Two Attempts from BSH

1. Two Attempts from BSH “How to create effective markets for low carbon energy solutions that ensure equitable and widespread access to energy services in the Global South?” Samuel Shiroff London, June, 2013

2. Agenda • BSH Overview • Protos: An interesting case study • HealthyHoods: A tool in an improving arsenal

3. The BSH shareholders 2011 | 2

4. ■about70 companies in 49 countries ■Global sales and customer service network ■13 brands, 42 factories, about 45,000 employees ■ around9.7 bill. Euro sales in 2011 Brands

5. Agenda • BSH Overview • Protos: An interesting case study • HealthyHoods: A tool in an improving arsenal

6. 3000 Average level of small particles µg/m3 240 EU annual standard 40 µg/m3 30 Berlin City Center Bangkok Roadside Hut with open fire Traditional Cooking on Open Fires Air pollution

7. Facts and figures:Power range: 2.0 – 2.5 kW Usage: 2-4 liters oil per week for a family of 4-5 → 100 – 200 liters per yearFuel: All plant oils, also used oils Efficiency: 45 – 58 % Emissions: Ten times lower than with keroseneCO2-balance: NeutralReason for introduction of Protos :- Powerful stove- Usage of renewable energies- Environmentally friendly- Healthy for the user- Local economic added value & job creation Protos – The World‘s First Plant Oil Stove

8. Protos – Product Development $250 2005 2004 $60 ~$50 $75 2007 2006 2008-2010

9. “The Cooking-fuel Pyramid” current customers Developing World LPG Users Kerosene and Monetized Bio-mass Non-monetized Bio-mass users Establishing the Target Market Target market: who and where are our users? Initial Market Focus Determined via field tests with ~1000 families in: Test Start • Guatemala 1999 • Philippines 2003 • Tanzania 2005 • India 2007  • Indonesia 2007 

10. Business Model: Cost of the Cooker • Production Cost ~ $50 (includes tank) • Sales Cost ~ $20 • Cost gap ~ $30 per unit Question: To whom does the cooker bring added value?

11. Cost Gap Protos: Innovative Business Models Services Warm Food, Safe Fuel, Faster, Low Cost Individuals paying for: Kerosene Charcoal Wood Health / MDGs Environmental Payment CERs / VERs Reduce Costs: Scale, Technical Development Reduced Deforestation CO2 Neutral Fuel Maternal Health Child Health H Grants Payment Value Who cares Reputation / Brand WHO / UN Companies IGOs/ NGOs Governments Political General Public Foundations Operational Development Orgs CDM

12. Three Possible Business Models • Builder Model • Cooker Price ~$50 ExW + • Warranty 1-year ~$?? + • Service ~$?? + • Builder Subsidy - $xx • Total User Cost: <55 Cooker + Transport + Training • Customers • Government • Plantations • Charitable Organizations • CSR • CO2 Model • Cooker Price ~$50 ExW+ • Warranty 7-year ~$?? + • Service ~$?? + • CO2 Project Cost $xx • CO2 Revenue -$yy • Total User Cost: <<55 Cooker + Transport + Training • Customers • CO2 Project Developers • CSR • Energy Companies • Traditional • Cooker Price ~$50 ExW • Warranty Deducted • Spare Parts Optional % of purchase • Total User Cost: $55++++ Cooker + Transport + Training + Profit margin + Warranty • Customers • Businesses in regions where user can pay overlaps

13. Project Conclusion: It didn’t work • The Technology never outcompeted Kerosene • Plant oil supply chain was difficult and controversial • Carbon market collapse made primary financing model impossible • Adequate economies of scale could not be achieved • Decision 2010: Cease production and make patent available to all • www.plantoilcooker.org

14. Agenda • BSH Overview • Protos: An interesting case study • HealthyHoods: A tool in an improving arsenal

15. http://www.youtube.com/watch?v=y0HXGqHvbUM

16. Project Overview • Concept: • Using BSH core competence in co-operation of an NGO (Practical Action) to create solutions for global health issue • Design & Optimize smoke hoods for developing countries and establish construction guidelines: • Taking into consideration available materials and manufacturing capacity • Variable depending on family size and needs • For a variety of regions and heating/cooking needs • Using local manufacturers • Distribute information on website and with partners to leverage impact • Generate media awareness • Partners: • Universität der Bundeswehr München: Institute for Thermodynamics • Practical Action: UK-based non-profit organization with extensive experience

17. Project Overview Goals • Design smoke hoods • Establish design guidelines • Create a functional internet-accessible overview • Generate awareness of the problem and potential donations for the solution • Establish scalable and sustainable business model. • Make a Positive Difference and reinforce BSH‘s reputation “Do good things and talk about them”

18. Project Organization BSH € + Mngmt DEG €200k Bundeswehr Uni CFD Practical Action UK & Nepal Gareto Training & Mngmt Local Coop Financing Manufacturer Users Users Users Users Users

19. Implementation model Awareness raising Social marketing for demand generation Establishment of revolving fund and capacity building Capacity building of local fabricator Quality Assurance Technology fabrication at local level

20. Impacts to date • 82% indoor smoke reduction • 30% less firewood used and drudgery reduction of women, and reduction in Co2 emission • >800 households reached  Significant reduction of smoke related diseases • Expansion efforts underway

21. Key Economic Challenges • Core funding for revolving funds • Investor-friendly business model • Bundling with improved cookstoves

22. Thank you • www.healthysmookehoods.org