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Sustainable Energy OptionsAfrican Case Examples of What Works &
Possible Interventions for Parliaments
Opposite ends of Spectrum: Small scale and improved biomass cookstove example from Kenya (perceived as an access option to more efficient option) & more advanced large-scale cogeneration experience in Mauritius
Brief Discussion of Case Studies: Key achievements and results
Policy lessons learned: Could provide basis for Parliament’s interventions.
Improved Efficient Charcoal Kenya Ceramic Jiko (KCJ)
Adaptation of a clay-line bucket stove design from Thailand
Reduces charcoal consumption by 30-50%
In use in over 80% of urban households in Kenya (16% of rural homes) - cumulative production now over 15 million
Fully self-sustaining using locally produced materials and skills – generated jobs & new enterprises
KCJ in use in Uganda, Tanzania, Malawi, Ethiopia, Sudan, Zambia, Rwanda, Burundi & Senegal & being introduced in Burkina Faso, Mali, Niger, Ghana and Madagascar
KCJ – Policy/Strategy Elements Good Data Base: Ministry of Energy/Beijer
Institute Survey, NGOs and research institutes
Micro-level de-regulation: Government allowed informal sector space/freedom and did not attempt to over-regulate. Eased up on taxes and licenses
Provided Minimum Infrastructure: A simple shed and basic sewage amenities. Access to electricity & public lighting would transform the KCJ industry.
Training & Adaptation Research Support: Most of required technologies in public domain with proven experiences in Asia and Latin America. Modest training and research support to adapt technologies to local conditions is all that is needed.
Policy Lessons LearnedCould Provide Basis for Interventions by
Parliament
Importance of Small-Scale/Informal Manufacturing/Assembly Sector: Can account for up 30-40% of jobs. In absence of formal sector employment growth, often only major source of jobs for rapidly growing pool of unemployed youth. Less troublesome than informal trading sector. Resilient sector which relies on local demand – can survive political instability, economic downturns
Micro-Deregulation: Avoid over-regulation. Need protection from sometimes overzealous/capricious city employees. Can be brought into tax net with simple one-time annual estimated turnover tax.
Secure location & basic amenities is often sufficient: Official site, shed and basic sewage plus access to electricity is often all that is needed.
Where Micro-Deregulation Has Worked
Nepal: A robust small hydro/micro-hydro local industry that has survived instability and civil war
Thousands of micro-hydro installations: Provide shaft power for grinding grain during day and electricity for lighting during the night.
Micro-Deregulation of micro-hydro industry: Below a certain threshold (up to 1MW), require minimum licensing, can set own tariff that is negotiated with users.
Now grown to major sector with a micro & small hydro capacity (including units under construction) of close to 100MW
Cogeneration in Sugar Industry Most sugar industries in eastern and southern
Africa currently practicing co-generation for own use (using bagasse – a waste byproduct) but very limited power exports to grid
Sugar industry directly or indirectly impact on 4-7 million people in Western parts of Kenya
Sugar mills found in most Africa countries (Uganda, Tanzania, Sudan, South Africa, Swaziland and many West African countries)
What works in sugar industry can often be replicated in other agro-industries (agriculture & agro-industries can account for over 50% of a typical sub-Saharan Africa country’s GDP)
Cogeneration in Sugar IndustrySugar prices in the region facing
long-term decline (not withstanding recent increase in prices arising from greater interest in ethanol as replacement for increasingly costly oil) – cogeneration attractive as it offers alternative revenue stream
In Mauritius, power sales revenue for sugar millers recently exceeded that from sugar
Cogeneration in Mauritius Model Example for Regional Replication
Successful in sale of power to the grid
Accounts for close to 40% of a 725MW national generation capacity (of which 25% bagasse)
Began with smaller installations (1.5MW - 5MW, now installing 70MW plants)
Others
Sugar Industry
Power Generation – Mauritius 2004
Policy Measures Installed Capacity (MW)
GWh generated
Year Total B&C Total B&C %
1979 Prior to Sugar Sector Reform 159 27 355 - -
1985 Sugar Sector Action Plan 226 44 392 103 26.3
1988 Sugar Industry Efficiency Act 252 42 549 106 19.3
1991 Bagasse Energy Development Programme
294 42 738 124 16.8
1997 Blue Print on the Centralisation of Cane Milling Activities
370 53 1252 148 11.8
2001 Sugar Sector Strategic Plan 660 246 1657 711 43
2006 Multi-Annual Adaptation Strategy for Sugar Sector
725 242 1923 725 38
2015 Target to be reached - 354 3015 1100 56
Policy Measures for Promoting CogenerationCogeneration in Mauritius
Sugar Sector Reform initiatives & Bagasse Energy
Year Policy initiatives Emphasis on
1985 Sugar Sector Action Plan
Bagasse energy policy evoked
1988 Sugar Industry Efficiency Act
-Tax free revenue from sales of bagasse and electricity
-Export duty rebate on bagasse savings for firm power production
-Capital allowance on investment in bagasse energy
1991Bagasse Energy Development Programme
-Diversify energy base
-Reduce reliance on imported fuel
-Modernise sugar factories
-Enhanced environmental benefits
Cogeneration in Mauritius
Sugar Sector Reform initiatives & Bagasse Energy
Year Policy initiatives Emphasis on
1997
Blue Print on the Centralisation of Cane Milling
Activities
Facilitate closure of small mills with concurrent increase in capacities and investment in bagasse energy
2001 Sugar Sector Strategic Plan
-Enhance energy efficiency in milling
-Decrease number and increase capacity of mills
-Favour investment in cogeneration units
2005
Roadmap for the Mauritius Sugarcane Industry for the 21st Century
-Reduction in the number of mills to 6 with a cogeneration plant annexed to each plant
Cogeneration in Mauritius
Energy PricingPower mode Power
PlantPrice – Rs (us
¢)/kWhYear Characteristics
Intermittent - 0.16 (0.6) 1982 Price frozen since 1982
Continuous Medine 0.55 (1.9) 1982 No change in price since 1982 –no changes brought to the plant
Continuous 6 PPs 1.05 (3.7) 1997 44% of kWh price indexed to changes in oil price and the other 56% is fixed
1.40 (4.9) 2000
Firm FUEL coal - 1.63 (5.7)
bag. - 1.56 (5.5)
1985 Invested in new equipment
Indexed to coal price
Firm DRBC coal - 1.53 (5.4)
bag. - 1.46 (5.1)
1998 Invested in second hand equipment
Indexed to coal price
Firm CTBV both - 1.72 (6.0) 2000 Indexed to coal price, cost of living in Mauritius, foreign exchange rate fluctuations
Cogeneration in Mauritius
Cogeneration Feed-In Tariffs in Mauritius
0
1
2
3
4
5
6
7
1982 1982 1985 1997 1998 2000 2000
Year
Price (US ¢)
Revenue Sharing Share Ownership Of Cogen Plants
Firm Corporate sector 51% Strategic Partner 27% SIT (Small planters/workers) 14% State Investment Corporation 8%
Continuous Corporate sector 80% SIT (Sugar Investment Trust) 20%
Equitable sharing of ownership of and revenue from cogeneration ensures even smallest low-income farmer gets a portion of revenue
In turn, leads to exceptionally strong & consistent policy support
Key Policy Lessons & Possible Interventions by Parliament
OK to start small (Mauritius started with 1 to 2 MW units) which allows a learning experience and sorting out the kinks. Can set an initial target of up to 5% installed capacity. Higher prices can be justified on basis of importance of diversity, elimination of transmission costs & increased through rural electrification – over time prices can come down with the right incentives
Easier to convince Governments/utilities to act. Thereafter, it is possible to expand exponential and initiate large initiatives.
Feed-in tariff is key in promoting co-generation as it provides a strong signal to private sector and financing institutions
Not wise to leave it only to Regulators. Parliament can play an important role.
An important addition to feed-in tariff is a standard “Power Purchase Agreement (PPA)” between agro-industry and power utility. Simplifies negotiations (which can take as long as 7-10years) and removes a major barrier to co-generation investments.
Revenue sharing mechanism which ensures that large majority of population saw tangible benefits was key to maintain policy support.