Impact Report on Micro Hydro Power (MHP) Sites - supported by EnDev I in Indonesia (May 2011)

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Overview - Executive Summary

This report assesses the impacts of the rural electrification intervention Micro Hydro Power Project (MHPP) implemented by the Government of Indonesia and Gesellschaft fur Internationale Zusammenarbeit (GIZ). MHPP supported between 2006 and 2009 the implementation of 96 micro hydro power (MHP) schemes in Sumatra and Sulawesi. These activities were funded as part of the first phase of the German-Dutch Energy Partnership Energising Development (EnDev), an output oriented program that aims at providing modern energy to 6.1 million people in 21 countries. The objective of this study is to examine the effective electricity usage of households that have connected to an MHP, i.e. what those households do with electricity and to what extent this changes the households’ life.


For this purpose, 413 households that are connected to an MHP have been interviewed between September and November 2010 by RWI, the subcontractor Entec that carries out the implementation of the project, and local organizations. The household interviews are based on a structured questionnaire that covers virtually all socio-economic living conditions of the household and its members with a particular focus on energy usage. Additionally, qualitative interviews with key informants and village chiefs provide for background information. Out of 96 villages that have been electrified in total by MHPP, 20 were selected by the project for the impact evaluation. These 20 villages were electrified between 2006 and 2009.

The main challenge of any impact assessment is the identification of a valid reference scenario to which the evaluator can compare the electrified households to obtain an estimation for the impacts.
A valid reference scenario is one that simulates the situation of the electrified households if they had not been electrified. For this purpose, we compare the MHPP-electrified households (EnDev 1 households in the following) to comparable households in villages that will be electrified by ongoing micro-hydro electrification interventions in the near future (EnDev 2 households in the following).
The basic assumption of this approach is that the yet non-electrified EnDev 2 households are similar to the EnDev 1 households before they got electrified.
It turned out during the survey, though, that the EnDev 2 villages already exhibit a considerable share of pre-electrified households (approximately 50%). Among the EnDev 1 households, in contrast, only few households had been pre-electrified before getting the MHP-connection. Thereby, the pre-electrification rates in EnDev 2 villages violate the comparability assumption that is required to obtain a reasonable impact assessment. To respond to this, we can only take the non-electrified part of households form the EnDev 2 villages as a reference. In doing so, it has to be taken into account that these households have not been assigned to being non-electrified by chance. For example, poorer households are much less likely to buy a genset or a solar home system. More generally, one might refer to their status as disadvantaged (be it for financial, regional, or political reasons).
By identifying a corresponding subgroup of disadvantaged households among EnDev 1 households, we can at least perform an impact assessment for this subgroup. For the group of advantaged households we have no realistic simulation of their before situation, because among the EnDev 2 households the advantaged households are already using electricity. A comparison of advantaged EnDev 1 households with the pre-electrified EnDev 2 households only provides the lower boundary of the true impacts.
Generally, all MHP sites visited in EnDev 1 villages were found to be in operation. In few cases the service has been temporarily interrupted somewhere in the recent past, but all households interviewed are normally served with electricity from the MHP and had done so in the month prior to the interview. Virtually all households covered by the MHP mini-grids are connected indicating that the needs of the households are met. The MHP electrification enables a variety of services and activities, especially through a distinct increase in appliance usage. The households operate primarily lighting devices, but also TV sets and other information and entertainment devices like CD or VCD player or charge mobile phones. Almost half of the households use electric irons in Sumatra, whereas in Sulawesi only 6% use them. In Sumatra, more than half of the households use rice cookers.
Generally, the number of electronic appliances is substantially higher in Sumatra than in Sulawesi.
This might be due to the fact that households in Sumatra’s target regions are wealthier than the target region in Sulawesi, but also due to notably higher available MHP capacities in Sumatra compared to the MHP schemes in Sulawesi. While the available capacity per household is at 145 W in Sulawesi, it is at 245 W in Sumatra.

The most important non-electric energy sources are kerosene and firewood. Virtually all EnDev 1 households use firewood for cooking. Yet, the considerable take-up of rice cookers indicates that some impacts on the level of cooking fuel usage can be expected – unlike experiences from rural Africa, where electricity is never used for cooking purposes. Disadvantaged EnDev 1 households use on average 5% less firewood than their non-electrified EnDev 2 counterparts. Among advantaged households the reduction is even roughly 15%. This implies rather a reduction in work load and exposure to smoke than in costs, as most of the surveyed households collect firewood and do not buy it.

Almost all households in Sumatra and Sulawesi use kerosene for lighting (Sumatra 98%; Sulawesi 89%) and/or candles and torches. This indicates that, although all households use electric lighting, traditional lighting sources are not completely replaced. Many households use kerosene lanterns in times of blackouts. This might also be an indication for the reliability of the electricity from the MHP and highlights further saving potentials for the households if they had a stable electricity supply. This fact is furthermore substantiated by the households assessment of the service quality provided by the MHP. 67% of the MHP users wish to have an improvement in the electricity supply, which mostly refers to a more reliable electricity supply (53% in Sumatra and 34% in Sulawesi). Asked for problems with the MHP mini-grid, some households complain about voltage fluctuations, by which 27% of the households state that some equipment has been damaged.
Assessing the consumption in lighting hours, we observe a 55% increase among disadvantaged EnDev 1 households in Sumatra if compared to their non-electrified counterparts. The amount of consumed lumen hours even rises by more than 20 times. In Sulawesi, the lighting hours have quadruplicated and lumen hours increased by almost 70 times. Also if we compare the advantaged EnDev 1 households to the electricity using EnDev 2 households, they consume distinctly more lighting hours and lumen hours. This latter result is in line with expectation, because the quality of electricity provision will clearly improve for the pre-electrified EnDev 2 households as soon as they get connected to the MHP mini-grid.
A further indication for the improvement in electricity supply that EnDev 2 households will experience is the higher usage of traditional lighting devices among them. Although also the advantaged EnDev 1 households are still using kerosene and candles, they do so to a lesser extent.
On average, EnDev 1 households light 3 rooms with their electric lighting devices and 1.6 rooms with the traditional lighting. This also illustrates the higher convenience of the lighting through MHP compared to electricity using EnDev 2 households, who only light 2.3 rooms with their electric devices. It can furthermore be seen that the MHP using EnDev 1 households are much more satisfied if asked directly how satisfied they are with their electric lighting sources than the electricity using people in EnDev 2 households.

The potentials to transform agricultural products by means of electricity is largely untapped. There are hardly any differences observable between EnDev 1 and EnDev 2 households and villages. Both in EnDev 1 and EnDev 2 villages most of the crop transformation is exercised by hand or with a manual tool. Only for grinding and hulling processes there are some households that employ motorized, mostly diesel driven appliances. Only in three EnDev 1 villages, rice hullers and threshers exist that are connected to the MHP-turbine in the power house.

Productive electricity usage is rather limited in the target region. In general, only few enterprises exist in the villages. Among the existing firms mainly shops get connected and use electricity for lighting and in some cases also for the operation of TVs and fridges. While some of the few tailors connect to the MHP, carpenters normally do not connect. This is mainly due to the fact that many of them are primarily subsistence farmers and only take up their carpentry work in case of demand.
Accordingly, they do not have a fixed workshop and work with mobile generators at the place they are needed. On the supply side, the operation time of the MHPs hampers productive electricity usage. Most of the MHP only operate after nightfall (and fulltime only on Sundays and Fridays).
Hence, the firms are not able to use electricity at daytime.

The comparison of energy expenditures between the disadvantaged EnDev 1 households and the non-electrified EnDev 2 households shows no clear reduction in Sumatra, where energy expenditures decrease by 3% only. In Sulawesi, the reduction is more accentuated at 35%. Assessing the possible reduction in expenditures for advantaged EnDev 2 households shows the enormous potential induced by a switch from pre-electrification sources to MHP electricity: Above all, the high reductions for generators users are striking. The EnDev 2 households pay 30% more for energy in Sumatra and 15% more in Sulawesi than comparable EnDev 1 households.

One part of the questionnaire was designed to examine if the daily routine of household members is affected by the availability of electricity. Persons living in electrified households on average are longer awake than persons in non-electrified households. The study time of children, though, is not higher among households with electricity; neither total study time nor study time after nightfall.
According to open interviews with teachers, none of the schools in EnDev 1 villages offers evening courses or other activities after nightfall. As most of the MHPs do not operate during daytime, an electricity connection is often not attractive for schools. If schools are connected at all, electricity is normally only used for sound systems, which are used for gymnastics courses.
Improved access to information could be one major impact of electrification. In fact, especially the ownership and usage of mobile phones is substantially higher among EnDev 1 households than in EnDev 2 villages. Likewise, more EnDev 1 households possess TV sets and electrified households spend on average up to 90 minutes of their daily time on watching TV. The preferred TV programs in EnDev 1 households for fathers are news and sports (mostly boxing) – both in Sulawesi and Sumatra.
Women like to watch soap operas, but also news. 81 % of households name TV as their major source of information. Only 9% state that they principally get news from friends or neighbours. Even among those households without TV at home 34% get their information mainly from TV, 33% from neighbours and friends.
Besides the partly severe reliability problems, the high connection rates and the strong usage of appliances indicates that considerable impacts on the life of the beneficiaries can be expected in the long run: modernization effects due to television, improved access to information through television and mobile phones, convenience, fuel and time savings, as well as improved air quality due to electric lighting and rice cookers. Income generating activities are also possible, although on the level of enterprises take up so far is modest.
The potential of rice cooker usage in Sulawesi, though, could be further exploited. Future research could follow up on these first results and examine the reasons for the usage and non-usage of rice cookers among the target households. Besides insufficient capacity provision per household, financial obstacles or a lack of awareness may be driving factors.

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