This report provides baseline data for the micro-hydro rural electrification intervention TSU MHP implemented by Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) and its subcontractor Entec in Sumatra and Sulawesi.
The analysis relies on approximately 400 household interviews conducted between September and November 2010 by RWI, Entec, and local organizations. Additionally, qualitative interviews with key informants provide for background information.
The Technical Support Unit micro-hydro project (MHP-TSU) that operates under the umbrella of the German-Dutch Energy Partnership Energising Development helps ensuring quality and sustainability of micro-hydro mini-grids built under the so called “Green PNPM” program. The program, which administers money from a World Bank Trust Fund, implements projects for community development.
Communities can apply for funding for self-defined community development projects. While in principle also other projects are possible, a focus is on MHP mini-grids. TSU supports the communities in the application process: villages have to establish own management structures, it has to be verified if sites qualify technically for MHP electrification and, for this purpose, feasibility studies have to be conducted. Main criteria for the feasibility are the distance to the national grid, possible plant capacity and the number of inhabitants. TSU also supervises the implementation of MHP schemes including equipment procurement, civil construction, and construction of transmission and distribution lines as well as the commissioning. In doing so, TSU envisages to build up capacities of PNPM field staff, local MHP hardware providers, and local MHP scheme operators.
The final decision on which sites to be supported is taken every year by PNPM. In 2009, funding was assigned to 26 MHP sites that are all located in Sulawesi. They were under construction at the time of the survey in late 2010. Concerning the decision on 2010 funding, ten sites had already been identified in Sulawesi at that time, while the process was still underway in Sumatra. In West-Sumatra, 35 of the proposed sites had been deemed feasible, out of which 15-20 sites were granted budget in 2010.
Against this background, the present report shows results of a baseline survey conducted in 20 TSU MHP target villages – ten in Sulawesi and ten in Sumatra. The collected data serves the following purposes: First, portray the socio-economic situation with a focus on energy consumption patterns in the project region. Second, provide for baseline data to be used in an ex-post evaluation in 2012. In addition, the households surveyed for this baseline study will serve as a yet non-electrified comparison group for a cross-sectional impact evaluation of villages that already had been electrified in 2008 by EnDev 1. The results of this impact evaluation are presented in a separate report (Impact Report on MHP sites supported by EnDev 1 in Indonesia, May 2011) and article.
The data reveal substantial differences between Sulawesi and Sumatra. Generally, infrastructure in Sulawesi is less developed and the villages are more difficult to access than in Sumatra. In line with this, the annual income per households is 3 times higher in Sumatra than in Sulawesi. Nevertheless, both in Sulawesi and Sumatra, subsistence farming provides the basic livelihood of most households. While more than 90 % of households in both regions pursue agricultural activities, almost 50% of the household members between 14 and 66 years that do not study work as subsistence farmers.
Roughly one third engages in household duties and child care, whereas only 13 % exercises other occupations such as paid farm work (especially Sumatra), public services (especially Sulawesi), or dependent or independent commerce activities.
The main crops in Sulawesi are rice (70%), coffee (52%), banana (42%), cacao (38%), cassava (36%), and sweet potato (21%). In Sumatra the most popular crop is also rice (61%), but followed by the cash crops rubber (52%), coffee (20%), and palm oil (9%). The cultivation of cash crops in Sumatra, obviously, is the major reason for substantially higher incomes than in Sulawesi. The revenues from selling these non-transformed crops amount to more than 50% of the total household income in Sumatra against 2% in Sulawesi.
The transformation of agricultural products is higher in Sulawesi: (87% of households do so, against 53% in Sumatra. Yet, people in Sulawesi transform crops for their own needs. Accordingly, the revenues from selling transformed goods are significantly higher in Sumatra than in Sulawesi. In Sumatra, they amount to approximately 2 Mio IDR (163 EUR) per year whereas they amount to only 0.3 Mio IDR (25 EUR) in Sulawesi. In this regard, the transformation of certain cash crops like coffee and cocoa bears potentials to use electric applications and, thereby, increase the value added in the region.
The non-agricultural sector generally appears to be weak in the regions. In particular in Sulawesi, the potentials to expand production beyond the local demand are limited due to difficult access to markets. Local demand, in turn, can be expected to be low in the light of a dominating agricultural sector, low transit traffic and, consequently, low external cash incomes. The only enterprises in the villages both in Sumatra and Sulawesi are kiosks, carpenters, mills, hullers, and in Sulawesi some weavers. In most cases, though, these businesses do not serve as the primary income source for their owners and are run more on demand basis. Virtually all produced goods are sold and consumed locally.
The most common energy sources both in Sumatra and Sulawesi are kerosene and firewood. Almost all households use them. Whereas kerosene is mostly used for lighting, firewood serves for cooking.
Besides these traditional energy sources, almost 50% of the households already use some electricity source. In Sulawesi, the most common electricity sources are traditional waterwheels, so called kincir, that supply various households in one village with electricity. In Sumatra, the most important sources are individual gensets. Both sources exhibit substantial drawbacks compared to MHP electricity. The kincirs, used by 29% of households in Sulawesi, often only operate a few dim lighting devices and the service provided is mostly poor (voltage fluctuations and generally low voltage levels). The main disadvantage of gensets, mostly used in Sumatra, are high fuel costs. Solar panels also have a low capacity. In some of the villages, even electricity from the national grid (“PLN-grid”) is available. These grid connections that approximately 4% of the households have are normally not official connections but illegal extensions of the nearby grid.
The low quality of some of the existing electricity sources, mainly the kincir, is also reflected in the households’ subjective assessment of electric lighting quality, where only 5% in Sulawesi and 32% in Sumatra are always satisfied with the quality of lighting provided by electric lighting sources. If compared to traditional lighting sources, though, the electric lighting sources are consistently ranked higher.
Also electricity using households still consume high amounts of kerosene and other traditional energy sources, which underpins the observation on the sometimes low quality of these electricity sources. Households with and without electricty spend roughly the same for traditional energy sources. This indicates that the electricity usage does not replace traditional energy usage but rather complements traditional sources. In addition, it might as well reflect that “richer” households are more likely to use electricity. At the same time, these richer households use more energy in general – including traditional sources. To this extent, electricity has replaced traditional energy sources – it is only that the expenditures were higher prior to the connection than those of electricity non-users.
The most common electric appliances are lighting devices, mobile phones, and TV including satellite receivers. Whereas mobile phones are more common in Sumatra, generally information technology like TV, CD and VCD, and radio are slightly more widespread in Sulawesi. Further electric devices are only used sporadically. Irons, for example, are in most cases non-electric. Radios are not widely used and also mostly run on dry cell batteries. In both regions there are some households with rice cooker and magic jars, an electronic appliance that cooks rice and keeps it warm. While rice cookers bears potentials to decrease the fuel wood dependency and related risks and burdens, the capacity of the MHP plants in most cases will not allow for the widespread usage of cookers, which require 500-1000 Watts. This observation might be taken into account for the design of future MHP schemes: On the one hand, the target group could be sensitized for advantages of electric cookers, on the other hand the technical capacities have to be made available.
Even if only 27% of the households have a TV set, the usage of TV is widespread. Those households without TV watch with neighbors or friends. The average time household members watch TV is substantially higher in Sulawesi. Mobiles phones are owned by 35% of the households, whereof 60% charge it at home. The households without electricity have been asked which electronic appliance they would like to buy most in case of electrification. 53% like to buy a TV, followed by lighting devices. Households that already have electricity were asked, which appliances they would like to use, but the capacity of the current electricity source does not allow to. They also give priority to TV, followed by rice cookers and refrigerators.
Generally, there is a high demand for electricity in the surveyed regions: Virtually all households are eager to get a connection to the MHP – including households that already use another electricity source. Only few households in Sulawesi (4%) state that they do not want to get connected, mostly for financial reasons. One household prefers its PLN connection. This clearly reflects the superiority of MHP electricity compared to other electricity sources. The advantages are straightforward: For generator users lower costs are the major advantage; waterwheel and Solar Panel users want higher power electricity.
The maybe most striking result of this baseline study are the high pre-electrification rates in the surveyed villages. This has implications on different levels: From the future MHP operator’s perspective, the high pre-electrification rates have advantages, because future customers already have electric appliances and are generally used to electricity. The implication for the monitoring of the TSU project is that data on electricity usage should be collected also in other target villages of the project that were not included in the survey, since pre-electrification rates might differ there.
Accurate numbers are necessary to report reliable figures to the overall Energizing Development monitoring system. The implication for the impacts to be expected for this intervention is that the electrification “treatment” will be less accentuated for the households already using electricity (around half the population in the surveyed villages). As a matter of course, an electricity connection is a more revolutionizing change for someone who has never used electricity than for someone who has been using an electricity source for years – even if the new source is clearly of higher quality.
Nevertheless, perceptive questions in the baseline survey suggest that people see many benefits in switching from their current electricity sources to the MHP mini-grid.
For the future ex-post evaluation of the EnDev 2 project it is recommended to intensify the examination of productive use activities and the importance that electricity could have to them.
While home businesses and home based appliance usage are covered by the structured questionnaire also used for the present survey, in addition a more qualitative approach could focus on micro-enterprises. In-depth interviews could be conducted to explore why micro-enterprises connect or not and invest in machinery or abstain from doing so.