boiling point 62

Theme

Boiling PoinT / 54 / 2008

Access to Finance: Subsidies, Investments and Carbon Funding

Global crowd funding to increase affordability of biogas – p2

Debt financing for solar powered lighting and vehicles in India – p6

Overcoming risks of carbon finance through a cooperative approach – p9

Driving capital into the clean cooking sector – p36

plus toolkit for small-scale carbon projects, frequently asked questions on cookstoves, and more…

ISSuE 62 — 2014 £5

A prActitioner’s journAl on household energy, stoves And poverty reduction

A publication of the

www.hedon.info

Boiling Point is a practitioner’s journal for those working with household energy and stoves. It deals with technical, social, financial and environmental issues and aims to improve the quality of life for poor communities living in the developing world.

Welcome…to the latest edition of Boiling Point. We strive to make the journal as accessible and participative as possible, and welcome any comments or suggestions by email or post. Please see the inside of the back cover page for details on how to contribute papers to future issues. Boiling Point is published by the HEDON Household Energy Network (www.HEDON.info).

editorial boardDick Jones (independent), Andrew Barnett (The Policy Practice), Dr Kavita Rai (IRENA), Dr Grant Ballard-Tremeer (Eco Ltd)

issue 62 teamMarion Santini and Marion Verles (Nexus-Carbon for Development), Lizzie Norris, Mohamed Allapitchai, Wiehahn Carstens, Elaine Meskhi

Opinions expressed in articles are those of the authors and not necessarily those of HEDON. We do not charge a subscription to Boiling Point, but welcome donations to cover the cost of production and dispatch.

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Website linksLook out for the @HEDON link at the end of each article. This easy to use feature links directly to the online version of the article, together with extra weblinks and resources.

We would like to extend our thanks to our sponsors: GACC, GIZ and Practical Action for financial support towards this edition. This journal is co-funded by the EC

through the project ‘Energy Access for the poor in Sub-Saharan Africa to meet the Millennium Development Goals’.

issn 0263-3167 (print)issn 1757-0689 (online) Cover photo: Carbon programme registration, South Pole Carbon & Envirofit, (Photo Credit: Jeanine Reutemann)

ContentsThemeEditorial: Access to Finance: Subsidies, Investments & Carbon Funding 1

Global crowd funding to increase accessibility 2 for small-scale biodigester projects Rachel Smith, Alexander Eaton, Humza Arshad, Paul Ricketts

Creating ecosystems of change by 6 inspiring custodianship for the environment Vijay Bhaskar, Sudeshna Mukherjee

Scaling up household energy projects through 9 climate and carbon finance: The potential of regional incubation facilities Samuel Bryan, Marion Verles, Marion Santini

Promotion of improved cookstove use in Nepal: 17 A case study on accessing carbon revenue through a national level voluntary carbon market Sandeep Joshi, Binod Prasad Shrestha, Dipendra Bhattrai, Nira Bhatta

Voluntary carbon offsetting: A growth market 24 Olivier Levallois

Viewpoints Interview with Richard H. Lawrence, Proyecto Mirador 13Interview with Mansoor Hamayun, BBOXX 26

Helpline Expert response by Andrew Barnett and David Fulford 20 Expert response by Magnus Wolfe Murray 21

ToolkitFinancing household technology projects: 22 A tool to assess the suitability of carbon finance Marina Gavaldao, Samuel Bryan, Marion Santini

HEDON NewsLatest news from HEDON Authors: Liz Bates, Mohamed Allapitchai 29

GIZ NewsLatest news from GIZ Editors: Katja Diembeck, Monika Rammelt 30

Practical Action NewsLatest news from Practical Action Editors: Abbie Wells, Toby Milner 32

Nexus NewsLatest news from Nexus Editor: Marion Santini 34

GACC NewsLatest news from GACC Editors: Jennifer Tweddell, Stephanie Valdez 36

General Locally manufactured open source hardware 38 small wind turbines for rural electrification K. Latoufis, A. Gravas, G. Messinis, N. Hatziargyriou

How to make a Heat Retention Box 42 Sjoerd Nienhuys

Call for papersBoiling Point forthcoming themes 49

Design by Dean Ford Creativity Ltd. +44 (0) 20 7000 1055 www.deanfordcreativity.com

www.HEDON.info/NGUN* Full article online* Author profile and latest contact details* Article websites

Meet us @HEDON

Boiling Point. issue 62 — 2014

EDITORIAL

1

Dear Readers,It is our pleasure to introduce this latest edition of Boiling

Point which looks at the critical issue of financing. Over the recent years, financing has become an increasingly complex topic with the emergence of so called “innovative financing mechanisms”: carbon finance, crowdfunding but also guarantees or debt instruments to name a few. The range of options now available to household energy project developers has increased, hence the need to catch up with these recent developments and make the most of these new opportunities. In this edition, you will find out how these financial innovations can serve household energy projects: crowdfunding for biodigesters in Mexico, debt financing for solar mini grids in India, carbon finance for biodigesters and ceramic water purifiers in South East Asia.

Carbon finance is at the center of many discussions on financing. With the recent crisis in the European Trading Scheme, project developers now wonder whether carbon finance is still worth it. High transaction costs, long lead-in times, uncertain selling prices make it a risky investment for most household energy project developers. How to assess whether carbon finance is right for your project? How to mitigate risks and make the most of carbon revenue? A series of articles featured in this edition will help you navigate the carbon markets and take the right decision for your project. A case study by Nexus-Carbon for

Development on page 9 sheds some light on how risks associated with the carbon development cycle can be mitigated through the cooperative approach. For a practical assessment of whether your project is eligible and how much revenue can potentially be generated, do not miss the Toolkit on page 22, which presents an open source tool developed by the Group for the Environment, Renewable Energy and Solidarity (GERES) to help project developers assess the suitability of carbon finance. Finally, if you want to know what buyers have in mind when purchasing carbon credits and how to make your project attractive, read the article by Carbon Clear on page 24.

Without the leadership of change makers, finance alone would not be sufficient. In the two viewpoint sections of this edition, you will discover the exciting stories of Richard Lawrence, founder of Proyecto Mirador and of Mansoor Hamayun, founder of e.quinox and BBOXX. Richard and Mansoor have challenged conventional approaches and developed innovative solutions to the energy access conundrum. Read more about Richard’s cookstove success story on page 13 and Mansoor’s approach to rural electrification on page 26.

We hope you enjoy reading this edition!

Nexus-Carbon for Development and Boiling Point

EditorialISSUE 62

Access to Finance: Subsidies, Investments and Carbon Funding

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Global crowd funding to increase accessibility for small-scale biodigester projectsKeywords: Biogas; Biodigester; Manure management; Micro-finance; Crowd funding; Mexico; Latin America

Environmental and health issues associated with common rural household energy supplies, such

as deforestation and indoor air quality, are well documented and understood throughout the world. The World Bank Group Energy Strategy noted the need to promote biogas as a clean, renewable household energy to tackle access to modern household fuels (World Bank, 2010). To this end, Sistema Biobolsa, an

anaerobic biodigester programme based in Mexico, has been working to install digesters in household farms across Mexico to displace traditional fuels with renewable and clean-burning biogas from organic wastes.

Solutions utilising renewable energies are not only “cleaner”, but they can be more cost effective. Small farmers in Central Mexico spend around US$ 30 per month on LPG, around US$ 350 per

hectare on chemical fertiliser and/or up to three hours daily collecting firewood. Fuel prices also continue to rise. Propane prices, for example, increased at more than twice the rate of Mexican inflation from 2012 to 2013 in regions Sistema Biobolsa serves, and fertiliser prices are directly linked to fossil fuel costs (Pemex, Gas LP Prices, 2012-13), (Inflation: Worldwide Inflation Data, 2013). With a Sistema Biobolsa biodigester, small farmers can save time

Sistema Biobolsa installs anaerobic digestion systems in small to medium scale farms throughout Mexico and across Latin America and the Caribbean. These systems provide a wide range of benefits for recipient households, including manure management, biogas generation and fertiliser production. The biogas generation allows families with Sistema Biobolsa biodigesters to significantly displace LPG and firewood within the home, whilst the potent bio-fertiliser residual produced by the system allows farmers to reduce their costly agrochemical fertiliser usage. This article discusses Sistema Biobolsa’s work with Kiva; a global micro-financing organisation. Through Kiva’s global platform, Sistema Biobolsa beneficiaries have been able to fund anywhere between 25% to 80% of their system, with loans funded, on average, in under 24 hours at a 0% interest rate. Since the partnership began in 2012, Sistema Biobolsa has been able to serve 81 families through Kiva loans, amounting to a total of US$ 90,375. In 2013, Sistema Biobolsa hopes to provide finance to at least 150 additional families, equivalent to over US$ 150,000 through Kiva loans.

PEER REVIEWED

and money, resulting in amortisation times of two years or less on their investment. The challenge for Sistema Biobolsa is in the first cost barrier—the potential customers’ ability to make the upfront investment in the technology.

While micro-finance is not a new tool in the delivery of household energy projects, Sistema Biobolsa has taken an innovative approach to help its beneficiaries access financing: global online crowd-funding through the organisation Kiva. This article discusses Sistema Biobolsa’s work with Kiva, and through beneficiary case studies, demonstrates how global online crowd-funding can be used to bring renewable energy solutions to rural households around the world.

What is Sistema Biobolsa?

Sistema Biobolsa is a patented, pre-fabricated biodigester designed primarily for use by small to medium scale farmers as a manure management system, converting waste into organic fertiliser and a methane rich biogas. The core concept behind Sistema Biobolsa is that “there is no waste – only resources”, (no hay desechos – solo recursos), using technology to mimic biological systems where waste from one process becomes the fuel for another. This concept, together with the economic returns and health benefits of the technology, encourages farmers to adopt Sistema Biobolsa. The constant biogas production is an appealing alternative to fuelwood and LPG for household energy.

The liquid effluent from the digestion process can be applied to crops as a potent organic fertiliser (UN FAO, 1992). In this way farmers improve sanitary conditions, reduce LPG and fuelwood consumption, lower carbon emissions and substitute their use of imported chemical fertiliser with a local organic alternative.

Sistema Biobolsa was founded in 2010 after five years of research and development and to date has installed over 600 biodigester systems across 20 Mexican states, as well as in the United States, Colombia, Nicaragua, Costa Rica, Guatemala, Honduras, Bolivia and Haiti. System size ranges from 850 litres to 200+ m3, where the largest systems have the potential to produce up to 50 m3 of biogas per day. Systems over 20 m3 produce enough biogas to be fitted with biogas motors to produce mechanical energy or electricity, but most system owners utilise biogas to serve household needs such as cooking and water heating. Excess biogas can be used in the agricultural value chain producing dairy products, pasteurising milk, preparing meat and produce, cleaning equipment and providing space heating for animal nurseries.

Aside from the innovative biodigester technology, Sistema Biobolsa specialises in user and stakeholder capacity building and education, and in large-scale biodigester programme design for government and private foundations. Sistema Biobolsa also applies its combined approach of technology, capacity building and micro-financing in its other countries of operation.

Who is Kiva?

Kiva is a non-profit organisation working to alleviate poverty by connecting people around the world through micro-lending. With as little as a US$ 25 loan, anyone can help a borrower create new opportunities for themselves and their family. Together with more than 900,000 Kiva lenders and a worldwide network of microfinance institutions, Kiva has created economic opportunity for over one million borrowers. Since its inception in 2005, Kiva lenders have funded more than US$ 400 million in loans with a 98.9% repayment rate.

With thousands of lenders worldwide who do not think like banks, Kiva is a powerful source of flexible, risk-tolerant capital. Increasingly, Kiva is directing this capital to social enterprises, NGOs and microfinance institutions that are going beyond classic microfinance to take on issues like education, clean energy, agriculture and others that are central to poverty alleviation and economic opportunity.

All Kiva loans are made possible by Kiva Field Partners, like Sistema Biobolsa, who vet, administer, and disburse each loan. Kiva seeks to partner with a range of organisational types including microfinance institutions, social businesses, schools and non-profit organisations. Many of Kiva’s partners are chosen because, in addition to lending money, they also offer services such as savings, financial literacy training and empowerment programmes. The Kiva loan process can be seen in Figure 2.

Kiva’s staff and volunteers’ work ensures that they can reach a broad range of borrowers through their local Field Partners. To achieve this, Kiva has two different levels of due diligence: full and basic due diligence. The full due diligence process involves five stages; (1) initial screening for minimum Kiva requirements regarding operations and experience; (2) a review of the partner’s operations and financial status; (3) on-site due diligence carried out by a Kiva team member; (4) preparation of a report and proposed risk rating, and; (5) submission to the Kiva investment team for field partner approval.

ThemeAuthors

Rachel SmithResearcher

Alexander Eaton CEO

Humza ArshadCustomer Service Coordinator

International Renewable Resources Institute México (IRRI México), Amatlan 37 - Piso 1, Col. La Condesa, Del. Cuauhtémoc, 06140 Ciudad de México

+52 (55) 5211 5658

[email protected]

www.irrimexico.org

Paul RickettsKiva Fellow

Kiva Microfunds, 875 Howard Street, Suite #340, San Francisco, CA, USA

Kiva P.R. (+1) (828) 479-5482

[email protected]

www.kiva.org

Figure 1: Schematic of the Sistema Biobolsa biodigester system, including feed stocks and use of outputs (Source: Buen Manejo del Campo SA de CV)

Figure 2: The Kiva loan process (Source: Kiva Micro-funds)

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Basic due diligence covers only steps (1), (2) and (5), with a maximum allowable credit line of US$ 200,000. Kiva also has an “experimental partnership” available for organisations seeking to use the Kiva platform to experiment with small lending programmes, with an initial credit line of up to US$ 20,000 available. More information about the due diligence process can be found on the Kiva website @HEDON

Global crowd funding for household biodigesters in MexicoThe Sistema Biobolsa is a strong upfront investment for a farmer in terms of financial and time savings. To make these types of clean energy products affordable, Kiva is funding low-cost loans to overcome the first cost barrier. In May 2011, Kiva began a new lending channel, ‘Kiva Green Loans’. Kiva Green Loans fund alternative energy products such as biodigesters, clean cookstoves, solar panels and appliances and biofuels. The loans are designed for individuals and SMEs that are reducing energy expenditures, minimising waste and pollution, recycling, or re-purposing used materials – all of which work toward alleviating energy poverty and improving the environment.

Sistema Biobolsa’s partnership with Kiva began in April 2012 and to date it has been able to serve 81 Mexican household farms, amounting to a total of US$ 90,375. These farms use the biogas for household

energy needs but several also use the gas in other income-generating activities, such as cheese, cajeta (a milk-based caramel), and tortilla production or preparing meat and other agricultural products. The largest Kiva-funded Sistema Biobolsa installation is 120m3, where the gas is used to provide thermal energy to a slaughterhouse.

Increasing small farm productivity is one example of how making a biodigester available through the Kiva loan has had a significant impact on the livelihoods of program participants. Before the installation of her biodigester, Doña Margarita Rubio Robles (Figure 3) could not viably produce cajeta from the milk produced on her small farm due to escalating LPG prices. Instead she would sell the milk from her dairy cattle at Mexican Pesos (MXN$) 5.20 litre (US$ 0.40). Now, utilising biogas from the digester purchased with a loan from Kiva, she uses one litre of milk to produce a 500ml jar of cajeta, which retails at MXN$ 25 (US$ 1.94) - over four and a half times the selling price of the farm’s milk, without any expenditure on gas. Doña Margarita’s MXN$ 5,340 (US$ 414) Kiva loan was funded by lenders in over five countries in five hours through the Kiva website.

Don Neópolo (Polo) Saturnino Ramírez, a livestock farmer from Tlaxcala State, Mexico is also repaying the Kiva loan he used to purchase his biodigester (Figure 4). Don Polo supports a family of five through his small family farm. Before the

installation of his 8m3 Sistema Biobolsa digester, Don Polo’s financial outgoings would include MXN$ 220 (US$ 18) every three weeks on household LPG and MXN$ 25,000 (US$ 2,030) on chemical fertiliser annually. The family also fell two trees annually for fuelwood.

Now, the family is able to use a biogas stove to cook or heat water for five to six hours a day from the biogas produced, resulting in a 50% reduction in LPG use and displacing the need for fuelwood. Don Polo plans to install a second burner for a domestic hot water heater and also use the biogas to heat a greenhouse over the colder winter months. The bio-fertiliser will be used to irrigate and fertilise fava bean crops, reducing their overall expenditure on chemical fertiliser.

Don Polo’s purchase of the digester was made possible through a MXN$ 10,392 (US$ 840) 0% interest Kiva loan and a MXN$ 12,122 (US$ 980) Mexican government subsidy, as shown in Table 2. The Kiva loan represents 43% of Don Polo’s capital investment in the digester and was funded by 29 lenders from 11 countries in less than 24 hours, having been posted online through Kiva’s website. In five months, Don Polo has repaid over 80% of his loan (MXN$ 8,660 or US$ 705) and has one more final payment of MXN$ 1,732 (US$ 141).

These are only two of many examples of how Kiva’s global lending community can transform a family’s access to energy while creating huge social and environmental benefits.

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Future lending

In 2013, Sistema Biobolsa hopes to fund at least 150 systems through Kiva loans, benefitting 900 or more rural Mexicans and involving lenders from all over the world. With 150 installations similar to Doña Margarita and Don Polo’s, this would require US$ 125,000 - 150,000 of Kiva loans, and with projections along the same scale as their households, the potential to produce over US$ 32,000 savings in LPG use and over US$ 240,000 savings in chemical fertiliser use annually, with emission reductions of up to 600 MTCO2e annually.

Kiva funds provide credit for farmers that do not have access through traditional channels, while also demonstrating the connection between Kiva’s global community of lenders and the work on the ground towards broader rural sustainability. When a rural Mexican farmer sees that people from around the world are interested in their success and advancement, they rise to the challenge, and see themselves differently. The farmers have asked: why do these people want to help us? The answer lies in the importance of the small farmer and their ability to grow good food in a dignified, healthy and profitable manner. The concept of financial help coming from so far afield flies in the face of hundreds of years of the traditional “campasino” farmer being marginalised and undervalued. Kiva’s lending platform combined with innovative, clean energy technology unifies a broad global community to support sustainable development while demonstrating to small farmers the value of their work in the bigger, global picture.

References Inflation: Worlwide Inflation Data. Historic inflation Mexico - CPI inflation (accessed 12 March 2013). Available from: http://www.inflation.eu/

Pemex LPG Prices 2012 – 2013 (accessed 12 March 2013). Available from: http://www.gas.pemex.com.mx/

UN FAO, 1992. Biogas processes for sustainable development. Chapter 12 (accessed 12 March 2013). Available from: http://www.fao.org/

World Bank, 2010. Global Consultations on the World Bank Group Energy Strategy - Summary of Inputs Received during Phase I (accessed 12 March 2013). Available from: http://siteresources.worldbank.org/

World Bank, 2011. Energy – The Facts (accessed 12 March 2013). Available from: http://web.worldbank.org/

World Watch Institute, 2012. Energy Poverty Remains a Global Challenge for the Future (accessed 12 March 2013). Available from: http://www.worldwatch.org/

Figure 3: Doña Margarita Rubio Robles (Teoloyucan, Estado de México) with her biogas stove that she uses to produce cajeta, a milk-based caramel. Her Sistema Biobolsa biodigester was funded through a Kiva loan by 38 international on-line crowd lenders in five hours. (Source: Buen Manejo del Campo SA de CV)

Table 1: Details of a Kiva-backed biodigester in Estado de México, Mexico. (Source: Buen Manejo del Campos SA de CV)

Figure 4: Don Neópolo Saturnino Ramírez and his family; three generations of Mexican farmers enjoying the benefits of biogas and bio-fertiliser from their household biodigester which they purchased through a Kiva loan funded in under 24 hours by 29 international on-line crowd lenders in 11 countries (Source: Buen Manejo del Campo SA de CV)

Table 2: Pay-pack periods and loan repayments for a Kiva-backed 8m3 biodigester in Yauhquemecan, Tlaxcala state, Mexico (Source: Buen Manejo del Campos SA de CV)

Location: Teoloyucan, Estado de México, Mexico

Digester size: 6m3 Sistema Biobolsa digester

Capital cost: MXN$ 12,420 (US$ 1,030)

Kiva loan: MXN$ 5,340 (US$ 445), 0% interest, over 7 months

Kiva crowd-funding: Funded by 38 lenders from at least 5 different countries in 5 hours 12 minutes.

Gas use: Cajeta production, household cooking and water heating

FARM INFORMATION

Livestock: 40 pigs, 7 cattle. Crops: 8 ha maize, 6 ha wheat.

Daily livestock manure treatment: 50kg

Capital

Total investment (8m3 Sistema Biobolsa digester) MXN$ 24,244

Government subsidy (SEFOA – Estado de Tlaxcala); 50% MXN$ 12,122

Kiva loan; 43% MXN$ 10,392

Down payment; 7% MXN$ 1,730

Savings

Monthly projected bio-fertiliser production from digestate 4500L

Annual outgoings on chemical fertiliser MXN$ 25,000

Projected annual savings from bio-fertiliser (at 80% displacement)

MXN$ 20,000

Daily projected biogas production as LPG equivalent MXN $9.60

Monthly LPG consumption pre-digester MXN$ 220

Projected monthly savings from 100% LPG displacement by biogas

MXN$ 220

Payback

Total investment MXN$ 24,244

Projected monthly savings (biogas & fertiliser) MXN$ 1,887

Projected lifetime savings (over conservative 10 year lifetime)

MXN$ 226,400

Projected pay-back period of total investment (MXN$ 24,244) purely on fuel & fertiliser savings

11 months

Pay-back plan with Kiva (MXN$ 10,392) at 0% interest MXN$ 1,732/month

Pay-back period with Kiva 6 Months

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Solar electrification

The Sundarbans in West Bengal, India, is a fragile ecosystem that is rich in biodiversity and consists

of 104 islands crisscrossed by wide tidal rivers and creeks. The topography makes reaching the national electric grid an expensive and challenging proposition. Where the grid does exist, the quality of power delivered is poor and sporadic. Over 60% of the power delivered to the grid is though coal based power plants. Grid penetration here is 40% and is increasing at approximately 5% per year.

Mlinda is working on a rural solar electrification project in the remote

off-electric grid Brojoballavpur Island, a world heritage site. Existing solar alternatives have not proven adequate in the Sundarbans. The lack of ownership in respect of the few standalone local grids installed has led to pilferage and revenue collection problems, leading to the systems falling into disrepair and neglect (Chowdhury, 2013). Additionally, solar power enterprises and national solar subsidies in the Sundarbans offering roof-top standalone systems are unable to meet the demands of the bottom 50% of the less privileged income groups in the community. Mlinda is therefore researching community-owned local

alternatives that can scale and provide reliable and affordable solar power for the community.

Mlinda has begun to pilot projects in schools and houses with a unique financial instrument in partnership with the National Bank for Agriculture and Rural Development (NABARD). The pilot scheme involves validating lending to a Joint Liability Group (JLG), which allows groups of users to own the solar installations they use (NABARD, 2013). The scheme was previously only applied to groups of farmers (NABARD mCID, 2006). Mlinda is expanding this model to the rural markets, clusters of homes and off market commercial spaces.

JLGs are informal groups of between four and ten members who access collateral-free bank loans against mutual guarantee. In the context of the school electrification, the individuals who make up the JLG - the school management committee - are both individually and collectively responsible for making repayments of a three-year bank loan. The service provided to the schools includes 50 - 100 LED study lamps and a 500 watt solar panel which also allows for two days autonomy (Mlinda Project Report, 2012). This means the system has a 100% battery storage back up to cater for cloudy days.

NABARD has debt-financed pilot installations in three schools to replace kerosene lamps used by 200 children from disadvantaged communities who stay in the school hostels (Mlinda Project Report, 2012). The solar based electrification in dormitories, shown in Figure 1, provides the children with reduced health hazards from kerosene use and protection from fire accidents.

NABARD has awarded Mlinda a small grant for awareness creation of renewable energy. Mlinda also works closely with West Bengal Renewable Energy Development Agency (WBREDA) in assisting communities access national solar subsidies. The schools have nominated student and staff members for training at the Arka-IGNOU Community College in Kolkata in the basics of solar technology and system maintenance.

The project could be replicated across the 100 such school dormitories or hostels in the Sundarbans and across rural institutions such as health clinics and community centres in local areas which are off-grid or with poor quality power supply. Apart from the direct benefits the solar study lights have, the direct access to debt financing by the bank to the JLG aids the financial sustainability of the project. Mlinda is also planning to pilot household cluster based micro grids in the same area based on a similar approach for providing access to clean energy lighting to families. The scheme will be affordable to families having an income of less than one Euro a day since the repayments amount to less than two Euros per month.

House cluster electrification

Mlinda has installed four experimen-tal household micro-clusters in Brojob-allavpur. Each solar micro-cluster consists of seven to ten rural households formed into a JLG. Each household is provided with three LED light points and one mo-bile phone charging point. The initial capital for procurement of equipment and subsequent installation has been routed through the local rural bank as debt to the user JLG. Hence there is no upfront payment by the users. The JLG financial instrument helps the group to access bank credit against mutual guarantee, free of any collateral. The JLG members are both individually and collectively responsible for repayment of the loan to the bank. Since this element of group accountability as part of mutual guarantee is inherent in the JLG model, the risk of non-payment and default is greatly reduced.

Through community interviews, it was ascertained that the less privileged homes would not be able to pay more than two euros per month, which is their current spend on kerosene (Mlinda Community Conversations, 2012). They plan to repay the bank from their actual savings from kerosene in flexible instalments over a period of four years. Apart from loan repayment, the JLG members would be encouraged to save 65 Eurocents per month. This will be towards meeting the battery replacement cost after three years, regular maintenance costs and a small saving. Hence, this model of clean energy access for lighting becomes affordable for them.

The added value that Mlinda provides is to bring ‘bottom of the pyramid’ (BoP) families within the fold of institutional banking. This opens up a new portfolio of opportunities for them as they now have greater access to diverse rural developmental schemes routed through the local banks. Mlinda plans to upgrade this system to an energy model that meets the community’s aspirations for more renewable energy based power, by creating a local surplus productive power pool and by integrating the micro-grids into a village grid.

Figure 2: Home mini-grid financed through the National Bank for Rural Development (NABARD) (Source: Vijay Bhaskar)

Figure 3: Home light (Source: Vijay Bhaskar)

Electric vehicles project

The energy sector is the largest contributor to GHG emissions in India, being responsible for 1100 million tons of CO2

equivalent in 2007, with transportation alone contributing 12.9% of GHG emissions (INNCA Indian Network for Climate Change Assessment, 2010). In the remote island of Sundarbans, diesel van rickshaws form the main mode of public transport. There are 3761 registered van rickshaws in operation in the eight blocks of Sundarbans that adjoin Brojoballavpur. These rickshaws are primarily designed to carry cargo but they are also used to carry passengers. They are an uncomfortable mode of transportation, especially for elderly sari-clad women, and run on an adulterated diesel mixed with kerosene, naphtha, used engine oil that is highly polluting and causes high GHG emissions (WWF India Network, 2011).

Mlinda plans to introduce solar powered Electric Vehicles (EVs) as a mode of public transport in the Sundarbans in a financially sustainable manner. The main aim of the project is to demonstrate successfully the viability of a public transport system based on solar power and thereby reduce the dependency on fossil fuel.

The first project phase involved testing the technical feasibility of two EVs. The main objective of this phase was to assess the suitability of the newly introduced EV in terms of design as a passenger and cargo vehicle.

The technical trials were held for two months from May 2012. Two diesel van operators selected by the concerned route union were trained to drive the EV. A solar charging facility of 3.22K Watts was constructed for powering the two vehicles.

Creating ecosystems of change by inspiring custodianship for the environmentKeywords: Renewable energy; Solar based micro-grid; Bottom of pyramid; Environmental stewardship; Electric vehicles; Small island

Mlinda’s electrification model is anchored in a partnership with the National Bank for Agriculture and Rural Development (NABARD) to develop a financial tool for ‘bottom of the pyramid’ (BoP) communities to obtain low interest loans to buy a shared solar mini-grid. It aims to reduce greenhouse gas emissions by 21,628 tonnes over five years. Clean and reliable solar energy will be available to 147,000 households, 70 school hostels and 2500 small market businesses. The accruing financial savings will result in increased incomes, bringing health and education benefits. Mlinda is also looking to establish a solar powered infrastructure to support 3000 diesel powered rickshaw owners to convert their vehicles to electric ones.

PEER REVIEWED

Authors

Vijay BhaskarCountry Director – India, Mlinda Foundation

+91 33 4066 3017 +91 9831023042

[email protected]

Sudeshna MukherjeeDeputy Country Director - India, Mlinda Foundation

506/1, Lake Gardens, Kolkata – 700045, India

+91 33 4066 3016 +91 9433106169

[email protected]

www.mlinda.org

Figure 1: Electrified school dormitory in Brojoballavpur, Sunderbans (Source: Vijay Bhaskar)

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Introduction

International responses to climate change are creating new sources of finance for household energy projects.

Notwithstanding on-going discussions on the adequacy of the amounts pledged by developed countries, these new sources reinforce the imperative to ensure adequate disbursement structures. Indeed,

more funding does not equate to better results. If not channelled adequately, development assistance can undermine local institutions and fuel corruption with little impact on reducing poverty (Barder & Birdsall, 2006).

To this end, the experiences of the carbon market, as an output-based developmental financial instrument, provide valuable insights.

This article analyses the potential and limits of carbon finance to support the scale up of household energy interventions. Using two case studies, the article demonstrates how barriers to accessing carbon finance can be overcome by pooling expertise and resources through a regional incubation facility: Nexus-Carbon for Development.

Household energy projects supporting vulnerable populations in developing countries are mostly reliant on development assistance. International responses to climate change are creating potential new sources of finance for energy poverty projects. However, if not spent effectively, finance can undermine local institutions and fuel corruption. Development assistance encompasses a range of financial instruments and funding arrangements that deliver resources, technologies, and technical assistance to developing countries. Where technologies and dissemination strategies are mature, innovative incentive structures can increase efficiency of aid. For example, carbon finance can bring long-term and rewarding outputs. However, owing to certain barriers, it is not widely used by development organisations. This article explores how a regional incubation facility can help development practitioners overcome these barriers through the pooling of a range of technical and financial services. In particular, the article demonstrates the added value of one such incubator: Nexus-Carbon for Development, through two case studies of organisations that recently accessed carbon finance.

Authors Samuel Bryan Technical Director, [email protected]

Marion VerlesExecutive Director, [email protected]

Marion Santini Communications Manager, [email protected]

Nexus-Carbon for Development, #33E3 Sothearos Blvd, Phnom Penh,Cambodia www.nexus-c4d.org

Figure 1: Biogas dome workers (Source: Nexus)

Scaling up household energy projects through climate and carbon finance: The potential of regional incubation facilitiesKeywords: Carbon finance; Output-based finance; Project incubator; Finance

There has been a huge community ‘buy-in’ for the two vehicles. Community surveys have been organised with the local stakeholders to gain feedback on the EV and the solar charging facility.

In the second phase, 50 EVs will be introduced on Brojoballavpur Island from December 2013. The main objective will be to validate the results of the technical trial and demonstrate and validate a financially sustainable alternative to the fossil fuel based transportation system.

The scale up phase will aim at the replacement of 3000 diesel van rickshaws across the Sundarbans for a renewable energy based, financially sustainable public transportation model. The idea is to debt-finance the EVs, which will be repaid by the operators over a period of five to six years. The initial funding gap will be met through government subsidies that will be tapered off over the project timeline.

Environmental custodianship

Creating “ecosystems of change” is achieved by not only promoting use of non-polluting products and enabling access to clean energy, but also by engaging with local communities to understand affordability, address concerns and co-create relevant solutions that are financially sustainable, community-owned, replicable and scalable. The project platform is used to invoke a sense of environmental custodianship, by engaging with the rural communities to create new values through direct benefits accruing for them. This co-creation of new values through their active participation provides a suitable platform to work with them to catalyse a change of mind-set towards greater accountability for the environment and facilitate behavioural change to addressing harmful ways of consumption and production. This is the ultimate objective for Mlinda. We are looking to devise ways to generate models of environmental custodianship based on institutions, homes and markets, which become an inseparable part of the business models and are community nurtured, sustained and replicable globally.

References

Bhaskar, V., Mukherjee, S., 2011. The Mlinda Project Report

Bhaskar, V., Mukherjee, S., 2012. The Mlinda Project Report.

Chowdhury, D. G. (12th March 2013). West Bengal Renewable Energy Development Agency Govt. (V. Bhaskar, Interviewer)

Community Conversations, 2012, Mlinda Conversations with the community, Mlinda Foundation (Sudeshna Mukherjee, Interviewer)

INNCA Indian Network for Climate Change Assessment, M. o. (2010). Climate Change Assessments in India, in: India: Greenhouse Gas Emissions 2007. Chapter 2.

NABARD Micro credit innovations department (mCID), 2006, Guidelines for financing joint liability groups of tenant farmers (accessed 15 July 2013). Available from: http://www.amfiwb.org/

NABARD. Micro Finance. Von National Bank for Agriculture and Development (accessed July 2013). Available from: www.nabard.org

Simpson, A., Willis, R., Shrubsole, G., Conversations with Environmental Funders Network Meeting, (2013). (Mlinda Foundation, Interviewer).

WWF India Network (2011), Challenges faced in the fossil fuel based public transportation ecosystem in the Indian Sunderbans, in: WWF Diesel Van Rickshaw Survey Report. Section III.

Profile of Authors Colonel Vijay Bhaskar was commissioned in the Indian Army Corps of Engineers and is an MBA graduate from the Indian School of Business, Hyderabad. He was also CEO of Coramandel Energy, where he executed Build–own–operate–transfer and Engineering, procurement and construction projects in the Power sector, including hydroelectric, wind, solar, thermal and gas based power plants, transmission and rural electrification projects.

Sudeshna holds a Masters degree in Sociology from Presidency College, Kolkata University. She has worked in international humanitarian organisations such as CARE, CRS, Christian Aid and Access Development Services on social inclusion, human rights and solidarity building issues. Sudeshna has also worked with local communities and civil society actors to ensure sustainable access to entitlements related to heath, education, livelihoods and land rights and with government, urban communities and municipal bodies on issues related to integrated urban development, urban planning and urban governance systems.

Figure 4: Diesel rickshaw with passengers (Source: Vijay Bhaskar)

Figure 5: Electric vehicles charging station (Source: Vijay Bhaskar)

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Carbon finance and household energy projects: a potential game changer

The Clean Development Mechanism (CDM) is one of the flexibility mechanisms defined in the Kyoto Protocol whereby emissions reduction projects in developing countries generate Certified Emission Reduction (CERs) which may be traded in emissions trading schemes. A parallel voluntary market also evolved where the concept of carbon neutrality allowed individuals and organisations to voluntarily offset their emissions. Collectively, the mandatory and voluntary offset market can be described as carbon finance. As prices are determined by demand for emission reductions credits, carbon finance combines the characteristics of a performance-based mechanism with those of a market mechanism.

This approach has several development advantages over alternative financial instruments. a. Rewarding outputs: Payment is based

on the results achieved. It rewards performance, thereby fostering the scale up of successful initiatives.

b. Third party monitoring: Projects undergo an initial validation and secure issuance of carbon credits through on-going verifications conducted by accredited third parties (see Figure 2). Monitoring, Reporting and Verification (MRV) ensures sustained delivery of the outputs.

c. Long-term financing: The project lifetime is between seven years, with the option of renewing twice, and 10 years (fixed) giving project developers the opportunity to plan long-term interventions.

These design principles coupled with the size of the carbon market, worth US$ 3.6 billion at the end of 2011, illustrate their potential impact in the scale up of household energy projects (World Bank, 2012).

Carbon finance and household energy projects: Difficulties in getting the incentive right, establishing methodologies and addressing complex monitoring requirements

Although there is a niche in the market for projects with development co-benefits (for example the Gold Standard Foundation and Social Carbon), carbon finance and in particular the CDM, have been criticised for failure to deliver development co-benefits (Crowe, 2011; Haya, 2007; Bumpus and Cole, 2010)). Carbon finance faces the same challenges as any other output-based mechanism, namely the setting of appropriate incentive structures, establishing methodologies and addressing complex monitoring requirements.a. Getting the incentive right: The carbon

market rewards a single output, which is GHG emissions reduction. The cost of reducing emissions varies depending on the project type. Projects with high development benefits also have a higher cost of abatement (the cost of reducing 1 tCO2e) and financial flows gravitate towards low cost emissions reductions. Niche markets around development co-benefits arise, but exist on the margins. For example, the Gold Standard has a 13% market share of the voluntary carbon market and a much smaller share of the overall carbon market (Stanley & Yin, 2013). Operators of household energy projects have a perverse incentive to reduce costs and capture short-term gains by mass dumping or giving away technologies for free rather than building sustainable supply chains.

b. Establishing methodologies: Efforts have been made to improve the regional distribution of carbon finance to under-represented regions and countries by focusing on the reduction of transaction costs through simplified methodologies. Carbon methodologies give methods to account GHG emission reductions, define

project boundaries, give guidance to demonstrate additionality and set monitoring requirements. However, projects located in poor countries do not necessarily deliver benefits to the poorest populations in those countries (Verles & Santini, 2012). Development projects are affected by another barrier: while regulatory bodies try to limit the possibility for project developers to overestimate the emissions claimed, project developers seek to exploit potential loopholes. Methodologies thus evolve on the basis of case law, becoming more complex over time (Michaelowa, 2007). This tendency increases the expertise required to enter the market, thus locking out less sophisticated or less well-resourced development practitioners.

c. Complex monitoring requirements: Carbon finance methodologies are also complex because they have to quantify a counterfactual situation, which can never be proven ex-post (Michalowa, 2007). For household projects, this is compounded by the need to accurately monitor technologies dispersed over large geographic areas, resulting in higher transaction costs. These costs are a major barrier for risk adverse or cash strapped players such as non-profits and other development practitioners. The complexity of the process discourages the adoption of benchmarks measuring development benefits, which would create additional complexity and increase transactions costs even more.

As a result, opportunities to scale up household energy projects and maximise development co-benefits are being missed. A potential solution is to establish regional incubation facilities providing technical and financial support. The UNFCCC has established regional collaboration centres in Togo and Kampala and another approach has been developed by Nexus-Carbon for Development.

Unlocking carbon finance for household energy projects: Regional incubator facilities The role of an incubation facility is to nurture high-potential projects by rewarding development impacts; pooling expertise, risks and finances; and by advocating for simplified and appropriate methodologies. a. Getting the incentive right – rewarding

development benefits: The incubator’s role is to prioritise and promote projects which are suitable for carbon finance, scalable and able to deliver measurable development impacts.

b. Addressing costly technical requirements through the pooling of resources: Development actors are often risk adverse, cash-strapped without access to capital and often lack the technical expertise needed to navigate complex methodologies and handle third parties. Regional incubators allow the pooling of technical and financial expertise.

i. Technical assistance is required to fill the human capital requirements of the complex carbon project cycle. Not only to provide the expertise to complete the carbon project cycle and negotiate sales of credits (see box 2) but also to improve project designs, while building long-term capacity of development actors.

ii. Tailored financial solutions are needed to scale up household energy projects and unlock the carbon finance potential. Carbon finance upfront transaction costs deteriorate the short-term financial situation of household energy projects, which often require a few years to break even on their carbon investment. For early stage projects where the potential for scale is still unclear, grant finance is required to assess both the carbon finance and the

scale-up potential. For mature projects with identified target markets and track record of technology dissemination, impact finance can be raised to cover carbon finance transaction costs and the financing requirements of the project activity. The incubator can provide grants and small loans to initiate carbon finance activities before raising larger scale impact investment once the project potential is established.

c. Simplifying methodologies through collaborative research and advocacy activities: A final role of the incubator facility is to provide research and advocacy positions to shape the design of the market, which evolves through precedent and case law.

The establishment of one such incubator facility, Nexus, can be used to illustrate the added value of the approach.

Case Studies

The creation of Nexus

Nexus has its roots in the Asian Regional Cooking Stoves Program (ARECOP) and the work of Group for the Environment, Renewable Energy and Solidarity (GERES). Nexus is a non-profit cooperative of development organisations that support vulnerable communities by scaling up successful climate-friendly projects. Services provided to members include technical assistance and capacity building, financial support and carbon asset management. The concept of Nexus was first developed in 2008 and seed funding was provided by the French Global Environment Facility (FFEM) in 2010. Nexus currently consists of 18 members in more than 11 countries. The projects below illustrate how Nexus has facilitated access to carbon finance for development projects.

Case study 1: Biogas Programme for the Animal Husbandry Sector of Vietnam

The ‘Biogas Programme for Animal Husbandry Sector of Vietnam’ was launched in 2003 by SNV Netherlands Development Organisation in cooperation with the Ministry of Agriculture and Rural Development of Vietnam, financed by the Netherlands government. The Biogas Project Division is the implementer of the program, with advisory support from SNV.

Converting animal waste to energy via biogas digesters produces clean and affordable energy for cooking, lighting and other purposes, reducing the health and environmental problems associated with animal waste and the use of wood fuel for cooking. The programme’s aim is to develop a commercially viable domestic biogas sector that improves the livelihoods of rural farmers. Through development of a domestic biogas sector in Vietnam; including the training and support of over 1,000 (micro) enterprises, biogas digesters are constructed countrywide. Local skills and material are used to build the units, creating long-term employment opportunities in rural areas, while quality control processes ensure long-term maintenance of the digesters. Thanks to the establishment of biogas enterprises and the commercialised dissemination of the digesters, the programme aims for the installation of 180,000 biogas plants by 2018.

Carbon finance was, from its initial start in 2003, considered as a necessary step towards the long-term financial sustainability of the program. The project did not manage to reach registration and issuance until now. Nexus, after a few months selection procedure, began working with the programme in August 2011. The project was registered in November 2012 and secured issuance in February 2013. Revenue from the sales of credits is used to

Box 1: Integrating development indicators in

methodologies The High-Level Panel on the CDM Policy Dialogue (2012) emphasised the need to integrate development indicators in monitoring requirements.

We believe that methodologies should integrate development best practices to ensure the delivery of co-benefits and a qualitative assessment of greenhouse gas emissions reductions. Three key advantages are anticipated: tackle the perverse incentive to mass dump technologies rather than design appropriate sectorial interventions; help capitalise on years of development experience; and drive finance towards development interventions.

Box 2: Marketing carbon creditsDevelopment practitioners tend to be isolated and scattered; they have limited access to buyers and rely on intermediaries to monetise their credits. This reliance on intermediaries creates an information gap as sellers have little information on the identity of end-buyers and their willingness to pay (Theisen 2012). They are not able to make informed decisions and can be “pushed” into signing poor deals. The lack of a price signal for charismatic credits and the absence of a platform for development practitioners to share information on market trends makes it difficult to forecast carbon revenues (Theisen 2012), secure impact investments and maximise their share of carbon revenues (intermediary capture is high).

The role of an incubation platform is twofold. First, it gathers market information on prices and demand, shares this information with development practitioners and allows them to make informed decisions on proposed transactions. It plays the role of a trusted intermediary tackling the issue of asymmetry of information in the market. Second, by pooling credits from various development projects, it creates sufficient scale to justify investment in marketing and sales activities, reduce dependency on intermediaries and increase the share of carbon revenues going back to development programs. The ‘Nexus-beyond offsetting’ program is the only example to date of a direct sales platform between a cooperative of development practitioners and companies seeking to source high-quality carbon credits directly from development projects.

Figure 2: Nexus services to members (Source: Nexus corporate presentation)

Figure 3: Cooking with biogas (Source: Nexus)

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support the consolidation and expansion of the program. The project is the largest biogas project registered under the Voluntary Gold Standard, demonstrating best practice in developing a sectorial intervention and illustrating how carbon finance can be used to support it.

By the time Nexus was involved, the project was already recognised as an example of best practice in the sector, having received the Energy Globe Award (2006), the Ashden award (2010) and the World Energy Award (2012). The programme did not require a feasibility study as the project concept was an established success and the large-scale of the initiative ensured transaction costs could be covered. Nexus provided financial assistance, using its revolving fund, which covers the financial gap faced by project developers to meet the carbon transaction costs. Sales from the first year’s credits will be used to pay back the revolving fund which can then be deployed to support other Nexus members’ projects. Technical assistance was also brought to complete project documentation, progress through the carbon cycle and monetise carbon assets. Figure 4 illustrates the services required from Nexus to secure carbon finance for the project.

Case study 2: Hydrologic Social Enterprise

An estimated 66% of Cambodians do not have access to improved drinking water sources (UNICEF, 2007). In 2001, the Integrated Development Environment (iDE), an international non-profit development organisation, introduced an affordable ceramic water filter technology in Cambodia to provide safe drinking water for low-income households. The water filters treat contaminated drinking water and reduce the demand for conventional water treatment through boiling water. The filters can be manufactured using locally available materials and skills which are simple, low-cost and easy to use. From 2002 through 2009, iDE managed the water filter program on a partial cost recovery basis with revenue from filter sales covering the cost of production and

distribution and donor funds covering demand-creation and overhead costs. In 2009, iDE spun off the filter program as Hydrologic Social Enterprise (Hydrologic) with a goal to reach a million Cambodian households with clean water, sanitation, and hygiene products by 2020. It became clear that reaching this goal while maintaining a pro-poor focus would not be financially sustainable unless Hydrologic could access revenue sources beyond traditional sales margins.

Hydrologic first approached Nexus in February 2010 to assess the feasibility of accessing carbon finance. The feasibility study was completed in July 2010, assessing the project’s eligibility, potential emissions reductions and financial feasibility. It reported that forecast production of filters would generate sufficient revenue to cover the carbon finance transaction costs as well as a share of marketing and distribution costs. Nexus provided technical assistance to the project from validation to issuance, successfully securing sales at premium prices directly to an end-buyer. The project was registered in October 2012 and had credits issued in December 2012. Nexus was able to sell forward credits for the project to an end buyer at a significant premium price. The sales were sufficient to reimburse Nexus costs as well as ensuring the financial viability of Hydrologic for at least the next two years.

Hydrologic possessed experience in conducting field surveys and, as one of the first water filter projects to be financed through carbon finance, these skills were utilised to pioneer the studies needed to secure carbon finance. The knowledge base has been transferred to other water filter programs within the Nexus membership. The project also illustrates the benefits of the MRV approach which goes beyond the carbon element and provides useful input in terms of the project’s compliance with health and safety international standards.

Conclusion

Many technological solutions to alleviate poverty already exist. More importantly, these solutions are relatively low-tech and can be manufactured using local

skills and materials. Dissemination strategies have also matured, focusing on creating sustainable markets for products. Performance-based funding streams combined with impact investments can support the scale-up phases. To date, carbon finance is the widest spread performance-based funding mechanism. This potential is limited by a number of barriers. This article used two case studies to demonstrate how a regional incubation facility such as Nexus could overcome these barriers. A priority is now to couple mitigation and development outcomes through developing cost-effective approaches to monitor and benchmark co-benefits.

References UNDP, 2012. Teams to End Poverty (accessed 13 February 2013). Available from: http://www.teamstoendpoverty.org/

UNFCCC, 2012. Decision -/CP.15 (accessed 10 February 2013). Available from: http://unfccc.int/

World Bank, 2008. World Bank Development Indicators, in Global Issues (accessed 12 February 2013). Available from: http://www.globalissues.org/

Acknowledgements We would like to thank the following persons for their input: Michael Roberts (iDE/Hydrologic Social Enterprise), Nguyen Thi Minh Nguyet (Biogas Program for the Animal Husbandry Sector of Vietnam) and Dagmar Zwebe (SNV).

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Figure 4: Services required from Nexus by the Biogas Program (Source: Nexus internal document)

Figure 5: Service required from Nexus by Hydrologic project (Source: Nexus internal document)

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CapacityBuilding

Tell us a little bit about yourself and how you got involved with Proyecto Mirador.

About 12-13 years ago, my family and I met with a group of doctors from Johns Hopkins in Baltimore, who were going to do some work in Honduras. There had just been a terrible hurricane in Honduras, which wiped out most of the infrastructure. My daughter and I went there as translators for the group of doctors. While translating for a doctor in a hilltop village called Atima, which is in a coffee growing region of Northwest Honduras, I would commonly notice that along the wall of the classroom, there were all these kids sucking on nebulizers (inhalers). Now, I am not a doctor but I would say ‘Why have all these kids got lung problems?’ I didn’t know what was causing it, one thing I knew was that no one was smoking; they were too poor to smoke at that time.

One day, one of my daughter’s friends took her back to one of the homes and she wandered back to the clinic afterwards and she said, ‘Dad, I understand why they are all sucking on nebulizers, I’ve got to show you this thing.’ We walked into the home and the ceiling was black from all the smoke; I mean it hurt your eyes to be in the home. The cause of it was the cookstove. It was circular and made from adobe clay with a big, wide mouth. Some of them had chimneys and some didn’t; some of them had chimneys that ended below the eve of the building so the smoke circulated back in. It was pretty clear that

it was really damaging the kids and also the women.

We heard about a cookstove that was being made by the organisation, ‘Trees, Water and People’ in Honduras and the following year we went back there and bought 27 of these cookstoves that are called ‘La Justa’ cookstoves. It was very easy to see that this thing was a fantastic solution to the indoor air problem. Also, as an economist, I saw that these family members were getting a huge increase in their income through wood savings and time spent collecting the wood.

We thought this was a terrific solution. I went to a trusted Honduran friend, Doña Emilia Mendoza, who had helped to coordinate the doctors’ visit previously, and asked her to help manage the building of cookstoves in these communities. I had known Emilia for three to four years and she has proven herself to be one of the most accomplished people I have ever met. So we started building cookstoves in homes in Atima. Initially there were about 500 homes in Atima but over the next two to three years, we built 2000 homes in that community. We learned a lot about the cookstove business. We started out building a cookstove in a home, doing a bit of training and just leaving it with them.

We came back a year later and realised however that this just wasn’t working. These cookstoves are really strong but you have to maintain them, and if you don’t, they’ll eventually stop functioning and

you then have high abandonment rates, which are commonly seen across many cookstove projects all over the world. So after building cookstoves for two or three years, we realised that we needed to abandon this ‘build and drop’ method. We altered the business from a construction business to an education business. Then it became an issue of ‘how do we grow it?’

So how did you go about solving the abandonment problem?

The efficiency of the cookstove was one problem. With one of the original La Justa cookstoves, you have a firebox surrounded by wood ash and you place the Plancha (grill) on top. The way the original La Justa cookstove was designed meant that efficient cooking relied heavily on the position of the Plancha in relation to the level of the wood ash in the firebox. When the Plancha was removed for maintenance, it became difficult for the beneficiaries to replace it in the correct place. So we invented this thing called the ‘Cinco,’ and this automatically helped maintain the wood ash at the correct level. The second thing we did was initiate additional return visits to the homes, continued monitoring and re-educating. We started coming back repeatedly and so today we do no less than five periods of education with the beneficiary. The first is held at a community event, the second after we have built the cookstove, then one month later, six months later and finally one year after we have built

Interview with Richard H. Lawrence, Proyecto Mirador

Richard Lawrence, founder of Proyecto Mirador, talks to us about how he and his family set up a cookstove project in Honduras after discovering first hand some of the awful side effects of smoke inhalation. Richard explains what Proyecto Mirador has done to fund this fantastic project and what challenges they face in the future.

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the cookstove. It is this continued re-education, along with the Cinco, that solved the abandonment problem.

How does your project work with the beneficiaries? What deal do you strike with them?

We have a co-investment with the beneficiary, where we put up certain materials and they put up time and other materials, and then we follow up with education, monitoring and supervision. That co-investment means, when we walk out of the home after building it, the beneficiary understands that that is her cookstove; it is not Proyecto Mirador’s cookstove and that is really important. We are not perceived to be donating anything to anyone.

Secondly, we follow a pattern of receiving solicitations. Solicitations come in from all across Honduras and people know that when you make a solicitation to Proyecto Mirador, you have to provide a list of the potential beneficiaries, including phone numbers, I.D. numbers, and community leaders’ names. We receive these solicitations every day and they range from about 14 homes to as many as 800-900. Today these solicitations give us about a two-year backlog of people who want our cookstoves and this has come in effectively without us spending a nickel on promotion. All promotion has been done by word of mouth.

We are organised through the Programa de Ejecutores (programme of associates), which are micro-enterprises that are owned and operated by Hondurans who operate effectively in two functions: one as a construction business and the other as an education business. They

are in charge of the first two education experiences with the beneficiary. We incentivise the entrepreneurs to go out and build cookstoves that meet our specific requirements and to educate our people about those specific requirements. The Programa de Ejecutores has been very successful in allowing us to scale up our growth, so we have been growing at about 70% for the last few years.

What benefits do these cookstoves provide for the community in real terms?

There are five core benefits to the community. Number one is that you get rid of the smoke inside. In doing this, we see a reduction in days lost from employment due to bad health and a reduction in medical expenses and we also see healthy kids who are not affected by the smoke.

Number two is that we are slowing the terrible de-forestation that is going on in Honduras. The next time a hurricane comes through, the landslides will be even worse because the good trees have already been taken out of the forest. We are helping to slow that by consuming half the fuelwood that the families were using before.

The third thing is that we calculate there is a 7-8% increase in income per household when they get these cookstoves, which is significant, due to reduced fuelwood savings and from freed up time where they can do other work. We have done a lot of surveys on what they do with their free time and most of them either work or improve the lives of their households one way or the other.

Then of course we are contributing to reduced emissions, not only in Honduras

but generally to the global reduction of climate change.

The last co-benefit is interesting, because if you asked me what the most serious problem in Honduras is today, I’d tell you it is violence in the society. And what is the cause of that violence? Well, it is partly caused by the drug business that is going through Honduras but part of it is the high rate of unemployment. People aren’t investing in Honduras, and this high unemployment is really leading to a lot of violence. OK, so what does Honduras need more than anything? Well, they need employment and micro-enterprise formation. So between our Programa de Ejecutores and our suppliers, we have established sixteen micro-enterprises all owned by Hondurans which are all profitable. Today we are employing 115 people through these micro-enterprises and the jobs are all paid and full-time. 75-80% of the jobs are based on incentive compensation schemes that we’ve put in place, so that the more they produce quality cookstoves that meet our requirements, the more they are going to earn. Very few companies in Honduras have used incentive compensation schemes successfully in my view. So we’ve got micro-enterprises and full time jobs well in excess of the minimum wage at rural level.

How has your project been supported financially? How has it been able to develop these products and services initially?

The way it works is that we build the cookstove today and then we can either sell it or get co-investment for it. We opt for a co-investment of time and locally

available materials on the part of the beneficiary, and then the rest is funded in our case through carbon credits. The carbon credits come in over the five-year life of the cookstove. So you’re out of money today and get money over five years, and that hole needs to be financed.

The way we’ve done it is that we’ve had two private foundations that have contributed what we call ‘donated equity’. Since we operate as non-profit, these foundations aren’t looking for a return on investment in a strict monetary sense. We have been very fortunate to have that level of support plus support from family and friends and a few other foundations. The principal support has come through a group called the Grantham Foundation for the Protection of the Environment as well as the Overlook International Foundation.

We realised early on that if you are going to solve the problems of indoor air pollution, deforestation or slow micro-enterprise development, you need capital. Although we operate as a non-profit, we run our operation as a business such that each cookstove has a positive Internal Rate of Return (IRR). This is not a business that you can run on US$ 50,000 and so you need real capital. Without it, too many projects then tend to have to cut corners on certain things and we’ve been fortunate. We have capital committed to fund our projects through 2014 and there are three sources of the money: the two foundations on the one hand, and the third is the sale of Gold Standard carbon credits. For 2013, if we did not grow, if we just held our construction at 18,000 cookstoves per year, the proceeds from the carbon credits would fund our

business. Since we are growing, we need additional capital and that is where the Grantham Foundation and the Overlook International Foundation have been very generous in their support.

What are your views on Carbon Financing and what can be done to make it successful particularly with the decline in the CDM market? Have you ever considered other types of funding?

Well, first, we were lucky. When we decided to pursue carbon finance, the CDM did not have a methodology for cookstoves. That pushed us towards The Gold Standard which is a voluntary market right at the top of the pyramid in terms of credibility, toughness, transparency, monitoring, and verification: all those critical things. The Gold Standard is really tough.

For years when we were trying to get registered with The Gold Standard, it was a real challenge but over time carbon finance changes your incentives from just producing cookstoves to building a really good cookstove that is going to really be durable and supported by a system of training and verification that will reduce abandonment rates. That was really important and we are a far better project today because of The Gold Standard certification process and I think we were the fourth cookstoves project globally to get The Gold Standard certification.

So there are a couple of key things needed to make carbon finance work. Firstly there’s capital. If you don’t have capital: you can’t invest in getting the abandonment rate down; you can’t invest in making the cookstove more durable; you can’t invest in some of the monitoring

and verification information that you need; and you don’t have the resources to do a kitchen performance assessment every year.

Secondly, you need a range of expertise and this is certainly true from our perspective. We have a combination of people up here in California who have the technical expertise to handle the documentation and all the numerical equations. We are supported by Professor Bailis from the Yale School of Forestry. We also have Doña Emilia Mendoza and Professor Elder Mendoza (no relation) on the ground in Honduras. At times in this process, you suddenly need more survey results or you need to do another kitchen performance test and we can just call up Doña Emilia Mendoza or Professor Elder Mendoza and within a week we can get some real hard data. That combination of on-the-ground ability mixed with the international expertise in California has proved hugely successful.

As the world works, a lot of people have been very unfortunate in that they pursued CDM markets and with the collapse of the CDM market, that investment for them is very tenuous. That is just unfortunate and we’ve been lucky in that The Gold Standard has held up. The prices have come down but for premium projects, I think there is still plenty of demand for high quality carbon credits. I think The Gold Standard is a platform that globally people should support and enhance because it is a very useful instrument to direct capital to successful project developers like Proyecto Mirador.

We have been universally rejected by all other institutions or foundations that we approached for funding.

Figure 1 Mother and daughter with cookstove in home (Source: Charlotte Boulton)

Figure 2: Smokey pots on a traditional cookstove (Source: Charlotte Boulton)

Figure 3: A Supervisor carrying out a home visit in Honduras (Source: Charlotte Boulton)

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Everyone has turned us down except the Grantham Foundation and the Overlook International Foundation. Selling our carbon credits through a retail platform or the idea of raising money through a similar sized platform is unappealing to us. We need serious long-term capital. We are more interested in trying to raise large amounts of capital from people who understand the benefits of what we are trying to deliver.

How have you measured your successes in the production of cookstoves and dissemination of them to the community, and how have you monitored the success of the projects?

About two years ago, we realised that carbon financing was weakening and that we needed to better define ourselves for the buyers of carbon credits. At the same time, we were constantly thinking about how to meet the challenges demanded by The Gold Standard in terms of simplifying the verification process. One of the problems we were having in Honduras was that when we were going back to the villages for our third, fourth and fifth educational sessions, the villages would have grown and it was difficult for our supervisors to find the homes with our ‘Dos por Tres’ cookstove.

These factors came together and as a result, so did our demand for an IT system. We needed to move from a

paper system to an electronic system. The key components of this were the ability to collect very detailed surveys on the performance of the cookstove on an on-going basis. So during the educational visits, all supervisors go in with i-phones and they do the surveys directly, entering the information into the i-phone, which then goes up to the cloud.

Now when we build the cookstove in the home, we GPS mark the location of the home and we can provide high-resolution maps for the supervisors either online or on paper showing exactly where the cookstoves are located. This makes us much more efficient and able to provide much more transparent data. We have detailed, high quality and high-resolution maps giving us mapping capabilities and survey capabilities, to the extent that if you ask me to include a survey question we could enter that survey question from California and when the supervisors go out into the field this afternoon, they would just see another question that they had to ask.

We get over 1000 survey results per month, which are really robust data. We have almost 50,000 homes entered into the system and we have over 50,000 surveys with around 32,000 GPS points. Now all the Hondurans, from the lowest employee all the way up to the top, are running the business electronically.

Finally, how do you think HEDON can help your organisation?

One of my hobbies is reading material on cookstoves and I have read some of the reports and information that is online on HEDON. What you are doing is terrific; it has very sophisticated material and your publication, Boiling Point, is very valuable. I wish we knew about it eight or nine years ago when we first got into cookstoves. It would have saved me a lot of trouble in trying to figure out how to do this thing properly.

I am really happy that you wanted to interview me. I think that exposure helps other groups understand what it is we actually do. We have been so focused on our project in Honduras that we haven’t spoken and promoted ourselves. We have a great website but anything like this article is certainly valuable and I hope potential partners would certainly be interested in this. The biggest challenge is securing institutional support. As I said, we haven’t really gotten much institutional support beyond the Grantham and Overlook Foundations since we started. Now that we have closed the circle from A to Z, we know how to build a cookstove, get demand, do the carbon certification, sell the carbon credits and prove that we have a positive IRR on each cookstove. Now I think some larger institutions should come in and support us.

www.HEDON.info/TNXB* A graphic representation of how the VACVINA Advanced Biodigester works* Author’s latest contact details

Meet us @HEDON

Background

Nepal is an agrarian country where around 84% of households use firewood for cooking, heating

and animal feed preparation. Most rural Nepali families who use traditional solid fuels for cooking and heating also use inefficient cookstoves that emit smoke into their living spaces which have almost no ventilation and 65% of households rely on collecting firewood from forests (CBS, 2011). The dependency on firewood and the ever-increasing population are exerting continuous pressure on the forests.

This project promoting the use of improved cookstoves (ICSs) in Nepal was carried out by Winrock International

with funding from the United States based Putnam Foundation through the New Hampshire Charitable Foundation. The ICS technology promoted under this project is designed and developed by Nepal’s Alternative Energy Promotion Center (AEPC). AEPC is a government institution functional under the Ministry of Science, Technology and Environment with the objective of developing and promoting alternative energy technologies in Nepal.

The cookstoves are made of clay, rice husk, dung and a few metal rods. They have one or multiple potholes with or without chimneys. In the case of multiple pothole ICSs, a baffle is used to direct the flame and hot air to the second pot hole. The ICS consumes less firewood and

emits minimal smoke, thus dramatically reducing exposure to indoor air pollution.

Winrock expanded the project activities in collaboration with AEPC, into geographic locations that the national ICS programme would not otherwise have reached. The project was implemented in the Dhading, Sindhupalchowk, and Dailekh districts from September 2010 to December 2011.

The project activities have been carried out through four core components:• Capacity building at local level:

orientation and training • Strengthening a working alliance of

stakeholders• FacilitationofICSpromotion• Developingacarboncreditproject

Promotion of improved cookstove use in Nepal: A case study on accessing carbon revenue through a national level voluntary carbon market Keywords: Improved cook stove; Voluntary carbon market; Emission reduction

Authors Sandeep JoshiProgramme Officer [email protected]

Binod Prasad ShresthaDirector [email protected]

Dipendra BhattraiProgramme Associate [email protected]

Nira BhattaProgram Associate [email protected]

Winrock International, Nepal 1103/68 Devkota Sadak, Baneshwor P.O Box 1312, Kathmandu, Nepal

Figure 1: Woman using an improved cookstove in Nepal (Source: Winrock)

PEER REVIEWED

Winrock International facilitated the installation of 5,000 Improved Cookstoves (ICSs) in three districts of Nepal under the national cookstove programme of the government of Nepal’s Alternative Energy Promotion Center (AEPC). The project achieved the signing of the Emission Reduction Purchase Agreement (ERPA) between a local NGO, Rural Mutual Development (RMD), and Ace Development Bank, a leading development bank for voluntary in-country purchase of Verified Emission Reductions. This groundbreaking achievement, the first such initiative carried out by the financial sector, is anticipated to open up a national level voluntary carbon market in Nepal. Winrock demonstrated the investment potential of this national voluntary carbon market to multiple stakeholders contributing to the sustainable promotion of ICSs in Nepal.

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Winrock partnered with local NGOs for the field level implementation of the project. The result was an increase in use of efficient cookstoves for 5,000 households, which directly impacted more than 25,000 individuals. This project has been crucial in ICS promotion in those rural parts of the districts that the national ICS programme has not been able to reach. The project has benefitted user households by reducing the firewood consumption, cooking time and workload of women and children involved in firewood collection and cooking. It also helped reduce indoor air pollution and its associated health hazards. Further, the project has provided employment opportunities to the stove promoters by building their professional capacities and mobilised them to install ICSs and provide local services.

Project Activities

Capacity building at local level: Orien-tation and Training

Training and capacity building was one of the major activities of the project. There were two activities namely: New Promoters’ Training, which focused on developing new promoters and Refresher Training, for existing promoters to update them with the latest designs and cookstove types. New Promoters’ Training, is a seven day programme and includes the following aspects: biomass energy, types of biomass energy technologies, types of ICSs, construction, operation, repair and maintenance of ICSs, kitchen management, awareness creation, promotion of ICSs, monitoring and follow-up. During the training, the promoters are provided with hands- on skills transfer and individual participants construct each stove type and model that the project will disseminate. Refresher Training is a five-day programme, which includes topics similar to that of the New Promoters’ Training but mainly focuses on orienting and updating the promoters about new designs and ICS technologies developed by the programme.

The project conducted New Promoters’ Training and Refresher Training programmes for ICS promoters in project districts that helped them improve their existing skills and ensured quality control and better customer services. A total of 12 new promoters were trained and 93 promoters were provided with updated training. A total of 105 promoters were engaged during the project period, thereby creating employment opportunities at the local level.

District level interaction workshops were also conducted as part of orientation and awareness creation activities to intensify the promotion of ICSs. Stakeholders from different microfinance organisations, ICS promoting organisations, ICS promoters, cooperative members, and representatives from district Community Forest Users participated in the events.

The project also carried out monthly promoter update meetings as well as Village Development Committees (VDCs) level repair and a maintenance orientation programme in the districts. All the training and interaction costs were leveraged from the national ICS programme implemented by AEPC.

Stengthening Working Alliance of Stakeholders

Throughout the project, Winrock provided a platform for ICS promoters to share experiences with each other as well as a wider group of stakeholders, ranging from government organisations to local NGOs through promoter gatherings held in each district. A Memorandum of Understanding (MOU) was signed between Winrock International and local partners in respective districts to establish working relationships among organisations for project implementation.

Developing a Carbon Credit Project

This project was based on a demand driven approach where the project provided technical support to the local organisation, enabled the promoters to create awareness in promoting ICSs and install them as per the demand of the user. Each ICS costs between US$ 5 and US$

10, depending on the type/model and the households pay the total cost incurred. The price includes between US$ 1 and US$ 2 for non-local materials and also between US$ 1 and US$ 2 as labor charge.

Each ICS was estimated to reduce approximately 1.5 – 2 tonnes of carbon dioxide equivalent (tCO2e) per year and the net emission reduction from 5,000 installed ICSs was estimated to be approximately 7,500 tCO2e per year. Winrock developed a voluntary carbon project by bundling 1,935 ICSs installed in seven VDCs of Dhading. These VDCs include: Nalang, Salang, Muralibhanjyang, Dhola, Maidi, Baseri, and Chainpur. The emission reduction calculation was done by applying the UNFCCC approved methodology AMS II G, ver 03 (CRTN & Egluro, 2009). Random samples of ICSs were chosen among the 1,935 ICSs installed in the Dhading district and field tests were conducted to determine the thermal efficiency of the ICSs.

Results of the Water Boiling Test (WBT), using the internationally recognized WBT protocol, showed the efficiency of the ICSs disseminated under the project was at least 20% (by applying the most conservative value). The net emission reduction from each ICS was found to be 1.5 tCO2e per year and the total emission reduction from 1935 ICSs was calculated to be 2800 tCO2e per year (see appendices @HEDON for detailed calculations).

Winrock facilitated the signing of the Emission Reduction Purchase Agreement (ERPA) between a local NGO, Rural Mutual Development (RMD), and Ace Development Bank, a leading development bank in Nepal, for voluntary purchase of emission reductions in the country. Ace Bank agreed to purchase the emission reductions of 2800 tCO2e from the 1935 installed ICSs. Owing to the fairly small size of the project, external validation was not possible due to the high cost involved. Winrock validated the project following the UNFCCC methodology.

This initiative was a milestone in the national voluntary carbon market scenario with a private sector organisation like Ace Bank voluntarily purchasing carbon credits to support renewable energy promotion

in the country. Throughout the initiative, Ace Bank established a benchmark as a responsible financial institution contributing to climate change. This first step is anticipated to catalyse the creation of a national level voluntary carbon market for small projects within the country to promote renewable energy through carbon financing. Throughout this project, Winrock demonstrated the new investment potential of this national voluntary market to multiple stakeholders, contributing to the sustainable promotion of ICSs in Nepal. This is a step towards the ultimate goal of the project i.e. to develop a carbon credit project. Unlike other Clean Development Mechanism (CDM) or Verified Emission Reduction (VER) projects, in this project the ICS users are the project participants and a local NGO implements and coordinates project activities.

Winrock also developed a community based revenue sharing mechanism for the VER project so that beneficiary households ultimately receive a share of the revenue. The revenue sharing mechanism allocated 8% of the total revenue for operation and management of RMD, 28% for distribution to existing beneficiaries and 64% for the installation of new ICSs. As a part of the carbon revenue, the individual households of the 1935 installed ICSs received Nepalese Rupees (NRs.) 120 (US$ 1.50) per ICS. Ace Bank distributed cash cheques to beneficiary households and women representatives collected the cheques during the press conference. About 1,000 additional ICSs will be installed and each household will receive NRs. 100 (US$ 1.30) per ICS as an incentive for new installation. The carbon revenue is directly linked to ICS installation and use. This has motivated the community to use and maintain the ICSs they have installed. In addition, it has also helped to install additional ICSs in the community. The payment of the carbon revenue will be disbursed in three installments. The first installment was disbursed after signing the ERPA, the second is expected to be released after mid-term monitoring in June/July 2013 and the third is expected at the end of 2013.

The additional 1,000 installed ICSs will thereby help increase the overall carbon revenue from the project.

Currently 435 ICSs have already been installed in Muralibhanjyang VDC in Dhading, contributing to the National ICS Promotion strategy.

Conclusion

ICSs are an affordable clean technology for rural energy needs and have positive environmental, health and other socio-economic impacts at household level. The project has been successful in initiating a new platform for project developers to benefit from a national voluntary carbon market. This endeavor is the first of its kind in Nepal and the approach is different because actual beneficiaries (ICS users) are receiving revenue from emission reductions generated by their ICSs. The project will build on this achievement to accelerate such initiatives in the future with the commitment and engagement of more stakeholders which might include the public, private sectors, development agencies and individual experts to create a national level voluntary carbon market in Nepal.

Renewable energy technology carbon projects are novel in Nepal; the handful of projects currently linked with compliance and voluntary markets are all international. This first step is anticipated to be the catalyst in creating a diverse national voluntary market. Nepal is a developing country and there is no mandatory obligation for emission reductions. Presently, issues related to climate change have been emerging and various activities related to mitigate its effects and reduce greenhouse gases have been initiated. In this context, the initiation of this project has created opportunities to develop VER projects and contribute to the environment. Also enjoying benefits were the community, banks and private companies who have been involved in various corporate social responsibility activities targeted for purchasing the VERs from these types of projects.

References CBS, 2011. Nepal Living Standards Survey 2010/11. Kathmandu: National Planning Commission Secretariat

CRTN & Egluro, 2009. Efficient Fuel Wood Cooking Stoves Project in Foothills and Plains of Central Region of Nepal. Nepal: Clean Development Mechanism Project Design Document Form (CDM-SCC-PDD)

Gwénaëlle, L., Rijal, K. & Seyed,i B., 2011. Decentralized Energy Access and the Millennium Development Goals: An analysis of the development benefits of micro hydropower in rural Nepal. Rugby: Practical Action Publishing Ltd

IEA, 2011. Energy Poverty (accessed June 2013). Available from: http://www.iea.org/

Practical Action, 2012. Poor People’s Energy Outlook. Rugby: Practical Action Publishing Ltd

WECS, 2010. Energy Sector Synopsis Report 2010. Kathmandu: WECS

WHO, 2011. Indoor Air Pollution and Health (accessed June 2013). Available from http://www.who.int/

PCIA, 2012. Stove Testing (accessed June 2013). Available from http://www.pciaonline.org/testing

www.HEDON.info/VUXB* CO2 emission reduction calculations* Profile of authors

Meet us @HEDON

Figure 2: Press conference for Emission Reduction Purchase Agreement (ERPA) signing between Ace Development Bank and Rural Mutual Development (RMD) Source: Winrock)

Figure 3: Cheque being handed to RMD by Dr. Pokharel, Ace Development Bank (Source: Winrock)

Figure 4: Participants at improved cookstoves training (Source: Winrock)

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HELPLINEHELPLINE

It is a tough job to keep fundraising for projects of any sort but generally speaking, most probably the only way

to future-proof and make this project less reliant on ad-hoc funding is to see if you can move this particular scheme onto a customer financed business model. If your target community has the ability to pay for electricity and sui-gas (even is there is actually insufficient supply) I assume that they are not the poorest of the poor. Furthermore, if they currently pay for kerosene and for fertilizer there may well be an even better chance. Certainly there are schemes in India – for instance the Small Scale Sustainable Infrastruc-ture Development Fund (S3IDF) (see @HEDON) - which have a business model that has reliably produced financially viable investments that are certainly pro-poor. Their success depends in part on a well developed set of financial institutions in rural areas that are prepared to make loans to business providing “modern energy to poor people profitably”. That model works in part because they use their limited grant funding to develop small enterprises, which are then able to take equity capital from S3IDF and debt capital from the banks. If you have already obtained a lot of experience in designing, building and operating biogas plants and can source the necessary

equipment including biogas lamps, you may need very limited grant finance. At the least, try to use what grant funds you can obtain to leverage loans from the financial institutions. You may well find that wealthy individuals will be more willing to support you if you can show that their contribution can be multiplied by for formal finance.

The Dutch organisation SNV expanded its biogas programme to Vietnam, Bangladesh, Cambodia and Laos and it has published many reports, including one report that defines their success factors (see @HEDON). Their work has extended to many other countries and they claim that half a million plants have been built under SNV’s international programmes by the end of 2012. A biogas programme needs to be sustainable, operating on a market basis, at least for certain sectors of its activity. Other factors include the need to involve a wide range of stake-holders, from government officials to local entrepreneurs; the effective use of quality control and follow-up, to ensure plants continue to work well over time; and involving the private sector, especially in the work of construction.

One new income stream for biogas programmes is that of carbon offset finance. The Kyoto protocol encouraged payments for projects that reduced the use

of fossil carbon and biogas was eventually accepted as a valid technology under the Clean Development Mechanism. While agreements to extend the Kyoto protocol are still being debated, many other carbon offsets schemes using similar approaches have been developed. These schemes offer potential financial support for programmes such as those that encourage the use of biogas technology. Different programmes set up by SNV, such as those in Nepal, Vietnam and Bangladesh, have documented their approach to developing carbon offset contracts.

Expert response by Andrew Barnett and David Fulford Expert response by Magnus Wolfe Murray

HelplineSince 2001, United Social Welfare Society (USWS-PAK) has been working to sustain a renewable energy development project in Cholistan, Pakistan. With a shortage of electricity and natural gas, Pakistan is currently facing an energy crisis and USWS-PAK aims to implement biogas plants as a clean and alternative energy source.

The project focuses on bringing biogas plants to communities who will be trained up and responsible for running their own plants. Despite successes within communities, and having received funding from other NGOs, the government and wealthy individuals, USWS-PAK is struggling to find long-term, consistent funding for this project.

What steps can be taken to future-proof this worthy community project and reduce its reliance on ad-hoc funding?

AuthorsAndrew Barnett The Policy Practice 33 Southdown Avenue, Brighton BN1 6EH, UK

+44 (0)1273 330 331

[email protected]

David Fulford Kingdom Bioenergy Ltd 15 Brandon Avenue, Woodley, Reading RG5 4PU, UK

+44 (0)118 969 5039

[email protected]

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The Dutch group SNV has been working in Pakistan with a local NGO group, Rural Support

Programmes Network (RSPN) (see @HEDON), which has funding for community scale biogas plants. Most of the funding for this comes from the community itself. The organisations only put in about 10% of the money and that is mostly in the field of design and technical consultancy. It is an interesting model as it means people are less reliant on external funding and that the people who are receiving the digesters have to raise between 60,000-70,000 rupees, (US$ 600-700). Now that is a lot of money for poor farmers or rural people but it is acceptable for those who have a fair few assets like cattle and people who are already in the middle income bracket. Their aim is to extend the programme and get about 14,000 digesters installed. Now this is not going to help you in terms of funding, but the model they have for providing the information to the community and raising awareness of what the beneficiaries could save in terms of gas costs and helping to use that manure in a more effective way, seems to increase the community demand for the project. Once the demand and interest is there, then between them, the community can raise the money.

I haven’t heard of any donor or government departments funding biogas programmes for free and my feeling is that it is not sustainable at all for donors or agencies to be providing the full, 100% funding. I think that means that you will only reach a few communities, even if you have a lot of money, because you could be spending up to US$ 1000 per tank. Communities should really be encouraged to fund by themselves and agencies should help the communities understand exactly what they are spending on firewood and fertiliser, and calculate that against what they could be saving if they used biogas and the available fertiliser.

Very few donors have an active fund for renewable energy. There are some donors from Germany and America who are supporting energy projects in Pakistan, but these tend to be larger scale: micro-hydro or big wind. So I think you need

to re-think the model completely. Make it one that is creating opportunities for micro-credit, so a community can access US$ 1000 or US$ 10,000 for whatever the energy system is and pay that back over a certain number of months or years for a fee that is acceptable to them. For this to work, they really have to understand that the value of the cooking or lighting gas is equivalent to less than what they are paying now for cooking or lighting.

That is where the effort needs to go. The NGO needs to have its own sustained funding to maintain its staff, cars and running costs to get out there into interested communities and provide this technical support unit that can help them access microfinance. I think that that has to be the model of the future, if we have any chance of getting it to reach large amounts of people. Efforts should also be made to encourage the provincial governments rather than the national governments to support the technical assistants and the design consultancy that these NGOs can offer, because the national governments are not going to be funding the installation and costs of biodigesters.

As a water, sanitation and hygiene (WASH) adviser I have been trying to advocate that we can improve the end of life treatment of wastewater. Combined with animal manure or food waste, it can be used to produce a large amount of biogas and treat the sewage effluent. It is an emerging technology used a lot in India, China and other places, and it is also the system I built at my home in Portugal. This is an avenue the entire WASH sector needs to take on board because the issue of sanitation is enormous in Pakistan and we really need to deal with it. I see biogas as being a really effective way of dealing with harmful pathogens as well as creating an available source of energy for people. As a result of this, there are quite a lot of renewed funding efforts to get water and sanitation to the communities within the Pakistan government, the regional governments and donor organisations.

There has been a big focus to improve the Millennium Development Goal to

increase access to sanitation and water for all by 2015 and beyond. There are plenty of experiences like those that I mentioned in my article in issue 61 of Boiling Point from Pakistan and Bangladesh, as well as from India. In a community in any country in the world, there is a lot of food waste and in some cases, animal waste, which are the key ingredients for a very active biodigester. We should save the money from building septic tanks and focus on building useful biodigesters that can also provide energy. There are also typically more funds available in WASH than are available in energy at the moment. There is a need to change the mentality and make people realise that biodigesters can be a useful solution for sanitation as well as energy issues.

AuthorMagnus Wolfe Murray

Resilient Community Design Consultant, Department for International Development – Humanitarian Unit, Islamabad, Pakistan

+92 3468556345

[email protected]

Boiling Point. ISSUE 62 — 2014

www.HEDON.info/XUXB* S3IDF website* SNV biogas programme reports

Meet us @HEDON

www.HEDON.info/YUXB* RSPN website

Meet us @HEDON

TOOLKIT

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TOOLKIT


Module 0 — Project information and applicability

Is carbon finance applicable for my project? This introduction module of the tool helps assess if the project type and size are consistent with CDM or Gold Standard requirements. This will analyse the following scenarios: — Large scale Voluntary Gold Standard — Small scale Clean Development

Mechanism— Small scale Voluntary Gold Standard— Micro scale Clean Development

Mechanism— Micro scale Gold StandardThe module selects the appropriate methodology and evaluates the scale of the project.

Module 1 — EligibilityDoes my project comply with eligibility criteria? This will help you assess if your project is eligible for carbon finance by reviewing a set of criteria (Figure 1).

Module 2 — CER/VER potentialWhat is the emissions reduction potential of my project? Your project is expected to generate greenhouse gas emissions reductions that would not have occurred without the project. The tool will help evaluate how many carbon credits (CER

or VER) you would be able to issue under the CDM or Voluntary, e.g. Gold Standard.

Module 3 — Financial viabilityIs carbon finance a viable option for my project? The tool helps you evaluate transaction costs you will need to bear to access carbon finance (development of documentation, validation, monitoring, and verification activities), as well as revenues you can expect from the sale of the credits (Figure 2). The tool will calculate: — Undiscounted and Discounted Cash

Flows— Net Gain, Net Present Value and

Internal Rate of Return— Minimum number of diffused

appliances and CER/VER price for break-even

Module 4 — Risk analysisAre the risks associated with my project significant? What are the technologies, project management, financial and country risks associated with the project? The tool provides a preliminary risk assessment.

Module 5 — Project summary At the end of the analysis, you can get a screening summary report generated by the tool that you can print.

Glossary

Additionality: When greenhouse gas reductions generated by a carbon project are additional to those that would have occurred without the project.

Clean Development Mechanism (CDM): Established by article 12 of the Kyoto Protocol, it allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one metric ton of CO2. These CERs can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets under the Kyoto Protocol.

Certified Emission Reductions (CERs): A unit of greenhouse gas emission reductions issued from the Kyoto Protocol Clean Development Mechanism. The unit used is metric tons of carbon dioxide equivalent.

Gold Standard: Certification standard for carbon mitigation projects recognised internationally as the benchmark for quality and rigor in both the compliance and voluntary carbon markets.

Validation: Assessment of a carbon project documentation by an independent third party. Validation is required for a project to be registered.

Verification: Annual assessment of GHG emissions reductions achieved by the project by an independent third party, which is required for credits issuance.

Verified Emission Reductions (VERs): Unit of greenhouse gas emission reductions certified through a voluntary certification process outside of the Kyoto Protocol mechanisms. The unit used is metric tons of carbon dioxide equivalent.

Introduction

Development projects that focus on household renewable energy and energy efficiency are able to

access carbon finance through the Clean Development Mechanism (CDM) or the Gold Standard (compliance market and voluntary market).

Development practitioners are particularly affected by the challenges of carbon markets, given their reduced capacity for investment. Project developers face the challenge of evaluating if carbon finance is an appropriate co-funding option. This evaluation is complex and requires specialist input, as technical complexity, high initial investment costs and long lead time present a barrier for small project developers.

About the tool

The CDM decision tool was designed to help project developers assess the feasibility of small scale carbon projects for technologies such as improved cookstoves, biogas and charbriquettes. The tool is available for download on GERES’ website (see @HEDON) and is suitable for Windows Excel 2010 and Windows Excel 2007.

The following approved carbon methodologies were used:— CDM AMS II.G (Version 3) - Energy

efficiency measures in thermal applications of non-renewable biomass

— CDM AMS I.I (Version 02) - Biogas/biomass thermal applications for households/small users

— CDM AMS I.E (Version 4) - Switch from non-renewable biomass for thermal applications by the user

— Gold Standard Technologies and Practices to Displace Decentralized Thermal Energy consumption.

For emission reductions from methane recovery due to change in manure management as a part of a biogas project, the following approved methodology was also considered: CDM AMS III.R (Version 2): Methane recovery in animal manure management systems.

Disclaimer

The tool has been designed to support household technology project developers in conducting carbon finance feasibility assessments. While the developers of this tool are committed to provide quality information, GERES and its partners do not warrant completeness or accuracy and will not be liable in respect of any losses arising out of the use of the tool.

This free tool assists project developers self-assess the suitability of carbon finance for energy access and development projects such as improved cookstoves, biogas and charbriquette projects among many others.

The tool enables users to:

— Assess the eligibility of their project — Estimate the emissions reductions generated by the project — Evaluate transaction costs — Identify key project risks — Compare different market options

Financing household technology projects: A tool to assess the suitability of carbon finance

ToolkitAuthors Marina GavaldaoTechnical Director

GERES, 2 cours Foch, 13400 Aubagne, France.

+33 4 42 18 55 88

[email protected]

www.geres.eu

Samuel BryanTechnical Director

Nexus-Carbon for Development

[email protected]

Marion SantiniCommunications Manager

Nexus-Carbon for Development, #33E3 Sothearos Blvd Phnom Penh, Cambodia.

+855 23 990 591

[email protected]

www.nexus-c4d.org

Figure 1: Output of Eligibility Module (Source: Nexus)

You need to gather information about: Project background— Number of units — Geographic region— Timeframe — Project financing requirements Technology performance — Fuel saving — Lifetime — Drop-out rate

Baseline practices — Baseline fuel mix— Quantity of fuel consumed — Animal waste management systems (biogas)Dissemination strategy— Cost

What you need to know before starting using the tool

Figure 2: Financial Viability Module Output (Source: Nexus)

www.HEDON.info/AVXB* Access CDM decision tool

Meet us @HEDON

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friendly companies release GHGs when travelling to work, flying on business trips, switching on lights or using computers. There comes a point where reducing emissions has a prohibitive cost and that is when companies may choose to subsidise their emission reduction efforts by buying carbon credits.

In the same way that companies outsource their call centres or IT services to achieve objectives at a lower cost or with greater flexibility, they can fund an emission reduction elsewhere in the world where it is cheaper, easier to achieve or provides extra benefits. Buying the equivalent number of carbon credits to offset remaining emissions results in corporate carbon neutrality.

There are several possible reasons that drive companies to achieve this status:1. To win new business and retain

clients: for businesses to compete in a competitive landscape, they need an advantage which having carbon neutral status can provide. Offering an environmentally responsible service or product can be reassuring.

2. To engage their staff: some companies value employees as their first strength and believe they will perform better in their job if they feel proud of their company. In some organisations, employees vote for the project they would like their company to purchase, allowing them ownership of the companies’ environmental programme and raising environmental awareness.

3. To show that they are good citizens: individual customers are increasingly sensitive to climate change and sustainability issues, making it important for companies to think about their environmental commitments. Corporate citizenship can be an important driver for purchase decisions.

Each company has its own specific selection criteriaA monetary value is assigned to intangible and non-market benefits through individuals’ ‘Willingness To Pay’ (WTP). WTP is obtained by surveying a sample of the relevant population and

represents the money an individual is willing to spend to receive an additional and hypothetical benefit. In the voluntary market, companies pay a premium for poverty alleviation, indoor air pollution reduction, conservation of biodiversity, reduction of coal mining and oil extraction, job creation, etc. When interpreting the price of carbon credits for various project activities, it can be deduced that companies seem to be willing to pay slightly more for poverty alleviation than for biodiversity conservation (MacKerron et al, 2009).

A company investing in such activities will ensure that the selected project matches their values, culture or social behaviour of their clients, shareholders and financing partners. For example, Carbon Clear has been developing a micro-fund based LPG efficient stoves programme in the conflict-hit region of Darfur, Sudan (see Figure 1) where carbon finance enables impoverished households to cope with desertification, the increasing price of solid biomass and indoor air pollution (Carbon Clear, 2012).

Companies find value in promoting these types of cooking projects to improve their image and attract customers. Similarly, an energy retailer may buy carbon credits from a renewable energy project in an underdeveloped area of Africa to reinforce their corporate integrity; a bank may find communications benefits by buying credits from a microfinance project that enhances economic development; timber and paper manufacturers would prefer credits from reforestation or conservation projects and show their customers they are contributing to carbon sequestration.

For companies to keep funding these projects through the voluntary carbon market, project developers need to be aware that they should also bring value to their funders and help this market to keep growing. This principle is in itself totally different from the way donor-based development projects in developing countries have been designed and operated, where donors are not expecting to receive returns for their financial participation.

Voluntary carbon credit buyers need a robust monitoring system in place to

ensure that the anticipated economic, social and environmental co-benefits have been delivered. Project developers able to provide certified evidence of co-benefits are best able to obtain higher prices and increase demand for credits.

The total investment required to stabilise GHGs is of a magnitude far larger than the current size of the voluntary carbon market. However this market can make an important contribution to improve the lives of poor communities. Greater efforts have been made to ease the market access for many projects but there are still challenges associated with building demand to ensure the viability and sustainability of this market.

References

Ambec, S., Lanoie, P., 2008. Does It Pay to Be Green? A Systematic Overview. Academy of Management Perspectives, Volume 22, Issue 4

Ecosystem Marketplace, 2010. Reports on Payment for Ecosystem Services (accessed May 2013). Available from http://www.ecosystemmarketplace.com/

Kossoy, A., Guigon, P., 2012. State and trends of the carbon market, 2012. Washington DC: Annual Report, The World Bank

Stern, N., 2006. Stern Review on the Economics of Climate Change. Cambridge, UK: Cambridge Univ Press

World Bank, 2010. Generating the Funding Needed for Mitigation and Adaptation: World Development Report 2010. Washington DC, USA: The World Bank, Chapter 6

www.HEDON.info/GUXB* Profile of author* Full list of references

Meet us @HEDON

25

2010 2011

Volume (MtCO2e) Value (US$ million) Volume (MtCO2e) Value (US$ million)

Pre-‐2013 CER 124 1,458 91 990

Post-‐2012 CER 100 1,217 173 1,990

TOTAL 224 2,675 264 2,980

It is becoming increasingly common for businesses to report their environmental impact and support

initiatives that reduce carbon emissions. While many industrial companies have obligations to offset emissions, some companies offset theirs voluntarily for corporate social responsibility related reasons. Organisations may choose to support the conservation of a hectare of tropical forest in Indonesia, improve the management of a cubic meter of water in India or prevent a tonne of carbon dioxide from being released from fossil fuel combustion in Mexico. These projects enable private funding to be channelled into initiatives aiming to make a positive contribution to major environmental challenges such as climate change, loss of biodiversity and shrinking water reserves.

The World Bank’s 2010 World Development Report highlighted a requirement of between US$ 265 and 565 billion per year just for climate change mitigation. If we consider that the annual development budget for OECD countries

was US$ 133 billion in 2011, supplemental financial contributions from businesses could make an important contribution to the World Bank’s financial requirement forecasts.

The important role of the voluntary carbon marketUnder the Kyoto Protocol, companies constrained by regulation inevitably favour the most cost-effective approach to comply, usually purchasing credits from large renewable energy projects, landfill or industrial gas destruction from projects based in transition economies. According to the United Nations Framework Convention on Climate Change, purchases of this type have contributed to the reduction of more than a billion tonnes of CO2 equivalent. They also have resulted in approximately US$ 3 billion invested in developing countries in 2011 (see Table 1).

By reducing the resources required for projects to get certified, the voluntary

carbon market has opened up access to carbon finance for small projects in developing countries. This market has been extremely innovative in this respect and represents a large number of interesting and dynamic projects.

Carbon credits issued by voluntary standards are essentially the same as those issued for compliance markets in that they both represent a tonne of CO2 emissions. However, the money generated through the sale of voluntary credits may play a more significant role and have greater impact, especially when it is the only source of income.

The rationale behind carbon neutralityBusinesses purchase carbon credits to offset their operations or their products’ emissions and become carbon neutral. From an organisational or product point of view, this means that the respective net carbon footprint is zero. Employees of even the smallest or most environmentally

Voluntary carbon offsetting: A growth marketKeywords: Carbon finance; Voluntary emission reduction; Carbon neutral; Payment for ecosystem services; Development funding; Clean energy

In operation for several years, the voluntary carbon market has helped small, domestic energy activities to access funding through carbon finance. This article aims to illustrate some of the reasons why private companies are increasingly choosing to offset their emissions by purchasing carbon credits and are willing to pay a higher price for activities that enable poverty alleviation.

PEER REVIEWED

Author

Olivier Levallois Carbon Projects Manager

Carbon Clear, Unit A, 70-78 York Way, London, N1 9AG United Kingdom

+44 (0)203 589 9432

[email protected]

www.carbon-clear.com

Figure 1: Beneficiary of LPG stove in Darfur (Source: Carbon Clear Limited)

Table 1: Transactions for primary Certified Emission Reductions or CER under the Clean Development Mechanism worldwide (World Bank – State and Trends of the Carbon market 2012)

VIEWPOINTS

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VIEWPOINTS


Tell us about yourself and how you got into the business of rural electrification

My name is Mansoor Hamayun and I am one of the co-founders of BBOXX. I come from Pakistan originally and grew up in Sweden. Living in London always interested me so when the opportunity arose to study Electronic and Electrical Engineering at Imperial College, UK, I grasped it with both hands. During my second year of studies, the repetitive nature of the work and studying topics in such a formal fashion started to get to me. One day I asked myself: ‘What is the point of studying Electrical Engineering when half the world doesn’t have electricity?’ This triggered a bit of thought but I didn’t think about it too much at the time. Sometimes when I saw pictures of poor, rural areas without electricity on the TV, the thought would come back to me that 1.6 billion people don’t have access to this fundamental resource. It made me think about how fundamentally important electricity is in providing an acceptable quality of life.

So, I, along with a few other friends, started talking about these issues. We decided to start a charitable organisation with the intention of tackling this problem, using the support Imperial College was able to offer. In essence, we thought about the engineering solution to this problem. We eventually saw an opportunity in the Energy Kiosk, which is where e.quinox, a charitable student run foundation at Imperial College, was born.

E.quinox was an unprecedented success; we had such a high demand for the solutions that we had to scale up. This was also the point where we realised the popular appeal of the solar revolution. We realised that there were a considerable number of people wanting to join the solar revolution but did not have the confidence, skills or ultimately the knowledge to do it without the backing of an academic institution. This is something that later inspired BBOXX’s franchisee structure. With this in mind, we started manufacturing products.

My colleagues, Laurent and Chris, and I (right to left in the photo above) left e.quinox with the handover of the student organisation to the new committee. However, we still received huge numbers of requests from around the world and shortly afterwards, we were contacted by the BBC who ran a World Challenge programme with us. We won a very prestigious award which generated a lot of media interest in us at the time. This in turn resulted in a lot of people from different countries contacting us and asking for our help. All too often our answer had to be ‘Not right now – I am in the middle of my final year project.’ It was really towards the end of my final year of studies that Chris, Laurent and I decided that we had to continue what we had started.

How did you gather support from student volunteers and create a viable business structure at e.quinox?

I was the first chairman of e.quinox and my first six months revolved around answering those questions. I began by creating a structure because there are a few practicalities one has to put into place when building a student-based organisation. When you have temporary staff, such as students, the rotation is immense and there is a large amount of training and re-training that needs to take place. The other issue is inspiring your volunteers. In a traditional organisation you reward people’s work with money, but in a student-run charity organisation you can’t necessarily do that. You have to reward people in different ways; with responsibility and glory.

I realised early on that there were a lot of students running around like headless chickens. They wanted to use their engineering knowledge to drive real change, not incremental change but big, transformational change. I believe – and I am talking as an ex-engineering student here – that the bigger the problem you present an engineer with, the more excited about it they become. The marketing around it is also very important; what is the carrot at the end of the stick? Our initial carrot was the promise of developing a solution; we wanted to develop a solution and convince the government of Rwanda to implement it. They were bold statements to make with nothing in hand but they were our ambitions

Interview with Mansoor Hamayun, BBOXX

In this Viewpoints feature we had a talk with Mansoor Hamayun, co-founder of BBOXX and e.quinox.

He describes how he and his colleagues set up e.quinox while they were students at university to help solve the problem of rural electrification and how their efforts have grown into the company BBOXX.

Viewpointsfrom day one. The sense of exoticness of central Africa and the challenge of engineering along with the prospect of raising money and creating sustainability was a potent formula for motivation. By the time I left e.quinox we had around forty people in the organisation. I think that is the key to involvement. Students are very creative and they have a lot of time. Give them responsibility and they can deliver very high quality results.

So about BBOXX today, what is your vision and mission? What kind of products do you offer customers?

I think we have to start with the basics. When we do projects we travel around the market trying to understand what people actually need. We quickly realised that rural electrification is not a matter of kilowatt-hours. It is about providing people with the functionality of electricity in an off-grid setting. People want to know how much it will cost them to light a bulb for one hour. Industry-speak or jargon means nothing and understanding this is fundamental to doing business.

We don’t concentrate on providing people with light; we focus on providing people with an electrical experience. Our smallest kits, that retail under US$ 100, have the capacity to power lights, a low watt TV, and charge a mobile phone. People that buy them can even run a small business in mobile phone charging. We don’t want to sell people a product; we want to provide them with a lifestyle.

We didn’t start BBOXX with the intention of designing and manufacturing our own products. We soon found however that there was no existing product that fitted the specifications we wanted and so we designed and manufactured the product ourselves. We also realised that there are a lot of people in the world who have a basic understanding of solar energy and a lot of businessmen around Africa that want to invest in the sector. What these businessmen can do is buy the BBOXX franchise, a system that has facilitated our rapid entry into 14 markets. BBOXX has now sold products in over 35 countries and we have around 170 people working globally under the BBOXX brand name.

What are the most popular products you sell? And why do you think that is?

Our core product is a range of solar powered ‘battery boxes’ that allow a user to power small appliances, from lights and mobile phones, to TVs, fridges and computers. The product range is designed to be plug and play, with minimal installation time and is robust enough to survive the trials of the rural African lifestyle.

Different products are popular in different markets. In DR Congo, the larger, DC US$ 10,000 systems are very popular as having electricity is essential for running a business in the country. Purchasing electricity there is as important as getting a car. In Kenya, the smaller, US$ 100 systems are quite popular. It really depends on the initial demographic you target. Globally speaking, we are seeing a fairly equal split between revenue in all product classes so far.

What support services do your provide to customers in addition to the portable electrification systems?

We take the time to understand each local market to make sure that all franchisees have the necessary tools to become successful solar businesses. We analyse market feedback and adapt strategies within markets accordingly. Products are constantly modified as we learn and improve our understanding of the requirements of our users. As a global business with operations in 14 markets, we have a lot of best practices

within each sector. We have set up distribution networks where previously none existed, distributing to market groups where there was very little data. We have also targeted places where there was very little information about the benefits of solar. In order to minimise the risks presented by all these unknown factors, we quickly gained as much insight as possible from our operations and we continue to do so. We also try to rotate the best practices as much as possible to make sure we are one big, seamless team.

How do you manage your product range as there is a huge variety in the locations you operate in, which must have very different needs from your consumer base?

Exactly. We have a very wide range of solar products so one of the key roles for our distribution network is to see which areas to target and which products are appropriate. For example, if we are targeting little communities with very small incomes, there is little point in selling big systems. These big systems are more relevant to schools, clinics and government offices. Understanding these differences between markets and adapting the sales strategy accordingly takes time and experience. In the beginning we tried to do everything but we quickly came to realise that this would not work and that we should consolidate our efforts into a proper strategy; one which pushed each product class into different sectors.

Figure 1: The founders of BBOXX, from left to right: Mansoor Hamayun, Christopher Baker-Brian and Laurent Van Houcke

Figure 2: Three men and their BBOXX product

29Boiling Point. ISSUE 62 — 2014

Boiling Point readership

The journal Boiling Point started in 1982 as a six-page household energy publication, photocopied in-house and stapled by hand, to be distributed by post to a small number of organisations that were known to its originator Ian Grant. The journal is still as relevant today, and is now distributed to around 1600 readers as a print version, whilst a further 21,000 access it on line.

Now published by HEDON, a paper questionnaire was sent to all readers receiving the printed version. A slightly larger questionnaire including questions on some of the web-based information resources provided by HEDON was available online. These findings are based on a modest response from both printed version and online readers.

With a plethora of free journals now available online, what makes Boiling Point different? Two main factors spring to mind. Firstly, authors are not required to pay to have their material published – it is always published on merit, and at no cost to the author. Secondly, it is available in paper format for the two-thirds of the global population that cannot access the Internet.

Many respondents only answered some of the questions, so data given below is based on the number answering a specific question, and this number will comprise different people for each question.

FindingsAppearanceThe 60 respondents who answered this question said that they liked its appearance, and 29 of them described why they liked it. Most respondents wrote as much about the content as the appearance in this section. All who replied found that the language was easy to understand. — ‘The overall design is strong and articles are clear and concise. Summaries and illustrations make information immediately accessible and referencing is helpful for further research into topics’. — ‘One gets to read latest information in energy sector globally’— ‘It is a well formulated and presented journal… not just text. Also introducing the authors is also a nice touch’.

ThemesThis section brought out a lot of ideas, and is a very welcome knowledge addition for those producing Boiling Point. Out of 60 replies, 38 felt that the themes were interesting, a further 18 felt that they were ‘often’ interesting, and 4 found they were ‘sometimes’ interesting. None of the respondents said that they were not interesting. Ideas for topics in the future, many of which have appeared in past editions, were suggested by the respondents. They were very diverse and differing, and some of these are compiled in alphabetic order in Box 1.

Usefulness to workUnless Boiling Point brings benefits to those living in poverty, then it is only fulfilling part of its function; thus the usefulness to work is key in identifying the impact of the journal. Of the

62 replies, 41 respondents found it useful, 12 sometimes found it useful, 7 often found it useful, and just 2 did not use it in their work. It was seen that sharing information on technological subjects, updating knowledge and teaching are important factors for those reading Boiling Point (see @HEDON). — ‘We use some articles as case studies during training; We read and translate some articles to our trainers to enable them understand how other countries invest in renewable energy’. — ‘It gives short but detailed reports on topical subjects in a form that is easily digested, compared with a more regular journal. Therefore I am more likely to read it and get ideas for more in-depth study’. Sharing and discussion of ideasDifferent numbers of respondents described the number of people with whom they shared their copies dependent on the work they were involved in. On average, each copy was shared by 8 people, which included friends, business partners and students. Many also reported discussing articles with colleagues and a number of students being part of discussions, indicating that Boiling Point may well be a catalyst in raising new ideas and methods. These results are available @HEDON.

Conclusions

Boiling Point still has a strong role to play in supporting practitioners, policy-makers, entrepreneurs and teachers in addressing household energy needs. This short article can only provide a glimpse at its role, and whilst it is clear that Internet access makes it available to much larger numbers of people, there is still the need for a journal written in an accessible style by practitioners for practitioners, and sent to the farthest corners of the globe – well beyond the reach of the Internet.

HEDON NEWS

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VIEWPOINTS

How do you find your customers and promote your products to them?

I have just returned from a project with a distributor near Lake Victoria in a very isolated place in Kenya, which we started a few months ago. They have sold nearly 100 units to the end consumer base. We attract distributors, even at a national or global level, who sell the products to the end customers. At the moment we’re working with distributors to set out payment plans for purchase. This allows them to become competitive each month with carbon-based solutions in a scheme that has already achieved tremendous uptake. So a lot of the innovation doesn’t come from us sitting in London, it comes from us going to the market and seeing what works and what doesn’t, and why it works or why it isn’t working. We use this insight to attract distributors, who are then supported financially and equipped with retail skills and marketing materials in order to sell BBOXX products to their local communities.

What effect do the products and services of BBOXX have on the local communities?

We do see a transformational effect of people’s lives. Some are intangible and can’t really be measured- things like the happiness and social cohesion that electrical access brings. As scientists,

we found this immensely frustrating so last year we carried out a study into the economic benefits a typical customer achieves. On average in Uganda, people achieve a saving of US$ 16 a month after becoming a BBOXX customer, mainly due to the reduction in consumption of kerosene, batteries and candles. The extra income generated was around US$ 40 per month when using our system. This was mostly a result of extended trading hours or setting up a mobile phone charging facility. We find these are the two main ways people earn extra revenue through our systems.

How have you been supported financially in developing these products and services?

BBOXX was born out of our own personal funds and we have never absorbed any external investment to date, other than from employee option pools and services that many employees have access to. I think our lack of institutional funding has actually been one of our strengths as we never had much cash at the beginning and have had to be resourceful in order to operate and grow despite this. As we move forward however, we are looking to raise some institutional funding in order to take our offering to the next level.

What kind of institutional support would help your business?

We have had a lot of interest from investors but money is not our only consideration. We have always had a very strong company ethic. It is paramount that any individual or organisation we go into business with shares this and our ambition to electrify 20 million people by 2020. Our strategies are not purely profit driven; they are long-term and depend on multiple market entry rather than sequential investment in individual countries. It is incredibly important that any investor understands and supports us in these.

I think the money part is very easy. It’s a very confident statement to make, but we have seen that there is a lot of money out there for the solar energy market. The hard part is finding someone who shares the business strategy and ambition. We are lucky that a few groups understand the way we operate and are excited about pursuing discussions with the end objective of increasing BBOXX markets.

www.HEDON.info/QUXB* Read full interview and comment* Author’s latest contact details

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Figure 3: Installing solar panels

NewsAuthors Liz Bates, Mohamed Allapitchai

HEDON Household Energy Network c/o Eco Ltd, 1 Bromley Lane, Chislehurst, BR7 6LH, UK

+44 (0) 20 30 120 150

[email protected]

Box 1: Some suggestions for future topics for Boiling Point

Briquettes; Charcoal production technologies; Delivery models; Emission factors ; Energy policies; Environmental issues; Forests and agriculture; ICTs, household energy and poverty reduction; Rates of adoption of solar systems; Self-build systems; Solar and pico-solar household systems; Stove testing; Technology of improved cooking stoves; Utilities management

www.HEDON.info/BVXB* Uses of Boiling Point* More on sharing & discussion of ideas

Meet us @HEDON


GIZ NEWS

To unlock further growth, the sector has to become more attractive for multinational enterprises and investors, too, argues Radha Muthiah from the Global Alliance. The market is still rather fragmented to date and standards are missing. This poses risks on investments of private capital. Therefore the participants of the forum asked the Global Alliance to use their advocacy power, to speed up standardization and to influence national governments for example to develop favorable tax and tariffs for energy-efficient products.

The Forum based on the widely accepted assumption that clean cooking does not only deal with cooking devices, but embraces the whole value chain from fuels to cooking behavior. Integrated approaches that take into account the complexity of the topic are necessary. Additionally, research and development have to be strengthened.

There is still a long way to go. But in comparison to 20 years ago, appropriate technologies and dissemination strategies are available today. In summary, there is good reason for the enthusiasm in the sector.

31Boiling Point. ISSUE 62 — 2014

GIZ NEWS

NewsEditors Katja Diembeck, Monika Rammelt

GIZ HERA, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Postfach 5180, 65726 Eschborn, Germany

[email protected], [email protected]

Clean cooking gaining momentum Clean cooking has made it back on the international agenda. At the International Cooking Energy Forum held from 26th to 28th of June in Bonn, Germany, approximately 130 energy experts discussed how the sector can take advantage of this momentum.

The Forum’s aim was to strengthen the existing partners’ commitments and build new partnerships within the framework of the Global Alliance for Clean Cookstoves, and further the goal of spurring the adoption of clean cookstoves and fuels for an additional 10 million households by 2020. During the discussions, the importance of energy for achieving the Millennium Development Goals has been recognised for the Post-2015 MDG Agenda. “Clean cookstoves can add to every single of these goals,” stated Hans-Jürgen Beerfeltz, State Secretary of the German Federal Ministry for Economic Cooperation and Development on the Bonn International Cooking Energy Forum which was hosted by his Ministry together with the Global Alliance.

Radha Muthiah, Executive Director of the Global Alliance for Clean Cookstoves summarised the current development: “Today the cooking sector is less fractionized. An idea of a common vision exists, there are new stakeholders joining our coalition and there is a growing interest from donors.”

The growing awareness of the topic is needed. “We know that there are 3.5 million premature deaths every year caused by indoor air pollution which is much related to what people use for cooking and heating at home,” stated Maria Neira, Director of the Department of Public Health and the Environment at the World Health Organization, thus confirming the data from the Global Burden of Disease Study 2010, published in The Lancet in December last year.

What strategies lead to success?

The participants from all over the world - mainly European and African partners of the Global Alliance like the French NGO Groupe Energies Renouvelables, Environnement et solidarités (GERES), Practical Action and SNV - discussed how the sector can use the increasing attention for the topic of clean cooking energy.

Every initiative favors its own approach. A one-fits-all approach does not exist. This is especially true for cookstove technologies. Cookstove designers have to follow the needs of the users, who are very much related to their cooking culture, the type of food they have to prepare and the fuel that is locally available and affordable.

Programmes that provide access to clean cooking energy target at positive implications for health, CO2 reductions and resource savings. However, the selling point might be different. “Many women stress convenience and the boiling speed,” explains Christa Roth, a consultant who frequently works for GIZ. Cookstove companies and producers have to take this into account if they want to be successful.

Even though the approaches have to be tailor-made, there are also quite a number of common findings, too. The participants of the conference discussed that first of all, cookstove technologies should be improved in order to advance towards clean cookstoves, not just cleaner cookstoves. Many of the so-called improved cookstoves disseminated today do not really provide sufficient health benefits. To date, however, there is no clear definition of what is clean and improved. Consequently, the aspirational goals have to go hand in hand with minimum standards to ensure that the needs of the people at the bottom of the pyramid can be addressed.

Secondly, the focus will have to lie on market-based approaches. “Three billion people are a substantial market and this is the reason why we focus on a market-based approach and not an aid driven one,” adds Radha Muthiah from the Global Alliance. Different business approaches can address differing needs. The market is big enough for various strategies.

There are numerous challenges though. There still is a lack of awareness regarding cooking energy issues. Missing standards are a barrier for enterprises and investors. Additional funding for public sector interventions is needed and the various stakeholders should act in a more coordinated manner.

Monitoring

One major challenge is the monitoring of impact. While increasingly more stakeholders enter the stage it becomes more and more urgent to find ways to avoid double counting. Moreover, in most countries methods and intensity of data collection have to be improved. “From our 700 partners 80 had reported the data we have asked them for”, said Leslie Cordes, Senior Director of Strategic Partnership of the Global Alliance.

The participants recommended establishing national databases for cooking energy. This could be piloted in some of the priority countries of the Global Alliance or the Worldbank/ESMAP. Moreover, the Secretariat of the Global Alliance and their members should work jointly to review existing monitoring structures and to develop a toolkit for identifying gaps in current reporting.

Scaling up

To speed up the provision of access to clean cookstoves, the forum analyzed the whole value chain and identified needs of different stakeholders. Local producers, small and medium-sized enterprises need support in product design. Other companies ask for support in order to apply for carbon finance. Moreover, cookstove testing is necessary to make sure these cookstoves meet the requirements.

To support market penetration, constant awareness raising is a prerequisite. “We have made the experience that many of our people don´t want to change their cooking habits. Thus we need help in this respect,” explains Luis Miguel Imaña from Peruvian Sencico, Executive Director of Sencico, Ministry for Housing, Construction and Rehabilitation in Peru, responsible for certifying cookstoves.

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Ingredients for Sus-tainable Cookstove Interventions – Lessons from India

Indoor air pollution (IAP) causes around 480,000 premature deaths annually in India, as per the WHO. The use of improved cookstoves can significantly reduce IAP and biomass consumption with its negative effects on health and the environment. Despite the large-scale National Programme on Improved Cookstoves (NPIC), that has been implemented by the Minister of New and Renewable Energy (MNRE) between 1983 and 2002, and initially succeeded in distributing tens of millions of improved cookstoves, the adoption of these stoves has so far been low in India.

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), GIZ under the Indo-German Energy Programme Renewable Energy Component (IGEN-RE), has just published a comprehensive analysis on the lessons learned from the NPIC. It identifies the factors for successes as well as shortcomings based on the analysis of existing studies and literature. These lessons are important in improving present and future cookstove interventions.

”Ingredients for Sustainable Cookstove Interventions – Lessons Learned from the Indian National Programme for Improved Cookstoves (NPIC)” is available for download via @HEDON.

Frequently Asked Questions on Im-proved Cookstoves – New BMZ/GIZ HERA Factsheet

“Why are you still disseminating the same old stoves? If the stoves really are that beneficial, why are they not spreading spontaneously? Why not subsidize the stoves and supply whole countries and regions in one go? Isn’t the smoke in the huts needed to drive out the mosquitos?” Are you facing these or similar questions in your day-to-day working routine? HERA has compiled a whole list of questions frequently asked by people both interested in and critical towards GIZ’s work in the field of improved cooking. The new 4-paged factsheet provides brief, suitable answers that can also facilitate the communication in the GIZ projects on the ground. The factsheet is available upon request to [email protected] or at the HERA website (available @HEDON).

HERA Convenes Roundtable on Last Mile Distribution of Solar Off-Grid Products

Around the SE4All Conference at Addis in early December 2013, HERA and Global Lighting and Energy Access Partnership (Global LEAP) organized two roundtables on the last mile distribution of solar off-grid products and convened some of the most successful companies (d.Light, Greenlight Planet, Barefoot Power, SunnyMoney, Mobisol, Azuri Technologies and others) and the key donors in the sector (World Bank, IFC, US Department of Energy, USAID Power Africa, Practical Action, GVEP, SNV). The participants discussed challenges for the distribution of solar products, and possible support activities of donors and development organizations. The second roundtable focused on donor harmonization and mutual understanding of the various donors’ activities in the field of off-grid lighting. Following the meetings, the members are preparing a list of recommendations to enhance the opportunities and activities of the private sector in the field.

www.HEDON.info/EUXB* Download report on lessons from India* Frequently asked questions on improved cookstoves

Meet us @HEDON

PRACTICAL ACTION NEWS

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PRACTICAL ACTION NEWS

Boiling Point. ISSUE 62 — 2014 33

Editors Abbie Wells, Toby Milner

Practical Action, The Schumacher Centre, Bourton on Dunsmore, Rugby, Warwickshire, UK, CV23 9QZ

[email protected], [email protected]

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One billion people deprived of adequate healthcare because of lack of energy, says Practical Action

Figure 1: Asma, a housewife from Danggi Village, Bangladesh (Source: Practical Action)

A new report has found that one billion people in the developing world are deprived of effective healthcare due to a lack of access to energy.

Without access to energy, medical centres and hospitals cannot function effectively, life-saving vaccinations can’t be stored, there is no light after sunset to carry out procedures and important medical equipment such as ultrasound machines and operating equipment cannot be used meaning women can lose their babies, and even their lives in childbirth.

Development charity Practical Action launched the latest edition of its Poor People’s Energy Outlook (PPEO) recently, setting out a new way of measuring people’s access to energy and ensuring the poorest around the world are not ignored.

Asma is a housewife living in Danggi Village of North Channel Union, Bangladesh. A couple of months ago, pregnant Asma slipped and fell whilst collecting water:

‘My child was not moving. In our community health centre there is no X-ray or sonography, the only option is Faridpur Hospital. For poor people like us city hospital treatment is expensive. Then we borrowed 3000 Takas (£25) and seek treatment at the hospital. But the doctor couldn’t save the child and did a minor operation. He asked us to come again for follow-up but we don’t have money to continue the treatment. Now I am in so much pain, doctor said I have infection in my uterus.

‘As long I live I will have to bear the pain. Sometimes I think that if there were electricity in our community health centre, my fate might be different. But for the last 22 years we could not get any electricity, who knows many years will pass by before it becomes reality’.

This is a typical story from a community health care centre in Bangladesh, where electricity is scarce. Health centres are lit by candlelight, where minimal services like using sterilised medical equipment, access to regular professional qualified staff and even the security of the health centre at night; cannot be guaranteed. These medical centres often can’t use the basic medical appliances they have because no electricity is available to power them.

Before the PPEO report was published measurements of how the poorest people access energy only took into account large scale, grid-based energy and ignored the needs of poor people who need sustainable, appropriate solutions to energy

The new measurements that Practical Action has developed in partnership with the UN and World Bank mean that we can better understand the needs of how poor people use energy and so resources can be properly directed to have the biggest impact on people’s lives.

The system developed by Practical Action has been adopted by the United Nations as part of its Sustainable Energy for all initiative.

This year’s report focuses on energy for community services such as schools, health centres and hospitals. For more information or to view the report in full, visit www.practicalaction.org

European Parliament event remembers all those without power on World Environment Day

If you look at a NASA satellite image of the Earth from space at night you will see that much of Europe is lit up like a Christmas tree. In contrast most of Africa and large parts of Asia will be in total darkness (see Figure 2). That energy divide between the developed and developing world too often goes unnoticed and unreported. But it has a massive impact on the battle to lift people out of poverty.

It’s an often quoted statistic that one in five people in the world have no access to electricity, and two in five cook with wood or other biomass on simple cookstoves. It needs constant repetition because people living in developed countries, who have access to energy all the time, usually don’t give it a second thought.

That’s why on 5 June, World Environment Day, Practical Action and the Stockholm Environment Institute hosted an event at the European Parliament entitled ‘Lighting up the dark – how energy access can transform the lives of Africa’s poor’. The event highlighted the role which energy and cooking plays in lifting people out of poverty and why they need to be one of the new United Nations Sustainable Development Goals (SDGs).

Figure 2: Lighting up the dark (Source: Practical Action)

Keynote speaker at the event was Betty Maina, Chief Executive of the Kenya Manufacturers Association and a member of the UN High Level Panel who a few days earlier had published a report advising the Secretary General on what the news SDGs should look like. The event was hosted by two members of the European Parliament - Norbert Neuser and Sirpa Pietikainen.

Most major international development organisations now recognise that total energy access is the key to lifting billions of people out of poverty. Our event showed how lack of access to electricity deprives people of even the most basic services while lack of access to improved cookstoves and better cooking fuels severely affects the health of women and children throughout Africa.

We will now be following it up by inviting Andris Piebalgs, the Development Commissioner at the European Commission, to see projects on the ground in Kenya for himself.

New book on energy access and delivery from Practical Action PublishingIn October 2013, Practical Action Publishing launched a new book, Delivering Energy for Development, to make the case for decentralised and sustainable energy delivery in the Global South and to show how it can be achieved.

Currently, access to modern energy services remains low or non-existent for almost 2.8 billion of the world’s population. Energy practitioners worldwide are facing the enormous challenge of delivering access to modern energy services where poverty and lack of infrastructure makes it most difficult. Delivering energy services is a complex task requiring skills and knowledge covering technical to managerial and social aspects. Rising awareness about climatic change and the notion of energy security for future generations are also being channelled into the debate.

Delivering Energy for Development provides a framework to guide practitioners in designing sustainable and pro-poor energy delivery systems which are based on market approaches but also take into account the social principles of development and the reality in which development projects operate. The framework includes the analysis of the market chain of each energy system, and an examination of its enabling environment as well as the supporting services that, due to the challenging conditions of the development context, might be required. The messages conveyed are illustrated by a series of relevant case studies of on-grid, mini-grid and off-grid delivery services, highlighting their shortcomings as well as their successes, and giving key recommendations.

The book concludes with an appeal for greater collaboration between development actors and asserts that concerted action between all parties can start to make feasible the eradication of energy poverty and the achievement of universal and sustainable energy access.

This book is essential reading for energy development policymakers, practitioners and researchers within government departments, development agencies and university departments and is a useful read for anyone who needs to understand the role of energy access in development and who will be involved in implementing a programme to develop it.

The authors are Raffaella Bellanca, a Country Coordinator with International Lifeline Fund in Haiti currently working on local production and commercialization of improved cookstoves. She has also worked as a consultant in access to energy following experience as a Cleantech entrepreneur. Ewan Bloomfield is an International Energy Consultant with Practical Action Consulting, UK, with more than 15 years of international development and engineering experience from around the world. He currently specializes in household cooking and bioenergy. Kavita Rai is an energy specialist with 20 years of international experience in renewables, enterprise engagement and socio-economic development.

www.HEDON.info/FUXB* Order the book, Delivering Energy for Development* More on Practical Action Publishing

Meet us @HEDON

NEXUS NEWS

35

NEXUS NEWS

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Editor Marion Santini

Nexus-Carbon for Development Singapore office: 352 Tanglin Road #0202, Singapore 247671 UEN: 200915559E Cambodia office: #33 E3, Sothearos boulevard Phnom Penh P.O. Box: 956

www.nexus-c4d.org

[email protected]

About Nexus-Carbon for Development Nexus is a cooperative of development organisations that support vulnerable communities by scaling up successful climate-friendly projects.

This nonprofit and collaborative structure enables members to share expertise and services, access technical assistance and international funding opportunities such as carbon finance. Acting together and committing to a common vision, Nexus members benefit from economies of scale, reduced risks, and a strong voice in the global community.

Universal access to clean energy and safe water is crucial to alleviate poverty. Functional and energy-efficient solutions to meet local needs exist, but they remain out of reach for the most vulnerable populations.

Although carbon finance can help disseminate energy-efficient technologies to more vulnerable populations, few development organisations can access it because of high transaction costs, complex methodologies and inequitable financial risks. Specialist expertise is needed, but is not cost-efficient for development organisations to internalise. Therefore, valuable revenue is lost or diverted to external experts rather than used for reinvestment and scale up of projects.

Nexus, through its nonprofit cooperative structure, helps mutualise the resources and risks involved in accessing carbon finance, to pursue the development aims of its members. The cooperative has committed to provide clean energy to 20 million people in developing countries by 2020, while reducing greenhouse gas emissions by 10 million tons CO2eq.

New partners support direct partnership platform Nexus-beyond offsettingOrganisations that purchase carbon credits to “offset” their greenhouse gas emissions often ignore how much of the purchase price goes to the original project. Nexus allows companies and public institutions to purchase carbon credits directly from our cooperative of project developers. This fair approach to offsetting ensures that 85-90% of purchase price goes back to the project and its beneficiaries.

CERES Fair Food is an ethical organic food delivery service and online grocer providing Melbourne with the freshest seasonal organic fruit, vegetables and health foods, all sourced from local farming families and artisans who are paid a fair price for sustainably grown and made food.

CERES Fair Food has partnered with Nexus-beyond offsetting to offset the carbon emissions of its organic food delivery service until July 2014 by supporting the New Lao Stove project developed by Group for the Environment, Renewable Energy and Solidarity (GERES) Cambodia. Support to the award-winning project will help reduce pressure on Cambodia’s natural resources but also create income generating activities for producers and distributors of improved cookstoves in Cambodia.

The Joint Climate Change Initiative (JCCI) is a consortium of three international organisations working in Cambodia - Forum Syd, Danish Church Aid/ Christian Aid and Cord - with the aim to build capacity and resilience to future climate stressors of Cambodian organisations and the communities they work with and to put a “climate change lens” on their existing programmes

The first JCCI capacity building phase ran through 2010 and the second in 2011 with 10 and 12 Cambodian organisations participating respectively. Each capacity building process, consisting of a series of class-room and field-based workshops, culminated in partners developing action plans and project proposals for how to work with climate change in the coming year; the pilots were later funded through the JCCI.

In 2012 the JCCI was funding 19 organisations at the same time as designated Cambodian advisers provided further capacity building and coaching support for implementation. In 2013, five organisations were chosen to develop model sites as a continuation of their pilot interventions to strengthen both theoretical and practical implementations for demonstration.

JCCI partnered with Nexus-beyond offsetting to offset the carbon emissions of JCCI’s air travel in 2012 with the support of the New Lao Stove project developed by GERES Cambodia. The award winning project contributes to the reduction of carbon emissions, improved local livelihoods, and the protection of Cambodia’s natural resources.

Figure 1: Hydrologic end user (Source: Nexus)

Nexus participated in PPCR May 2013 meetingsNexus attended the Pilot Program for Climate Resilience (PPCR) sub-committee meeting held in Washington D.C., United States on May 1st 2013 and the following Pilot Country Meeting held on May 1st, 2nd and 3rd.

In 2012, following a selection process including a poll, Nexus was appointed as a civil society observer for the Climate Investment Funds (CIF) Pilot Program for Climate Resilience. Our application was supported by an important number of votes from the civil society and received a high score. Nexus is now responsible for sharing information with its constituency about the key issues and activities of the CIF committee. This includes soliciting feedback from constituents and reporting that feedback to the CIF committee. Nexus brings to CIF the voice of pro-poor project developers and promotes the specificity of rural energy and pro-poor projects.

New project funded by the Nordic Climate Facility: Social enterprises scaling up water purification in the Mekong Region

Nexus-Carbon for Development, is pleased to announce that, together with two of its member organisations, TerraClear and Hydrologic Social Enterprise, and the Finland Futures Research Centre, it has been selected by the Nordic Climate Facility (NCF) to scale up water purification activities in Cambodia and Laos.

Conference – Global Partnerships, Local Impacts: Access to basic needs for vulnerable populations

The conference organised by Nexus-Carbon for Development took place on 12th July 2013 at the Matrix @ Biopolis in Singapore and brought together project developers, private sector donors (corporations and individuals) and crowd-funding organisations to share lessons about successful global-local partnerships and connect promising projects with private sector companies. Speakers included representatives from Deutsche Post DHL, Accor, Milaap, and much more. The speed networking session, facilitated by the Facilitators Network Singapore connected private companies with projects fighting both climate change and poverty.

S3IDF selected for the Grants for Innovation 2012 fundingIn 2011, Nexus launched the Grants for Innovation scheme to identify promising projects within the membership and raise funds to support them. The objective is to support innovative approaches to climate change mitigation and poverty alleviation which could potentially lead to high impact projects. S3IDF uses its Social Merchant Bank Approach (SMBA) to provide entrepreneurs with three bundled services: leveraged financing assistance, technology access and know-how, and business development support. The SMBA leverages philanthropic and development capital (including carbon finance) to mobilise local private capital to finance or co-finance viable enterprises. By tailoring the approach to local conditions and market demands, S3IDF enables access to employment, asset-creation opportunities, and basic services. These services include lighting, drinking water, hydropower, cooking solutions, communication, and technologies for small-scale industries.

Hydrologic profiled in research on marketing to the Base of the PyramidHydrologic was profiled as one of 15 pioneering enterprises that have developed “best practices” in marketing life-changing devices to the Base of the Pyramid (BoP) in Asia, Africa and Latin America for its ceramic water filters, in March 2013. The research project, ‘Marketing Innovative Devices for the Base of the Pyramid’ was sponsored by the Shell Foundation and the Bill & Melinda Gates Foundation and implemented by Hystra, a global consulting firm that straddles the business and social sectors. More information can be found @HEDON.

Boiling Point. ISSUE 62 — 2014

www.HEDON.info/UUXB* Web links to extended news items* News from Nexus’ partners

Meet us @HEDON

GACC NEWSGACC NEWS

36

Editors Jennifer Tweddell, Stephanie Valdez

UN Foundation, 1800 Massachusetts Avenue, NW, 4th Floor, Washington, DC 20036, USA

[email protected]

Driving Investment into the Clean Cooking SectorThe Global Alliance for Clean Cookstoves (Alliance) has identified the creation of a thriving global market for clean cookstoves and fuels as the most viable way to achieve universal adoption of clean cooking solutions. This principle was further developed and validated in ‘Igniting Change: A Strategy for Universal Adoption of Clean Cookstoves and Fuels’, the first sector-wide strategy to transform the sector based on the input of over 350 leading experts and practitioners across the globe. Coordinated and published by the Alliance, the report outlines a three-pronged strategy for creating such a market: • Enhancedemandbyunderstandingandmotivatingpotential

users, developing better and more technology, providing consumer finance and creating innovative distribution models to reach remote consumers;

• Strengthensupplybyattractingmorefinanceandinvestment,accessing carbon finance, enhancing market intelligence and creating inclusive value-chains;

• Foster an enabling environment by engaging nationaland local stakeholders, building the evidence base for the benefits of stoves, promoting international standards and rigorous testing protocols and enhancing monitoring and evaluation.

An essential part of the strategy to create a thriving market is attracting more finance and investment to the sector, which is why increasing investment is one of the six global value propositions identified in the Alliance’s strategic business plan.

In order to reach its goal of 100 million homes adopting clean cooking solutions by 2020, the Alliance is looking to generate a billion dollars in investment in the sector by 2020. This will ramp up from $75 million between 2012 and 2014, to $750 million from 2018 to 2020 (see @HEDON for graph on investment phases).

Preparing the market for scale

The Alliance is engaged in a variety of activities to generate demand for clean cooking solutions and develop a market enabling environment. These include engaging national and local government stakeholders, building the evidence base for the benefits of stoves, and promoting international standards and rigorous testing protocols. A key priority for the Alliance is the development and implementation of international standards via the International Organization for Standardization (ISO) and the development of a global network of centers for stove testing. In addition, the Alliance has fostered the development of interim standards that define tiers of performance and interim standardized reporting guidelines.

Figure 1: Alliance strategy to drive investment into the sector

Barriers to past investment

Although there have been investments in clean cooking enterprises to date, and interest in the sector is growing among early stage impact investors, the lack of finance flowing to the sector remains high due to:• Lackofmaturityofthecleancookingsector:Themajority

of impact investors look for market conditions that are well prepared for sustainable scaling. This includes having clear standards for assessing and benchmarking product performance, clear demand for the product and an enabling policy environment. The reality in the clean cooking sector - lack of standards, low awareness of the benefits of clean cookstoves and fuels, and high import tariffs for raw materials and finished products is a higher risk and tough proposition for investors.

• Lackof‘investmentready’businesses:Mostcleancookingenterprises are at an early stage of development and need patient capital as well as business development assistance. Capacity building needs depend on the enterprise and range from marketing strategy to streamlining manufacturing to budgeting and business planning. Few impact investors are prepared to provide money and technical assistance to early stage companies.

• Lackofknowledgeabout thecleancookingsector:Manyinvestors and financial institutions, including domestic and international banks, as well as microfinance institutions, have little or no knowledge of the clean cooking sector.

In order to increase investment to grow the clean cooking sector, the Alliance is working to prepare the market for scale, support the development of commercially viable and scalable enterprises, and raise awareness in the investor community on the opportunities inherent in the sector (see Figure 1).

Developing commercially viable, scalable enterprisesThe Alliance has also engaged in activities to strengthen the supply of clean cooking solutions through encouraging innovation and supporting businesses that have the potential to reach large scale. Most clean cooking enterprises are at an early stage of development and require business capacity building as well as patient capital. In a recent Stanford Social Innovation Review article, Monitor Group and Acumen Fund explore solutions for bridging the so-called ‘Pioneer Gap’ – the dearth of impact investors willing to invest in early stage businesses, preferring instead to invest once commercial viability has been established. These organizations suggest enterprise philanthropy, the use of grants to bridge the gap between startup and scale, as one possible solution. The Alliance has adopted this approach, using grants for capacity building and investment to develop commercially viable, scalable enterprises.

To date, the Alliance has launched two funds to address the pioneer gap between startup and scale: the Pilot Innovation Fund to test innovative technologies and business models, and the Spark Fund to scale successful business models and support capacity building in the sector. Innovations are needed to provide solutions to challenges across the value chain – from product design and technology improvement to consumer finance. Innovation grants can be instrumental in moving the sector forward by supporting proof of concept for potentially game-changing ideas and sharing lessons learned from both successful and failed innovations. In March the Pilot Innovation Fund awarded a total of $300,000 in seed capital to six enterprises, and in May the Alliance announced five partners will share $2,000,000 in Spark grants to fund growth and entrepreneurial capacity development. The Alliance plans to release Spark and Pilot grants annually to continue to spur innovation and scale enterprises in order attract private investment to the sector. The next application round will be announced in the fall of 2013.

A key challenge for enterprises in the sector is access to working capital at reasonable interest rates. The Alliance plans to address this need in two ways: establishing a working capital fund that provides our partners with much needed cash at reasonable interest rates and partnering with local lending institutions to unlock working capital financing to the clean cooking sector.

The Alliance plans to integrate capacity development with grant capital in order to prepare our partners for investment. We have engaged with our private sector partners to assess their growth and capital needs and the conversations revealed a couple of key challenges.

Many of our partners have very strong businesses, but need help with strategic planning and implementing systems that allow them to manage the scaling process. Additionally, many enterprises find it difficult to access resources such as accelerators, mentoring and help with grant and investor

proposals. The Alliance will take strides to address this challenge head-on over the next year through a spectrum of capacity development interventions to complement their investment interventions. Capacity building opportunities will be tailored to enterprises at different stages of development and will range from webinars and online materials available to all Alliance partners, to mentoring and one-on-one consulting with experts available to partners selected via competition.

In response to the feedback from our partners and lessons learned, we will also make key changes to future rounds of the Spark Fund. While the changes are still in the works, the Alliance is planning to alter the structure of the grant to ensure financing is available to businesses that are beyond the proof of concept phase but not yet big enough to effectively absorb $500,000 of cash over one year. We will also distribute preparation materials and conduct webinars, ensuring equal access to information for all of our partners.

Over the next few years, the Alliance plans to attract $250 million dollars of private investment into the sector, and we have already begun the process of engaging investors to broker as many deals as possible. Indeed, we’ve been ‘pounding the pavement’ to inform investors about opportunities in the clean cooking sector, attending events like the African Venture Capital Association conference, the Sankalp Unconvention Summit and Carbon Expo. We will also be showcasing clean cooking enterprises at SOCAP this year and have partnered with the Global Impact Investing Network (GIIN) to educate investors about the sector. We’ve created a searchable database of impact investors interested in energy and the environment and, where relevant, we are directly connecting our private sector partners with investors.

Achieving the Alliance’s ‘100 by 20’ goal will require public and private investment from parties globally. Providing access to capacity development and investment resources at all levels of the value chain and stages of enterprise growth is an essential part of the Alliance strategy to create a thriving global market for clean cookstoves and fuels. We will continue to announce funds and initiatives that provide greater access to finance and investment in the clean cooking sector. We encourage you to join the Entrepreneurs & Investors community for updates and to engage with entrepreneurs and investors in the clean cooking sector. You can also check the Alliance’s funding opportunities and news web pages for more information as it’s released.

www.HEDON.info/TUXB* Projected investments in the clean cooking sector by 2020

Meet us @HEDON

Brokering partnerships and increasing inflow of

capital

2

Mobilizing resources

Market prepared for scale

Strengthen evidence base on benefits

Advocate for policies to support sector

Promote development & implementaCon of

standards

SCmulate demand for clean cookstoves and

fuels

Commercially viable, scalable enterprises

IdenCfy enterprises with potenCal to scale

Enterprise capacity building

Smart grants to bridge the “pioneer gap”

Working and growth capital to scale

Engage investors on opportuniCes in the sector to drive $1 billion investment by 2020

SupporCng innovaCon

Alliance strategy to drive investment into the sector


38 39Boiling Point. issue 62 — 2014

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construction process, making the design easier to understand and implement, leading to more robust turbines.

During the following years, hundreds of do-it-yourself small wind turbines based on this design were constructed. With the growing use of the Internet, the 2005 design manual arrived in different places of the world and was translated in many languages. Successful applications of these wind turbines were documented on the Internet (see @HEDON) leading to individuals and groups setting up their own seminars and projects; further spreading the technology.

Rural electrification was an obvious application of this technology; so many NGOs and groups took up the design manual and locally constructed community small wind turbines in developing countries. Wind Aid in Peru, Blue Energy in Nicaragua and COMET-ME in Palestine, are some of the most active to the present date.

Since then, these design manuals have provided a reference and have proven to be valuable tools in spreading this knowledge. As with most appropriate technology applications, the typical process of developing and transferring technologies often only involved the community and the collaborating organisation or practitioner, meaning that wide spread communication and dissemination was difficult and only occurred through relevant magazines or the handbooks themselves, at least until the emergence of the Internet.

Open source hardware

In recent years, open source hardware has developed rapidly. While initially concerned mostly with electronics, it has also spread to tools and machines, such as the RepRap general purpose 3D printer, among other applications.

Open source hardware applications typically have certain design, construction and maintenance characteristics making them more compatible with certain applications. The products are easier to maintain by the users, since they usually have participated in their construction, and are made to suit local conditions, so they

have improved adaptation capabilities. Also, the cost of the product is small as much of the making and maintenance is carried out by the users in communication with the open source network.

Transparency in design has encouraged research and development, increasing re-configurability of products while the debugging of processes and equipment is made faster and more effective. An active community of participants who are designers and users of the technology is essential for the network to succeed. Typical limitations include language and cultural barriers, lack of Internet access, lack of collaboration infrastructure such as open design tools and lack of funding.

Open source hardware ideas resemble the underlying concepts of appropriate technology. Appropriate technology aims at encouraging technological change that empowers communities with tools and techniques which have beneficial effects on the distribution of income and productivity, environmental quality, social development and on the distribution of decision making power in accordance with local socioeconomic contexts.

With an emphasis on the collective development of a technology through specifically designed web-based tools, and with the use of the Internet for the wide spread dissemination of this technology, open source hardware can provide a useful platform for appropriate technology applications.

Open source hardware small wind turbinesThe vast number of off-grid rural electrification applications waiting to be implemented at a global scale is becoming a driving force for the creation of an open source hardware process. The commercial small wind turbine market is currently not able to provide quality and low cost energy from the wind as the maintenance and support required for small wind turbine systems is costly for the users and the installation company. Small wind turbine production in a global market increases transportation costs for spare parts and down-time during failure,

gradually making local production a most effective option.

The small wind turbine designs presented in manuals have been implemented and tested in large numbers of applications of rural electrification (Taverner-wood, 2011). Local production of the small wind turbines satisfies most appropriate technology criteria and can thus provide a sound solution from a socioeconomic point of view.

In recent years, unofficial research and development work has formed around the open source hardware aspects of the design as it has become more prominent on the Internet. This differs from practitioners’ research which is traditionally conducted through manuals and seminars. Discussion forums like Otherpower (Fieldlines, 2013) have become one of the most popular global hubs for information exchange on self-built small wind turbines, while other discussion boards are prominent in many different countries and languages. Organisations such as Wind Empowerment, aim at providing the financial and human resources needed for the activities of their member organisations and at performing joint technical research while sharing technical information. University research groups in TU Delft, UC Berkley, UPC Barcelona, HTW Berlin, TUoS Sheffield, NTUA and other research centers such as KAPEG in Nepal have included locally manufactured small wind turbine designs, based on the design manuals, in their research activities (Kotsampopoulos et. al, 2011).

Local manufacturing of a small wind turbine in the National Technical University of Athens

In 2011, tests were carried out on the axial flux generator of an 850W (2.4m rotor diameter) small wind turbine (Figure 1) in the Electrical Energy Systems laboratory of the National Technical University of Athens (NTUA). The wind turbine was constructed following the process described in Wind Turbine Recipe Book: The Axial Flux Windmill Plans (Piggot, 2009),

An appropriate technology case study: Locally manufactured small wind turbines

In 2000 Practical Action contracted Hugh Piggott of Scoraig Wind Electric (Piggott, 2000) to develop

the design manual, The Permanent Magnet Generator (PMG): A manual for manufacturers and developers (Piggott, 2001). With over 20 years of experience at the time in harnessing electricity from the wind and with many self-built designs tested in the field, Hugh Piggott provided a basic design manual

aimed at the local production of PMGs for small wind turbines in developing countries. The manual outlined how to construct low cost axial flux PMGs of nominal power 200W with the use of simple manufacturing techniques and the workshop tools required.

In conjunction with the wind rotor blade construction manual (Sanchez Campos et al, 2001) some of the first small wind turbines constructed with the use of manuals were built and installed in Peru (Ferrer-Martí et al, 2010), later on in Sri Lanka (Dunnet, 1999) and in Nepal (Practical Action, 2006).

Hugh Piggott continued working on the self-built generator and at the same time organised technical seminars, where enthusiasts could meet up and learn how to build a small wind turbine. These sessions evolved into the second design manual How to Build a Wind Turbine: The Axial Flux Windmill Plans (2005).

The design manual contained better designed components, such as the use of neodymium magnets in the generator and the furling tail system but most importantly provided a more comprehensive and detailed text which guided readers through all stages of the

AuthorsK. Latoufis PhD student and Research assistant [email protected]

A. GravasResearch assistant, [email protected]

G. MessinisResearch assistant [email protected]

N. HatziargyriouProfessor [email protected]

National Technical University of Athens (NTUA), Heroon Polytechniou str. 9, Athens, 15773, Greece

+30 210 7713699

Figure 1: 2.4m diameter 850W small wind turbine installed at National Technical University of Athens’ (NTUA) test site (Source: NTUA Electric Energy Systems laboratory)

Locally manufactured open source hardware small wind turbines for rural electrificationKeywords: Small wind turbines; Axial flux generator Open source hardware, Appropriate technology, Local manufacturing, Performance tests

This paper investigates the use of open source hardware small wind turbines for rural electrification purposes. This technology provides the ability to locally manufacture small wind turbines, which enhances socially sustainable and technically reliable village electrification. In this paper, the basic concepts of open source applications and licensing are introduced, followed by a presentation of their recent development into open source hardware applications. As a specific case study, open source hardware small wind turbines are discussed, and the characteristics of the emerging social network which produces this technology are analysed. Finally, this technology is constructed and tested in the Electrical Energy Systems laboratory of the National Technical University of Athens for validating its performance and discussing its suitability in the rural electrification context.

PEER REVIEWED

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the turbine. Routine maintenance can be conducted once a year, yet some small wind turbines of this type have been left unattended for years. Local wind conditions will play a major role in the life of the wind turbine as well as local climate conditions. From the experiences of failures gathered by the global social network of users and manufacturers of these turbines, one of the most common problems is corrosion, and especially of the neodymium magnets in applications close to the sea. Many solutions are implemented, such as galvanizing the magnet rotor disks, using neodymium magnets with epoxy coatings, and using more adhesive resins for the casting of the rotor disks. Specifically, for the small wind turbine tested in NTUA there was no failure recorded for the operation period of 30 months, although it must be noted that the test site was not close to the sea and had a mean wind speed of 3.2m/s.

Conclusions

The results of the tests proved that this small wind turbine design has good performance characteristics and is a robust and cost effective design. Commercial small wind turbines, from established manufacturers, of the same rotor diameter that perform according to the manufacturer’s data sheets, could cost three to four times more than the cost of materials for manufacturing this design, for prices as in Autumn 2010.

The design process closely matches the experimental results, yet it was concluded that there exists a margin in the construction process for some deviations from the design manuals. This can be caused in practice as a result of differences in the materials used or from different levels of construction experience of the producers of the turbine. Yet, these deviations will not affect the performance of the system significantly.

The global network of users, constructors and designers that constitute the open source hardware process described in this article, have developed the specific small wind turbine design to suit applications in different environments, using different manufacturing techniques and materials, depending on local economic, technical and

social conditions. By using communication tools such as Internet forums, by sharing values such as cooperation and driven by the common goal of producing electricity in remote areas, they have managed to make small wind turbine technology a technology-in-use which empowers people with the knowledge of locally producing electricity from the wind.

References

Bartmann D., 2008. Homebrew wind power: A hands on guide to harnessing the wind. First edition. Buckville Publications LLC

Dunnett S., Autumn 1999. Small wind generators for battery charging in Peru and Sri Lanka, Boiling Point, Issue No. 43: Fuel options for household energy

Ferrer-Martí L., Garwood A., Chiroque J., Escobar R., Coello J., Castro M., 2010. A Community Small-Scale Wind Generation Project in Peru, Wind Engineering volume 34, No. 3

Fieldlines., 2013. The Otherpower discussion board (accessed: September 2013). Available from: http://www.fieldlines.com

Hosman N., March 2012, Performance analysis and improvement of a small locally produced wind turbine for developing countries, Faculty of Aerospace Engineering, TU Delft

IEC, 2005. Part 12-1: Power performance measurements of electricity producing wind turbines. International Electrotechnical Commission

Kotsampopoulos P., Messinis G., Gkravas A., Latoufis K., Hatziargyriou N., March 2011. Design, construction, simulation and performance of axial flux small wind turbines, EWEA 2011, Brussels, Belgium

Latoufis K., Messinis G., Kotsampopoulos P., Hatziargyriou N., 2012. Axial flux permanent magnet generator design for low cost manufacturing of small wind turbines, Wind Engineering, Volume 36, No. 4

Mishnaevsky L Jr., Freere P., Sinha R., Acharya P., Shrestha R., Manandhar P., August 2011. Small wind turbines with timber blades for developing countries: Materials choice, development, installation and experiences, Renewable energy, Volume 36, Issue 8

Piggott H., 2000. Windpower: Small is beautiful, Boiling Point, Issue No. 45: Low-cost Electrification for Household Energy

Piggott H., June 2001. The Permanent Magnet Generator (PMG): A manual for manufacturers and developers, Scoraig Wind Electric, ITDG

Piggot H., 2009. A wind turbine recipe book: The axial flux windmill plans, Kindle edition

Practical Action., 2006, Annual highlights 2005-6 (accessed 15 December 2012). Available from: www.practicalaction.org/

Sanchez Campos T., Fernando S., Piggott H., July 2001. Wind rotor blade construction, ITDG

Taverner-wood H., April 2011. Applications of micro wind: How non-accredited turbines can fulfil user requirements, School of Engineering and Electronics, University of Edinburgh

along with some variations described in Homebrew Wind Power (Bartmann, 2008). This wind turbine, which has been in operation for 30 months with no failures and with an annual maintenance break of two days, was constructed by students and used as a prototype small wind turbine to evaluate its performance and validate a basic design from which open source wind turbines could evolve.

Materials and costs

The materials used for construction included wood for the rotor blades and iron, plywood, polyester resin, neodymium magnets, and enamel copper wire for winding. Bolts, screws, nuts and electrical conductors were also required. These materials can be sourced locally with the exception of the neodymium magnets that have to be ordered via the phone or the Internet. The rising cost of these magnets, and some cases of corrosion have led groups and individuals to experiment with ceramic and ferrite magnets.

Wooden blades are preferable to cast glass fiber blades as they are cheaper to make in small quantities and require simpler tools and techniques. The wood required for the blades must be strong, slightly flexible, resistant to weathering and light. Wood types with such characteristics exist in many places of the world and it would be better to find a local variety with these characteristics than to order one from abroad.

Water pipes and steel rope guys are the most common and low cost methods of raising small wind turbines; however these can be difficult to find in some locations. Free standing mounting poles and specifically lattice towers are alternatives. Lattice towers can be locally constructed from iron bars and have widely been used for supporting wind pumping stations. Materials such as bamboo and tree trunks have also been used. The tilt up of the tower is additionally a point of concern as cost increases considerably with the use of cranes. The appropriate sizing of the cable connecting the battery bank to the turbine

is essential in battery based systems as this can affect the overall performance of the turbine. The correctly sized cables provide a good match between the rotor blades and the generator revolutions per minute, particularly in higher wind speeds. This will avoid stalling the blades (Latoufis et al, 2012).

A breakdown of the cost of components (551 Euros) for the 850W 10m/s (rotor diameter 2.4m) small wind turbine constructed at NTUA can be found in Table 1 @HEDON. The total cost of a typical application that produces electricity for lighting and small home appliances such as laptops, mobile phones chargers, radios and a TV set could reach 2150 Euro (Autumn 2010 prices of materials in Greece) including the cost of raising it, the battery system and the cost of the installation.

Manufacturing process

The small wind turbine consists of the rotor blades, the axial flux generator, the alternator mounting frame and the tail and vane (Figure 2).

The basic tools needed for the construction consist of a drill press, an electric arc welder, an angle grinder, a jigsaw, spoke shave, draw knife, compass, verniers caliper, squares, and a soldering iron. Apart from wood working, which requires a basic familiarisation with the tools that can be achieved quickly with the correct guidance, all other techniques used are simple and effective.

The detailed process for the construction of the wind turbine is available @HEDON.

Performance of a locally manufactured small wind turbine under laboratory and outdoor field tests

The 850W generator was placed on a test bench in a laboratory setup (see @HEDON) with the availability of accurate measuring equipment and variable connection possibilities. The generator was initially driven without a load in open

circuit using a variable speed DC motor drive. The induced EMF voltage was recorded and found to be sinusoidal with a 120-degree phase difference and similar root mean square voltages.

Vibrations and noise were minimal and only notable when the generator was connected to a rectifier, which is known to introduce harmonics in the system.

The small wind turbine was then installed at NTUA’s small wind turbine test site for a period of ten months while measuring electrical and meteorological data (Figure 3) as described in the IEC 61400-12-1 Power performance measurements of electricity producing wind turbines (IEC, 2005).

The power curve of the wind turbine and the power coefficient (which is the overall efficiency of the turbine ie. the ratio of power produced by the small wind turbine over the amount of power provided by the wind on the rotor blades) were measured, at a sampling rate of 1Hz (i.e. one sample per second); the power coefficient of 0.3 was measured for the complete system.

The wind turbine reached its nominal power at higher wind speeds than expected and this was due to losses in the grid connection of the wind turbine through a transformer. The passive aerodynamic braking system, the furling tail, was observed to start operating at 11m/s instead of the designed 10m/s, which would be due to a heavier tail and vane. Although the operation of the furling system protects the generator from overheating in high wind speeds, this small deviation will not cause any problems in the operation of the generator since it has been designed to withstand 10% higher currents than the nominal ones.

Long term performance

Locally manufactured small wind turbines of the design described in this article have proven to be robust machines, although not without their failures. Failures will range from insignificant to severe, depending on a variety of factors ranging from the materials used to construct the turbine and frequency of maintenance to the skills of the people constructing

www.HEDON.info/MUXB* Manufacturing guide for the small wind turbine* Acknowledgements

Meet us @HEDON

Figure 3: Meteorological mast: (1) Anemometer, (2) Wind vane, (3) Thermometer, (4) Humidity sensor, (5) Pressure sensor, (6) Lighting rod (Source: NTUA Electric Energy systems laboratory)

Figure 2: Parts of the wind turbine (Source: Piggott, 2009)


GENERALGENERAL

Plain cooked rice Traditional Method Full gas Low gas 50% Full Gas

33% of Low Gas

Water & Rice to Boiling Point 3 min.

Simmering 27 min. 13.5 min. 9 min.

Rice cooked in HRB Full gas HRB

Water & Rice to Boiling Point 5 min.

HRB 45 min.

— Be easy to operate with regards to placing the pots inside

— Be easy to clean— Look nice in the kitchenThe development of village-based cooking clubs will create a platform for introducing the new cooking method to many households at one time, as well as the opportunity to develop nutritious and timesaving recipes.

Thermal insulation

The HRB is insulated with layers of highly reflective foil facing towards the heat source (the cooking pot). For best insulation results, a thin air space (15 mm) should be maintained between layers of foil. The insulation values quoted are based on polyester two-sided reflective foils. Once the contents of the pot begin to boil, it is placed inside the HRB. The air around the pot will heat up and the heat radiated by the pot is reflected by the foil and thus contained.

The thermal insulation value (RC) of the foil varies considerably with differences in air space between it and the sides of the box. Good quality reflective foil with a 15 mm air space on both sides has a value of RC = 0.4 m2 K/W. Using two sheets of foil also affects the thermal insulation value. Two quality reflective foils with 15 mm air gaps on either side increases the value to RC = 2.2 m2 K/W. These values (Nienhuys, 2012d) have been calculated on the basis of the Stefan-Boltzmann constant and the technology is now used in insulation construction (The Engineering Toolbox, 2008).

This high insulation value of 2.2 m2 K/W enables the cooking pot to stay above the 65°C (slow cooking temperature) for several hours; meaning the food inside the cooking pot continues to cook while no additional heat is produced. This saves cooking fuel and controlling time.

The HRB described has outer dimensions of 450 mm x 450 mm x 450mm. This is large enough to contain a six litre pressure cooker and a three litre cooking pot as well as other combinations within the internal space of 350 mm x 350 mm x 400 mm.

Testing and demonstration

The testing for the HRB took place over one week. Rice and a side dish were cooked for 16 trainees, with half the meals cooked using one of the test HRBs while the other half were cooked using traditional methods.

The following HRB designs were tested:(1) Carton HRB made with three layers of

polyethylene (PE) backed reflective foil. (2) Hardboard HRB with three layers of

PE backed reflective foil. (3) Cardboard HRB filled with small

pieces of Expanded Polystyrene (EPS) and PE foam around the cooking pot.

The three HRB designs were tested by measuring the amount of energy required to boil 0.5kg of dry rice with one litre of water. These were then compared with the amount of energy required to cook using the traditional method of cooking on an open pot. This method of cooking was kept consistent for all five trials. The rice was allowed to boil vigorously for three to four minutes before the gas was lowered and the dish was simmered for 27 minutes. It is important to note that more water was used in the traditional method due to the effect of water evaporation when cooking.

Participants took part in a taste session to compare the different cooking methods. They carried this out blind as some felt that the rice would taste differently when not cooked in the traditional way. For the HRB to be successful, this new cooking method would have to produce tasty food. The hardboard HRB gave the best performance. The carton boxes would not be a neat commercial product and the HRB with loose EPS was not practical to work with.

The traditional method took approximately four minutes to reach boiling point and the rice was allowed to boil for three minutes before the temperature was reduced to simmering. The water and rice were allowed to boil for five minutes before being placed in the HRB, as the testing staff believed the rice needed to cook vigorously before putting the entire pot inside the HRB.

The saving of full gas time can be calculated by comparing the time the gas is turned on for the traditional method with that of the HRB (Tables 1 and 2).

Saving of fuel gas time = [(Time for water and rice to boil + Simmer time) – (Time for water and rice to boil in the HRB)] / Simmer time for traditional method.

For a 50% gas reduction, the HRB presents a saving of full gas time of approximately 76%, while a reduction of 33% gas produces a saving of full gas time of 69%. The precise difference between full gas and low gas could not be determined in this simple demonstration, but in both cases the amount of gas saving was between 70% and 75%. The percentage saving of gas will be similar to the savings when firewood and electricity are used to cook. This means that only 25% to 30% of the firewood currently used will be required compared with the traditional cooking when the HRB is used.

The HRB cooking demonstration found that most energy was saved when the washed rice was placed in one litre of cold water before being cooked on full gas and immediately after vigorous boiling, was placed inside the HRB for a minimum of 45 minutes. A wide range of food can be cooked in the HRB such as potatoes, lentils, beans, pasta, and stew meat with similar energy savings. The HRB works well for items which are boiled or steamed; however not for items which are fried.

The two constructions with the three layers of PE-backed reflective foil gave the best results. The hardboard box with the door was the easiest to work with. The three reflective foil HRB resulted in softer and tastier rice.

High altitudes

Since for most food types cooking stops at 60-65°C, the quality of the HRB is determined by the length of time the temperature stays above 65°C (Pressure cooking at high altitudes, 2013). In high mountain areas, the boiling temperature of water becomes lower with increasing altitude. For altitudes above 1500 m, the use of a pressure cooker is highly recommended

84%

In the Himalaya regions, the main household energy consumptions are for food preparation and space heating. At

high altitudes, space heating becomes an increasing fuel drain and this is especially the case in traditional housing with poor thermal insulation (Nienhuys, 2012b; Nienhuys, 2012a; Nienhuys, 2000). In mountainous villages, the cooking stove is often also used as a space heater. At altitudes of 2500m, space heating requires an average of 3 tonnes of firewood per year, which is twice the amount needed for cooking alone. In poorly insulated houses, the stoves need to burn for substantial periods to maintain a healthy room temperature.

Savings can be obtained by thermally insulating houses and by improvements in stove design. Using improved cookstoves and changing the way people cook saves considerable amounts of fuel. However

many prefer to adhere to the traditional methods, which include long cooking times, so fuel savings may not be as significant.

The process of slow cooking inside a thermally insulated box is one solution to this problem. This cooking method has been used for hundreds of years in many countries (Countryfarm Lifestyles, 2008-2013) and with improved insulation technologies and materials, this solution is easily accessible.

Demonstration cooking exercises of local foods (rice and potato-based dishes) were carried out with the use of a pressure cooker and a constructed Heat Retention Box (HRB) (Figure 1). The stove research group determined that the use of the pressure cooker combined with the HRB saved up to 90% of the cooking energy and using the HRB alone saved up to 75%

compared with the traditional cooking methods using firewood, electric or gas stove.

Firewood, kerosene, gas and electricity have different energy values (Biomass Energy Centre, 2013) and various firewood stove designs also have different energy consumptions for the same amount of heat produced (Partnership for Clean Indoor Air, 2006). The percentage of energy savings through the HRB will be the same for all types of equipment.

Good thermal insulation is the key factor for cooking once the pot is removed from a heat source. This paper explains how to make a thermal insulation box for cooking. The HRB must:— Keep food at slow cooking temperature

(>65°C) for over three hours— Have an easy-to-manufacture design

using local materials

Author Sjoerd Nienhuys

Renewable Energy Advisor Hilversum, The Netherlands

+31-35-6232-646 [email protected]

www.nienhuys.info

Figure 1: Heat Retention Box (HRB) test model with magnet door (Source: Sjoerd Nienhuys)

How to make a Heat Retention BoxKeywords: Hay box; Heat retention box; Self-assembly; Cooking club

This article presents a Heat Retention Box (HRB) as a new way of cooking food in Himalayan regions with fuel shortages. Food is heated up using the traditional methods of cooking before being placed within the HRB. The thermal insulation provided by the HRB enables continuous cooking for several hours. Experimental results show that the HRB is able to keep the food above the slow cooking temperature (>65°C) for at least four hours. This article also outlines how the HRB has been promoted to the community through cooking clubs that provide information on how to construct a HRB.

PEER REVIEWED Table 1: The time taken to cook plain rice using the traditional method

Table 2: The time taken to cook plain rice using the HRB


GENERAL

as it further saves energy consumption by 15-20% and it also saves time.

People living at an altitude of 1500m need to consider a 5°C lower boiling temperature for food preparation. When placing the hot pot with food in the HRB, the pot temperature is about 95°C (5°C lower than at sea level) and drops quicker to 65°C.

The HRB for higher altitudes has an improved thermal insulation characteristic of RC = 2.2 m2 K/W. This allows a heavy pot with food, totalling 6-7 kg, to stay warm above 65°C for at least four hours. Temperature drop tests will show that with a larger hot mass inside, the temperature will stay high for longer.

Test results

Detailed calculations on the functioning of the reflective foils with and without PE backing found that the most effective air space between the foils was between 15 mm and 17 mm. The design was changed to include a second air space of 15 mm by increasing the total wall thickness.

The tested HRB with three reflective foils and two air spaces of 15 mm had a total pot weight of 5kg and 7kg respectively. Table 3 (available @HEDON) demonstrates the approximate temperature drops for weight of pot and starting temperature. It is important to note that the results will vary with different quality reflective foils.

The results correctly demonstrated that when the weight of the total cooking pot with food is larger, it retained its heat longer inside the HRB. They also indicated that the food continued to cook in the HRB for at least two to three hours and remained very warm for four to five hours when placed directly from the cooking pot first into the HRB. Most microbes are

destroyed in the beginning stages of cooking when the food is initially heated to boiling temperature. Keeping the food above 60° C avoids any development of salmonella (Low Temperature Cooking, 2007).

Setting up cooking clubs

The HRB is demonstrated to the community through cooking clubs where community members are able to trial the equipment and understand the energy savings before purchasing it. The project lends one unit of equipment for a month or two, after which the club members can buy or return it. Groups of six to eight people are taught how to use the equipment by cooking their own type of traditional meals and are able to sample the dishes afterwards.

The group members are encouraged to compare dishes and recipes cooked using the equipment. The best recipes are compiled into a booklet, which is then supplied along with the HRB or pressure cooker.

The group members have access to designs of the equipment so they are able to construct the technologies themselves or through a local craftsman who can be trained by working with an experienced HRB producer who also supplies the necessary materials.

Conclusion

A HRB works well for food items which are boiled or steamed and is an excellent energy saver for both small and families having 5-7 members or more. For smaller families, the total quantity of food cooked will be much less and some skill needs to be developed to make it equally energy saving, as the heat is retained best when the food mass is large.

References Lacalamita, T, et al., 2013. Slow Cooking Temperatures (accessed June 2013). Available from: http://www.dummies.com/

Nienhuys, S, 2012a. Basics of thermal insulation in high altitude areas of the Himalayas, Technical working paper, number 1 (accessed 17 July 2013). Available from: http://www.nienhuys.info/,

Nienhuys, S, 2012b. House improvement general. Introduction part 1, Applicable for high altitude areas such as the Himalayas of Pakistan, India, Bhutan, Nepal, Afghanistan and Tadjikstan (accessed 17 July 2013). Available from: http://www.nienhuys.info/

Nienhuys, S, 2012c. Improved Cooking stove, ICS, Technical Working Paper – Number 10 (accessed 17 June 2013). Available from: http://www.nienhuys.info/

Nienhuys, S, 2012d. Thermal Insulation Technical Working papers #2 and #3 (accessed June 2013). Available from: http://www.nienhuys.info/

Pressure Cooker Recipes, 2013, Pressure Cooking at high altitudes (accessed August 2013). Available from: http://missvickie.com/

www.HEDON.info/CVXB* A how-to-guide for producing the HRB * Profile of author* Full list of references

Meet us @HEDON

Figure 2: Women in Himalayas eating the rice made with the HRB (Source: Sjoerd Nienhuys)

CALL FOR PAPERS

Boiling Point looks for articles which are written in English, preferably using clear and plain language, and which can be used by other people in their own work. Do not be deterred, however, if you are not used to writing – it is the information that is important – we will review articles, edit them and return them for your approval prior to being published.

Theme articlesEach edition of the journal typically contains 4 to 6 full length theme articles which can include research papers and programme reports that are relevant to the theme topic. We encourage you to submit articles on your work on any of the above-mentioned themes at any time of the year. Each edition also contains a related Toolkit. If you are interested in contributing to these, then please contact us on the email address at the end of this page.

ViewpointsIf you feel you or someone from your organisation should be interviewed on your work in facilitating access to energy for households in developing countries, please contact us. All interviews will be published on the HEDON website and the best will be selected for publication in the Viewpoints section of Boiling Point.

General articlesWe welcome submission of general articles at any time, which can cover any topic. Examples include project/programme updates, technical papers, book/report reviews, and conference and workshop

reports. Please note: technology based articles should be focused on the real life application of proven technologies.

HelplineWould you like advice from experts on an aspect of your work in household energy? Contact us with your questions and we will strive to direct you to those who can help. Questions we feel are relevant to a wider audience are selected for publication in the Helpline section of Boiling Point. In the past, these have included dilemmas regarding marketing, emergency relief and enterprise development.

SponsorBoiling Point reaches over 11,000 readers globally, making it an ideal forum to get information about your project activities out to the worldwide community of practitioners and to showcase your work to potential collaborators and funders. Sponsoring Boiling Point gives your organisation a range of profile benefits; from space in the journal to communicate news, events, logos and website links; to receiving several printed copies to distribute to your colleagues. For more information, visit www.hedon.info/EYQB or send us an email.

Front cover photo competitionHEDON is offering you another fantastic opportunity to get your best image onto the front cover of Boiling Point. We are looking for a full colour photograph for the front cover that illustrates the future themes of Boiling Point. The photo must

be: of good quality format and suitable for high resolution colour printing (minimum resolution of 300 dpi and a high quality file type i.e. not .bmp); sent to us in its original format (not pasted into an MS Word file); credited to the correct person, with a caption if appropriate; owned by the person/organisation entering the competition; and preferably with a central focal point, bold composition and rich colours. The editor’s decision is final and the selected photo will win absolutely nothing, apart from the admiration of thousands of subscribers and of course our thanks.

Guidelines and submission datesWe are accepting articles and front cover photo competition submissions for the issue on ‘Energy Service Delivery Models’, until Friday 28 February 2014 (visit www.hedon.info/PGEP).

Articles can be submitted digitally in a commonly used word processing format using the ‘Article Template’, with the ‘Instructions’ document for guidelines. Articles should be around 2,000 words in length. Illustrations, such as drawings, photographs, graphs and bar charts that are essential, and all references should follow the given guidelines. Articles should also include a 100-200 word summary, a 50 word profile for each author and up to ten keywords that you feel best describe your article. Files can be emailed to the editor at the below listed address. Final selection is based on article quality, originality and relevance.

Thank you for your cooperation, and please do not hesitate to contact us for any clarification.

Regards,The Boiling Point Team

Email: [email protected]

Call for papersBoiling Point forthcoming topics:

— Energy Service Delivery Models — Household Energy Policy — Lighting — Energy in High Cold Regions

Boiling Point is peer reviewed and published quarterly. We are inviting readers to submit articles, papers and news on a rolling basis at any time. So if you feel that you have something to contribute to the wider household energy community on any theme, including the above four, then please read the information below and send us your experiences – HEDON would love to hear from you!


A prActitioner’s journAl on household energy, stoves And poverty reduction

A publication of the

www.hedon.info

The HEDON Household Energy Network is dedicated to improving social, economic and environmental conditions in less developed countries, through promotion of local, national, regional and international initiatives in the household energy sector.

The HEDON Household Energy Network is established in the UK as a charitable limited company registered with the UK Charity Commission. It is managed by five Trustee Directors – Andrew Barnett (The Policy Practice); Dr. Grant Ballard-Tremeer (Eco Ltd); Dr. Stephen Bates (independent); Dick Jones (independent); and Dr. Kavita Rai (IRENA) – and is

coordinated by a team of dedicated volunteers. The network itself is comprised of thousands of active members with diverse backgrounds: practitioners, policymakers, academics, business owners and non-governmental organisations, based across the world. We exchange experiences, learn from one another and create new knowledge.

Our Patrons

HEDON Household Energy Network has the good will and support of two patrons: Archbishop Desmond Tutu of South Africa, and Professor Kirk R. Smith, Professor of Global Environmental Health, at the University of California, Berkeley, USA.

To join us go to www.HEDON.info/registerHEDON Household Energy Network is registered with the UK Charity Commission, charity number 1141286

Our Vision A world where everyone has access to clean and sustainable energy; in fairness, respecting the environment and combating climate change.

Our Mission To inform and empower practitioners in order to unlock barriers to household energy access by: addressing knowledge gaps, facilitating partnerships and fostering information sharing.

What the HEDON Household Energy Network offers:Boiling Point www.HEDON.info/Boiling Point

• 62 issues over the past 32 years

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An interactive web platform offering:

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“As a patron, I believe that HEDON, in its work to address energy and climate improves lives for people living in poverty. I am a supporter of their work and would recommend others to support their endeavours further” Archbishop Desmond Tutu

“HEDON is the oldest international network of organisations promoting clean and efficient household energy sources for improving health and welfare. I have been involved since its inception in the 1980s and it has provided both intellectual support and inspiration in my work to understand the health and climate implications of household combustion” Professor Kirk Smith