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EnDev Report on Impacts

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Editorial note

 

Access to energy is a basic requirement for achieving the Millennium Development Goals. In developing countries, the vital role of modern energy services is all too clear, especially for low-income groups. Access to energy for cooking and heating is essential to meet vital needs. Economic growth is inhibited, and many economic activities are simply not possible if energy is unavailable. Energy also makes mechanised agricultural production possible, which results in higher crop yields. Electricity and modern fuels enable poor households to engage in income generating activities. Electric light enables households to work during the evening hours or pursue social activities and other activities, such as studying. Electricity powers machines that increase productive outputs, and it is essential for telecommunications, ICT services and healthcare.

 

The Dutch-German partnership to implement the Energising Development programme reflects the strong will of both the Dutch and German governments to successfully promote access to energy, which is seen as crucial for development. Its goal is to achieve sustainable access to modern energy services for five million people in developing countries. The relationship between energy and development was already acknowledged by the international development community at the 2000 World Summit on Sustainable Development (WSSD) in Johannesburg. As a follow-up to the WSSD, international conferences on the subject were hosted by both the Netherlands (Energy for Development 2007) and Germany (Bonn Renewables 2004).


Energising Development combines Dutch and German expertise in the field of energy. It is contributing to the Dutch target of providing 10 million people with access by 2015, the year in which the international community has pledged to achieve the Millennium Development Goals. As a partnership between the Dutch and German governments, Energising Development is being implemented by the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) in cooperation with the Dutch agency for sustainability and innovation, SenterNovem.

 

In this report GTZ and SenterNovem summarise the impacts of projects implemented in the first phase of Energising Development. The report is aimed at the general public. It describes the successes achieved by the various measures, as well as the problems encountered and the challenges which persist.

 

We wish you an interesting read and look forward to hearing your reactions.


Executive summary

From 2005 to 2008, the Dutch-German partnership, Energising Development (EnDev), undertook 24 activities in 21 different countries. By connecting households to either a central grid or a mini grid, and by promoting technologies such as improved stoves or solar home systems (SHS), in December 2008, 4.43 million people had gained access to electricity or been provided with improved cooking technologies. And all this has been achieved at a cost efficiency of around ten Euros per person.

Energy is a key factor for sustainable development and poverty reduction. It is now generally accepted that access to energy and the achievement of the Millennium Development Goals (MDGs) are linked. Around 2.5 billion people worldwide still rely on the traditional use of biomass energy for cooking, baking and heating. Cooking usually involves a 3-stone-fire, a method that wastes around 90% of the biomass energy generated. At the same time, the open fires emit a lot of smoke, which is hazardous to health. Indoor air pollution is estimated to be responsible for about 1.5 million deaths every year.

At the household level, electrification has contributed to improved living standards, while at the level of small businesses, it has significantly boosted economic growth and poverty reduction. The provision of electricity to more than 750 schools has enabled teachers to use overhead projectors, computers, televisions, and audio and video cassette recorders, and has thus enhanced the quality of the education system. EnDev has also provided power to around 140 health centres using grid-connections or solar energy systems. This has improved the quality of medical treatment, with such benefits as vaccine refrigeration, improved lighting for treatment, operation rooms and better availability of hot water to sterilise instruments.

At the household level, EnDev has contributed to the MDGs by disseminating the technology for more than 775,000 well-designed energy-efficient stoves in 15 different countries. Use of the improved cooking stoves reduces household fuel consumption by 40–80%, with most assessments showing a saving of around 50%. Almost all beneficiaries of improved cooking stoves reported a significant reduction in the time they spend collecting firewood. The stoves emit very little smoke and have therefore raised the quality of air indoors. At the same time, safety and hygiene in kitchens have also improved. Furthermore, children in the beneficiary households have been relieved of some of their time-consuming housework (cooking, fuel collection), so the dispersal of energy-efficient stoves means children have more time to attend school and to study after school. More than 3,000 stoves have also been distributed to schools.

Introduction

 

The aim of the Dutch-German partnership, Energising Development (EnDev), is to provide five million people in developing countries with sustainable access to modern energy services by 2015. During the first phase of Energising Development (2005–2009) the target was to reach 3.1 million people. The activities of EnDev focus on providing access to modern and clean energy services to poor households, small enterprises and social institutions in rural areas. The energy services include:

1.      Energy for lighting and household appliances
Worldwide, especially in rural areas, more than two billion people have no access to electricity. This means they have inadequate lighting, few labour-saving devices, and limited use of telecommunications. Artificial lighting is perhaps the most immediately beneficial form of modern energy use. Energising Development is working to establish economically sustainable electricity generation and distribution schemes for rural communities. It is doing this by extending power grids, installing micro-hydropower plants and distributing solar home systems.

2.      Energy for cooking
Particularly in rural areas, around 2.5 billion people around the world still rely on the traditional use of biomass energy for cooking, baking and heating. Most cooking is usually done on a 3-stone-fire, a method that wastes around 90% of the biomass energy. The open fire also causes high smoke emissions, which are hazardous to health. Indoor air pollution is estimated to be responsible for the death of about 1.5 million people every year. Energising Development is cooperating with GTZ’s HERA-household energy programme to establish self-sustaining markets for the production and sale of more efficient (improved) cooking stoves. These efficient and less smoke emitting stoves are adopted to suit purchasing power of the targeted households.

3.      Energy for social infrastructure
Electricity supplies are being established for schools, clinics, hospitals and community centres. This is used, for example, to provide lighting in schools or operating theatres, for refrigeration of medicines, and, where appropriate, to harness thermal energy for cooking school meals.

4.      'Energy for production and income generation'
Many productive activities require some form of energy, whether it is for driving motors, or for drying and packaging agricultural products. By generating additional income for a community, productive use is probably the most important contributor to poverty alleviation.

 

In 2008, the EnDev partnership was running 24 activities in 21 different countries. These projects are carried out in close collaboration with partner ministries in the respective countries, local non-governmental organisations and the private sector. By connecting households to either a central grid or a mini grid, and by promoting technologies such as improved stoves or solar home systems (SHS), by December 2008

  • 4.43 million people had gained access to electricity or been provided with improved cooking technologies
  • In social infrastructure institutions (e.g. schools, hospitals, community centres etc.), 560,000 people had benefited from improved uses of energy for cooking, and 290,000 had benefited from electricity-services or other modern energy sources.
  • 20,000 people had been provided with a modern form of energy for productive use (e.g. bakeries, restaurants).

All this has been achieved at a cost efficiency of around ten Euros (EUR) per person.

To improve energy use in cooking, EnDev cooperates closely with GTZ’s household energy programme, HERA, thereby benefiting from GTZ’s 25 years of experience in household energy. All impact studies on energy for cooking were developed and carried out with substantial input from HERA.

Energy is a key factor for sustainable development and poverty reduction. It is now generally accepted that there is a link between access to energy and the achievement of the Millennium

 

Development Goals (MDGs). This report is intended to summarise the results of impact studies and field observations from ongoing EnDev country projects. It will compare general theoretical assumptions about the links between energy and poverty with actual project experiences. The aim is to paint a picture of the benefits of providing modern energy services to households, social institutions, and small enterprises.

 

As this first review was conducted at an early project stage, the number of quantitative impact studies is so far limited to eight studies in seven countries. Many impacts are expected to occur in the longer term and could therefore not yet be included. Besides the existing studies, this report draws on information from field observations and non-systematic qualitative interviews with partner organisations and EnDev project staff members. While it therefore does not claim to be universally representative, it does provide an overview of general tendencies in the projects’ contribution to the MDGs. A systematic approach to measuring the impacts of energy projects has been developed for use in the second phase of Energising Development, starting in 2009.

 

In the following chapter on impacts we try to demonstrate how access to energy in general, and the EnDev activities in particular, are contributing to the achievement of the MDGs. Although access to energy is not, in itself, one of these goals, it is recognised that access to energy is a precondition for achieving them. Using the impact studies implemented as part of the EnDev projects, we explain the relationship between energy and the first seven MDGs.


 

Impacts

Poverty and economic development

 

MDG 1: ERADICATE EXTREME POVERTY & HUNGER

 

According to World Bank measurements, 1.4 billion people live below the poverty line of US-Dollars (USD) 1.25 per day. The first UN Millennium Development Goal (MDG) is to halve this number and “achieve full and productive employment and decent work for all”. Energy services may contribute to poverty reduction by increasing production capacities and creating jobs. Electricity enables the poor to engage in new fields of productive activity and provides the basis for them to benefit from (tele)communication services. Artificial light allows people to work in the evening and rest for certain periods during the day when temperatures are high, thus making work more productive. On another level, modern energy services can decrease energy expenditures. Most of energy expenses for poor people go on cooking. They pay a much higher price for cooking fuels, such as charcoal or firewood, than do higher income groups who use more efficient fuels such as gas or electricity. Similarly, in the long-run kerosene and batteries cost more than electricity supply. Moreover, the poor not only face the financial burden of paying for energy resources, they also spend a significant amount of their time collecting firewood – time that could otherwise be used for productive purposes.

 

Access to adequate, efficient energy services contributes to food security and therefore helps to eradicate global hunger. MDG 1 is to halve, by 2015, the number of people worldwide who do not have enough to eat (currently 963 million).95% of all meals must be processed, conserved and cooked, which requires heat from various fuels. If fuel is unavailable or only available at a high cost, foods that need longer cooking times may sometimes be improperly cooked or even abandoned. Therefore, efficient cooking stoves and modern fuels contribute to eradicating hunger.

 

Improved cooking stoves bring savings of 40–80% in household fuel consumption.

  EnDev has been promoting the achievement of the MDG 1 targets by disseminating the technology for improved cooking stoves and supporting rural electrification measures. The various programmes have had impacts on households and individual beneficiaries as well as at the producer level. Improved cooking stoves bring savings of 40–80% in household fuel consumption. Most assessments put the savings at around 50%. Although almost all the beneficiaries of the improved stoves reported a significant reduction in the time they spend collecting firewood, there is too little information to assess how they use the extra time they have gained. Time savings can result in increased agricultural productivity and thereby contribute to a more secure food supply and income generation. However, figures are so far only available for Malawi. There, in Mulanje District, 34.3% of the beneficiaries spend their additional time on farming activities, and 8.4% on small-scale businesses. EnDev projects have observed that – depending on fuel resources – savings in fuel consumption also reduce households’ financial outlays. Households with an efficient cooking stove spend less on firewood than those without. Numbers vary from EUR 4 per month in Uganda to EUR 6 per week in Peru, depending on living standards and the proportion of people who buy their firewood (instead of collecting it for themselves). Data from Mulanje District in Malawi indicate that most of this money is then used for household items or food. In line with EnDev’s and HERA’s strong market-oriented approach, the producers, installers and marketers of the stoves are all trained locally to serve the growing demand. This contributes to job creation and income generation for the local population. Although in some places the trainees had already previously been involved in stove production, these producers nevertheless indicated that they would hire additional labour and thus also contribute to job creation. Overall, stove building can be said to be a good business. Some producers have become highly successful and can now support themselves with their income from selling stoves. In Kenya, stove producers earn EUR 100–300 per month. However, in most cases stove building remains just one of various sources of income that contribute to the producers’ household budgets.

 

Four out of five electrified households have switched completely from traditional to modern, electric lighting sources.

 

Electricity from solar home systems and micro-hydro plants are usually cheaper than batteries and kerosene in the long run. An ex-ante impact assessment was carried out in Rwanda, in which the target region of a micro-hydro project was surveyed at an early stage, alongside a group of four comparable villages that had already been electrified. This allowed a cross-sectional comparison. The greatest improvement observed at the household level was in lighting. Four out of five electrified households had switched completely from traditional to modern, electric lighting sources. They benefit from (I) greater convenience, (II) better quality of light (electrified households consume 350 times more lumens than non electrified ones), (III) less indoor smoke and (IV) lower costs (e.g. 40% savings if kerosene is substituted by incandescent light bulbs and even 85% if substituted by compact fluorescent bulbs).

 

Put briefly, at the household level the main contribution of electrification is to improve living standards, although it does not necessarily decrease poverty in economic terms. For small businesses, electrification makes a significant contribution to economic growth and poverty reduction. It is very rare for new income generating activities to arise as a consequence of a new electricity supply. Exceptions to this have been seen in Indonesia, for example, where some of the households that gained new connections through EnDev activities occasionally started offering services to their neighbours. For instance, one woman owns a battery charger and offers a charging service, while others can offer electric coconut rasping if greater quantities of food have to be prepared. The study in Rwanda shows that, without explicit interventions from outside, no substantial productive uses of electricity emerge. Among the electrified households in the control villages, only 7% actually started to practise new activities that depended on their electricity supply, such as trading or welding.

 

Solar home systems help to attract new and possibly better off customers in rural markets and workshops. With access to electricity, businesses can diversify the service they offer and extend their working hours into the evening.

 

Uganda'– A stove rockets Uganda

The stove component in Uganda’s Promotion of Renewable Energies and Energy Efficiency Programme is one of EnDev’s most successful stove programmes in terms of numbers built. Using the efficient Rocket Lorena stove, a family can save 3.1 kilogrammes of firewood each day, which adds up to 1.13 tonnes annually. A microeconomic analysis carried out among individual households confirmed the financial impact that this has at the household level. The table below presents the main results.