integrated rural electrification

Integrated Rural ElectrificationLeonardo Energy Webinar

8 May 2015

Allison Archambault

2EARTHSPARKI N T E R N A T I O N A L

INTEGRATED RURAL ELECTRIFICATIONE N E R G Y S U P P L Y I S L E S S T H A N H A L F O F T H E E Q U A T I O N

Objectives

• Discuss evolving models(supply ≠ demand)

• Market segmentation: bull's-eye or stair step

• Become and efficiency activist

• Identify accompanying opportunities



EarthSparkInternationalWe build clean energy access in Haiti.

R+DIncubationSocial enterprises

ENÈJI PWÒP: CLEAN ENERGY RETAIL





EKO PWÒP:

“SMART GRID” FROM SCRATCH

SPARKMETER: LOW COST, HIGH FUNCTIONALITY SMART METERS



POWERING AGRICULTURE

MICROGRID

EXPANSION

• 54 430 customers

• Diesel hybrid solar-diesel

MILL ELECTRIFICATION

• Tap microgridelectricity to improve quality and reduce costs

BREADFRUITPROCESSING

• Extend shelf life from 3 days to 18 months



SUPPLY IS < HALF OF THE EQUATION



MILL ELECTRIFICATION



BREADFRUIT PROCESSING



THE PROBLEM

NO ELECTRICITY=LOW PRODUCTIVITY



THE GOAL

AFFORDABLE, RELIABLE ELECTRICITY=UNLOCKED POTENTIAL

CHILDREN CAN STUDY

BUSINESSES STAY OPEN

ENABLES REFRIGERATION

BETTER HEALTH OUTCOMES

VALUE-ADD TO AGRICULTURE



VIRTUOUS CYCLE

Agricultural businesses strengthen

the grid.

The grid unlocks

agricultural value.





Central grid

ENERGY ACCESS MARKET SEGMENTATION BY LOCATION AND CONSUMPTION

Grid extension + infill

Microgrids + captive

[Battery charging

+ nanogrids]

Stand-alone systems

(small and large)



MARKET SEGMENTATION WITH MULTI-TIER MATRIX MEASURING ACCESS TO HOUSEHOLD ELECTRICITY

Source: ESMAP “A New Multi-Tier Approach to Measuring Energy Access”

THE “PERFECT” IS THE ENEMY OF THE GOOD

Is central grid electricity an option for rural electrification in Haiti?



200 MW

11 MW

16 MW

8 MW 4 MW

5 MW

LOCATION AND CAPACITY OF CENTRAL GRIDS IN HAITI



18

STATE OF EDH OPERATIONS IN

HAITI• 25% capacity factor from EDH assets

• ~$0.35/kWh tariff

• Very high losses, low cost recovery:• “EDH only brings in revenue for barely 20% of the electricity it put

out. The other 80% is covered by state subsidy…” (1/22/2013) [1]

• Official EDH numbers are more generous: ~50% losses; ~18%

technical/32% non-technical (November, 2006) [2]

• Varying reliability in most central grids, from 6

hrs/day to 20-24 hrs/day

EARTHSPARKINTERNATIONAL

WORLD BANKOFF-GRID ELECTRICITY5/6/2015



THE “BEST” SOLUTION

Are microgrids best for rural electrification?

• It depends

• Much can go wrong

• Multi-disciplinary planning and community partnership are key

• Technical note: HOMER

• Avoid ‘dump and run development’

• What is the long-term plan?



PRIORITIZE ENERGY SERVICES NOT KWH



MULTI-DISCIPLINARY MARKET STUDY



MICROGRID COST STRUCTURE

• Household distribution is highly dense, so

marginal connection cost is small – very low

per-customer costs

• Partial recovery of per-customer fixed cost

through a fixed connection fee

• Not all revenue collected is through pay-as-

you-go.• Larger customers make up ~30% of load • Extremely reliable demand• Some pay for electricity on monthly, post-pay basis. • Some pay via PPA – long-term “bankable” contract for energy



BENEFITS OF PRE-PAY AND PAY-AS-YOU-GO

• No cost to collect payments

• Perceived as more fair to customers who are

not always present

UNLOCKING THE BUSINESS MODEL• Many components to success.

• Technology is essential – low-cost smart

metering system




EFFICIENCY



EFFICIENCY:

#wastelessdomore




ACCOMPANIMENTValue Chain Synergies



ACCOMPANIMENTValue Chain Synergies

Fuel switching

(transit + cooking)

VIRTUOUS CYCLE

Productive businesses strengthen

the grid.

The grid unlocks

productive use value.





ACCOMPANIMENT• Value Chain Synergies

• Fuel switching

(transit + cooking)

• Agriculture +

Conservation

• Feminist Electrification



Conclusions• Business models are evolving

(supply ≠ demand, smart meters, storage, finance)

• Market segmentation is both bull's-eye and stair step

• Everyone needs to be an efficiency activist

• Accompanying opportunities can augment the bottom line and enhangesocial benefits

THANK YOUEarthSpark International

Allison [email protected]

ENERGY POVERTY IS EXPENSIVE

75% of households without electricity access in Haiti

Households spend • $10/mo. on kerosene & candles• $4/mo. on cell phone charging



33

STATE OF IPP OPERATIONS IN HAITI• Despite high PPA rates, EDH is an unreliable off-taker:

• E-Power, backed by IFC, is newest IPP in Haiti. 30 MW HFO plant began operations on January 13th, 2011. [1]

• “Delivery of energy interrupted for nearly 3 months because of lack of financial resources to buy fuel needed to operate the [E-Power] plant, due to government debt over 12 million representing 3 months in arrears.” (5/10/2013) [2]

• “…Electricity d’Haiti (EDH) can devote only 20% ($1 million) of its monthly revenues to pay the suppliers. In addition, the public treasury provides a monthly subsidy of $5 million, bringing the envelope to $6 million. However, the invoice of the 3 providers is $12 million dollars monthly…due to the arrears, the E-power company decided on June 19, 2013 to turn off its engines connected to the network of Electricity d’Haiti.” (6/27/2013) [3]

• High cost of IPP generation: $0.15 - $0.16/kWh for

HFO; $0.22 - $0.26/kWh for LFO plants

EARTHSPARKINTERNATIONAL

WORLD BANKOFF-GRID ELECTRICITY5/6/2015



CHALLENGES FOR PAY-AS-

YOU-GO MICROGRIDSChallenge Counterpoint

Heavily subsidized central grid tariffs are less expensive

While subsidized, central grid tariffs in Haitiare a relatively high $0.35/kWh

Un-electrified households do not spend sufficient sums on energy services

Households spend an average of $14/household/mo.

Cost structure: cash flow mismatch between customer payments and debt service on fixed costs

Let’s talk about this in more detail…

