cooking for life 2014 overview - wlpga · agenda –part two 12.45 –14.00 lunch part two...
TRANSCRIPT
Cooking For LifeThe Future of LPG Demand in Africa
Michael Kelly, Deputy Managing Director, WLPGAMaputo, July 2017
Agenda – Part Two
12.45 – 14.00 Lunch
Part Two – Cooking For Life
14.00 – 14.30 Introduction to WLPGA Cooking For Life programme
14.30 – 15.00 The Proposition for LPG
15.00- 15.30 Breaking down the entry barriers to LPG
15.30 – 15.45 Coffee break
15.45 – 16.15 Lessons from Other Countries
16.15 – 16.45 Panel Discussion on the Opportunities & Challenges forMozambique
16.45 – 17.00 Summary, Conclusions and Future Action
This session will build on the morning’s discussions toexplore what are the key policy challenges to growingthe LPG industry in Mozambique and how these canbest be addressed using examples from othercountries
Overview of Part Two – C4L workshop
• Underscore the benefits of switching to LPG from traditional fuels
• Inform stakeholders about Cooking For Life and some of the global initiatives that have been successful, and could conceivably be replicated, in Mozambique
• Secure common agreement with all key stakeholders to develop action plans and a timetable to implement a series of improvements
Objectives of Part Two – C4L workshop
Energy poverty is a reality for billions every day
Our cities are becoming unbearable due to outdoor pollution
Our homes are not much better
Optimism“hopefulness and confidence
about the future”
Agenda
• The WLPGA
• Cooking For Life
• LPG Industry Overview
• Future demand in Africa
• Conclusions
Who Are We?
Member companies Countries
ProductionShipping &
tradingStorage
Distribution and retail
Service
Serving the full LPG value chain
A Powerful Industry Association
Leveraging International Organizations
Women in LPG (WINLPG)
“Most LPG consumers are women. Many women make and manage the purchasing decision and it is largely women who
use the product. Within the industry itself there are few women, not only at executive level, but at all levels
Energia, WLPGA Industry Council, October 2014
National Industry Associations
national / regional associations
Spending annually
Many are facing the same issues...
What you get back
• Unique access to the network including the associations
• Access to member stakeholders e.g. OEM’s (vehicle and other)
• Access to privileged, member-only data
• Possibility to leverage WLPGA research in your studies
• Consistent communications e.g. Exceptional Energy
• Direct in-country support e.g. participation at Parliamentary briefings etc.
• Support to annual event
• Etc.
Agenda
• The WLPGA
• Cooking For Life
• LPG Industry Overview
• Future demand in Africa
• Conclusions
Cooking for Life: The Vision
COOKING FOR LIFE, a campaign of the WLPGA, aims to facilitate the transition of
people
from cooking with traditional fuels as well as other dirty and dangerous fuels to cleaner-burning LPG by 2030.
Cooking For Life: The Problem
19
Health Impacts
4.3 million people die prematurely every year from exposure to indoor air pollution
Indoor Air Pollution from cooking kills more than Malaria, HIV and TB combined
Cooking For Life: The Problem
20
Environmental Impacts:
• Cooking with LPG instead of wood combats Climate Change and deforestation
• Switching from harvested wood to LPG reduces net carbon emissions by 67%
• LPG produces virtually no black carbon (BC) or soot (particulate matter, PM)
• The introduction of LPG into a community almost always has a positive impact on the quality of life for women
Why LPG?
• Portable
• Bottles can be can be stored indefinitely
• Easily transported
• Minimal investment in infrastructure
• Used virtually anywhere -- from urban centres to remote regions
• Flexibility in applications
When and where costly, grid-based energy services are
unavailable
Cooking For Life: The Target
Source: http://www-wds.worldbank.org
20 countries
represent 2.3
billion people who
lack access to
modern fuels
Cooking for Life
will be active in
countries that
have populations
in need,
supporting
governments and
WLPGA members
India
Population 1.2 billion
GDP $ 2.6 Trillion
Economic growth 7% pa
Among the world top 5 LPG users
Consuming 20 million MT annually
Increase of 6% from 2014
Consumption grown from 15 million MT in 2012
Produces just over 10 MT
India
0 5 10 15 20 25 30
India
Indonesia
Peru
Bangladesh
South Africa
Myanmar
Colombia
Nigeria
Tanzania
Kenya
Mozambique
Uganda
Millions of metric tons of LPG
Residential / Commercial Demand for LPG
2030
2016
2013
India has the highest domestic LPG consumption among the countries in which WLPGA does advocacy , and second largest in the world
Source IHS
India
Four million cylinders are delivered daily
50% + total demand imported
Demand estimated to increase to
38.8MMT by 2021
Year Demand Projections (MMT)
2016-17 21.2
2017-18 23.9
2018-19 26
2019-20 28
2020-21 30
2021-22 31.8
2022-23 32.8
2023-24 33.6
2024-25 34.5
2025-26 35.3
2026-27 36.2
2027-28 37.1
2028-29 38
2029-30 38.8
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
11,00011,778
12,526
14,04115,069 15,369
16,366
18,01919,132
Co
nsu
mp
tio
n 0
00
t
Year
Indian LPG consumption
India – What Worked
What worked:
• Strong support from the highest levels of government
• Three innovative programmes
– PaHal cash transfer programme.
– Pradhan Mantri Ujjwala Yojana (PMUY)
– Give It Up! Campaign launched in April 2015
• Coordinated execution by national PSUs
India - PaHal
Direct Benefit Transfer for LPG (DBTL)
Consumers get cylinders at market price and receive subsidy directly into their bank accounts
Launched November 2014
176 million joined the programme
Over 420 INR (6.5 billion USD) transferred directly to consumers
Commercial sales increased by 39.3% April 2015 – March 2016
India - Ujjwala.
Launched May 2016
Goal to provide 50 million LPG connections to BPL families over three years
Against initial target of 15 million connections, already achieved 16 million in nine months
Increased coverage to 72% may reach 85% by 2019
Women of BPL families are given a free connection then purchase the stove and refill
•
Indonesia
• Population 250 million
• Kerosene to LPG substitution programme
• Converted 50 million households across 396 cities
• Saving government $14.6 billion in subsidies
12451500 1583
42634422
5080 4979
60666400
2007 2008 2009 2010 2011 2012 2013 2014 2015
Co
nu
mp
tio
n 0
00
t
Year
Indonesian LPG Consumption
Indonesia
What Worked:
• Strong support for programme from senior government officials
• Large amounts of investment in infrastructure
• Innovative programmes:
– Small 3kg cylinders
– Kits of cylinders, stoves and regulators given away
– Very strong end user training programmes
LPG is the energy of choice for 95% of Brazilian
homes
33 million cylinders are delivered per month,
door to door
Government subsidized LPG in initial stages as
a “social fuel”
Industry largely deregulated and dynamic
Brazil
Ghana Population 25.9 million
2015 consumption 280,000 MT (16% increase on 2014)
Per capita consumption 9.45, kg
Potential LPG household cooking market size could double within 5 years as a result of national initiatives, and could continue to grow by about 20% every 5 years thereafter.
The projected increase would mean that about 16 million Ghanaian people (approximately 40% of all households) could be using LPG by 2030.
LPG market growth will require major improvements to the existing LPG supply chain, including storage capacity, filling, distribution and retailing, and the number of safe cylinders in circulation.
Source GLPGP
Nigeria
Population of 173 million
Consumption 400,000 MT in 2015 (33% increase on 2014)
Over 40% of domestic consumption in 2015 was imported
Very low Per capita consumption of less than 2.5kg
Production been steadily increasing - 2,405,000 MT but largely exported
Expects that with Government intervention with regards to policies which would aid investment and current initiatives, Nigeria should be consuming about 5 million MT by 2026 (10 year forecast) with LPG as the major fuel for cooking
Do not expect that the Government intervention would come very fast but gradually with regards to policies that would aid investment despite the ongoing huge investments by sector Stakeholders
Committee on the Expansion of Domestic LPG in Nigeria headed by the Vice President plans to convert 4 million households within 2 years, 10 million households over 5 years, 21 million households over 15 years
Bangladesh
Population of 168 million, 34 million households
Consumption grown from 50,000 MT in 2005 to 140,000 MT in 2015
A 37% increase 2014-2015 figures
Production 17,000 MT in 2015
Domestic is 67%
Predicting 1 million MT by 2020 domestic and transport
Constraints: Lack of infrastructure and limited draft for vessels
WLPGA event drew over 2,000 in March
Bangladesh
Source Laugfs
Agenda
• The WLPGA
• Cooking For Life
• LPG Industry Overview
• Future demand in Africa
• Conclusions
Iranian export potential bringing more Arabian Gulf LPG to Asia…
Panama Canal expansion brings US Gulf LPG to Asia…
The LPG industry continues to be characterised by three enduring and
strengthening trends – strong production, matched by solid demand and sustained lower
international prices.
Three trends
• Global production reached over 292mt/yr in 2015, a 4% rise from 2014
• Global consumption grew by 3.7 % to over 284 mt/yr
• Prices remain historically low but this could change…
What grows demand?
1. Clear government policyInitiatives driven by the senior leadershipInvestment in needed infrastructure
2. Tangible benefits to end usersSaved money and time Improved health & increased status
3. Strong and effective industry implementationProvide safe, dependable energy sourceFollow industry best practices
4. Population growth & increased incomeAsia and Africa are critical
The critical role of government
“Appropriate laws and regulations, adequately enforced, are the single most critical factor in whether widespread access to, and use of, LPG by a country’s households and businesses can be achieved in the near and medium term and sustained for the long term.”
WLPGA Guidelines for the Development of Sustainable LPG Markets
Where will future demand come from?
Agenda
• The WLPGA
• Cooking For Life
• LPG Industry Overview
• Future demand in Africa
• Conclusions
Where is future demand?
• African GDP growing by c. 5% since
economic crisis
• Up by a factor of 6 by 2050
• Population to exceed that of China by 2025
and greater than China EU and USA by
2050
• GDP per capita expected to double by 2050
• Grid-based energy will not keep up
• Ingredients for LPG growth
Africa
LPG consumption in Africa
• 4.2% growth per year since 2003
• 11kg per capita per year average
consumption in Africa
• The demand is concentrated on the
Northern border of the Mediterranean sea
(55kg/cap/y) compared with Sub-Saharan
(2.3kg/cap/y)
• But growth is not even by country or by
end-use
5465
60 51
47
Average 2.3 kg/cap/yr
Average 55 kg/cap/yr
Copyright © WLPGA 2015. All rights reserved
Africa is dominated by domestic demand
87.6%
1.4%
5.8%4.3%
0.6%0.2%
Domestic Agricultural
Industrial Transport
Refining Chemical
African LPG consumption by sector 2014
45.5% 1.6%
11.4%
9.7%
6.7%
25.1%
Domestic Agricultural
Industrial Transport
Refining Chemical
Global LPG consumption by sector 2014
Copyright © WLPGA 2015. All rights reserved
And penetration is uneven
Nigeria and South Africa stand outWhere is Mozambique?
Copyright © WLPGA 2015. All rights reserved
African Demand ProjectionActual 2007 … Actual 2010 … Actual 2013 … Actual 2016 … Projection 2020 … … Projection 2030
Kenya 74,017 63,779 59,626 197,649 288,780 402,936
Tanzania 8,019 21,484 33,250 52,737 99,735 321,852
Uganda 7,273 7,838 10,345 13,836 32,376 104,481
Zambia 2,071 1,139 2,736 4,112 9,622 42,385
Rwanda 1,500 2,850 4,300 9,660 40,777
Côte d’Ivoire 101,862 129,127 170,941 268,903 342,418 468,454
Senegal 120,656 114,419 103,207 122,450 132,544 161,570
Benin 9,428 11,785 14,350 15,565 19,820 63,962
Burkina Faso 20,168 28,865 51,269 74,537 130,366 189,104
Togo 2,879 4,164 10,132 14,352 21,103 37,565
Source Oryx Energies
+570%
+860%
+900%
+1,400%
+1,300%
+174%
+56%
+345%
+268%
+270%
What is the potential for Mozambique?
How can we help Mozambique?
• Industry is growing strongly but still
concentrated in Maputo
• Most consumption is domestic,
primarily for cooking
• Poised for strong growth in the coming
years
• Business model needs to be refined
There is plenty of opportunity for
growth – WLPGA can help!
Case Study - HopetounHopetoun is a fast-developing country in South East Asia with a population of around 100m.
Most of the population of Hopetoun has relied on traditional fuels, such as wood and charcoal, astheir primary cooking fuel but the government wants to introduce LPG into the sector.
They have an ambitious plan to transition half the population away from traditional fuels over asix-year period to combat the issue of deforestation in the country.
Recent market research confirms that the disposable income of their target audience for thiscampaign is limited and the government is concerned that they will not be able to afford LPGwithout some form of subsidy programme.
The government do not have a budget for supporting this programme and have called a meetingwith the LPG Association to discuss a way forward.____________________________________________________________________________
Discuss how LPG might be introduced into Hopetoun to meet the governments objectives
Want to know more about LPG opportunities?
Join us from October 3rd - 5th
in Marrakech