manufacturers of briquettes in the UK alone
more than 70 manufacturers of briquettes in the UK alone
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Prices already cheaper or break even with charcoal
➤ No subsidies required
➤ Donor funding can concentrate on strengthening capacity of suppliers to be able to react to a market ‘pull’
Case study 1: Briquettes
Firewood Charcoal Briquettes
Nairobi 6-7 6-20Ranen Market
4 12 8
Kakwara Market
4-7 4
Kilifi 3 4-9 50Nyeri free 7 8
Prices for Briquettes and its conventional alternatives as heat equivalent (US$/GJ) for some locations in Kenya
(GVEP International)
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Commitments from institutions such asschools, army bases and hospitals to substitute an increasing percentageof their current charcoal consumptionwith briquettes.
➤ creation of demand
➤ scaling up of production and achieving economics of scale
➤ increased awareness, reduced prices, industrial quality
➤ enhanced uptake in the general population
➤ increased market share compared to charcoal
This could make them more widely available and create a viable low-carbon industry
Case study 1: Briquettes
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Case study 2: Earth bricks
The Technology:
• no need to fire the bricks – reducing unsustainable use of biomass and cement.
• Tested and approved but not yet adopted at scale – DfID funded 4,000 schools in Malawi
• Beneficial for the local economy as presses are manufactured in some African countries.
A hotel constructed to 100% with compressed earth blocks
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Case study 2: Earth bricks
Earth Bricks
$ 99
Fired bricks
$ 116 (+18%)
Concrete blocks $ 149
(+50%)
Cost savings of 20% or more compared to conventional alternatives
➤ No subsidies required
➤ Donor funding can concentrate on strengthening capacity of suppliers to be able to react to a market ‘pull’
Construction costs are cheaper for Earth Bricks than for the alternatives (US$/m2)
(GoodEarthTrust)
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Case study 2: Earth bricksCreating the demand would stimulate the
business to become self-sufficient and reduce cost per unit.
Governments could agree on fixed prices for each school build – this can be cheaper than conventional costs
➤ creation of demand
➤ scaling up of production and creating learning effects
➤ enhanced awareness and uptake in the construction industry
➤ increased market share compared to fired bricks and cement
Earth bricks waiting to be used
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Design considerationsDesign of programme and support of suppliers very important
• Consumption patterns and conditions for supply may vary from region to region
• Balance of supply and demand need to be carefully calibrated
• Entrepreneurs will need appropriate technical and business training, access to finance to react to additional demand
• Promotion very important – position as aspirational products
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Contact
Simon Collings
Chief Operations Officer
GVEP International
73 Wicklow Street
London WC1X 9JY
United Kingdom