Energy Needs Assessment and Energy Policy Formulation for Pro-Poor Community

1. Energy Needs Assessment and Energy Policy Formulation for Pro-Poor Community Technical Working Group (TWG) V Meeting Works Progress Semarang, July 10 2011

3. Design of Activities in TWG V

4. Methodology of Study

5. Design of Participatory Rural Appraisal (PRA) • The information will be collected during the FGD and PRA survey (semi-structured interview) based on the following issues for set of guideline questions. • Average daily or monthly income of rural communities, and daily/monthly energy and other needs expanses • Form of energy which is currently used for domestic activities, community services and local entrepreneur, • Renewable energy potentials, accessibility and constraints, • Socio-economy conditions, • The lifestyle, community social characteristics and cultural background, • Willingness and ability to pay by community in terms of energy installation in their household.

6. HOUSEHOLD • To assess the daily/monthly income and expenses. • To get a better insight in current energy related problems. • To calculate the energy need and its consumption (cost) for energy and other needs. • To evaluate the energy priorities for households. • To evaluate socio-economy condition: potentials and limitations. • To formulate the available energy potentials surrounding their village(s) that can be used as alternative energy for household. • To assess the willingness and ability to pay of community for RE installation in household.

7. LOCAL ENTREPRENEURS • To get a better insight in current energy related problems. • To calculate the energy need and its consumption (cost) for energy. • To formulate the energy potentials surrounding their village(s). • To evaluate the priority of energy use in ranking according to the urgency of a problem for local entrepreneurs. • To identify possible economic activities (development) that can be operated if the new energy have been supplied to the sites. • To evaluate the willingness and ability to pay for RE installation in their industries/production.

8. LOCAL STAKEHOLDERS (LOCAL AND REGIONAL GOVERNMENT) • To evaluate the energy problems and energy potential source • To list the available energy policy and program • To evaluate the stakeholder rules in energy/economic program • To evaluate possible financial (credit) scheme for energy installation (if any).

9. FGD (focus group discussion) • The main issues were discussed in this activity was: • energy needs : summary from PRA • energy priorities in community and business opportunities in the village(s) • willingness to pay for energy installation

10. PRA Survey • PRA Survey • Conducted in two different locations of dusun/desa. • Involved on field-survey: in depth interview and stakeholder analysis, sampling to households, local entrepreneurs and stakeholders. • Stakeholders and community representative meeting

11. Sampling of Respondents in PRA Group 1 :  Low income, household, work: farmer/ services Group 2 : Medium income, household, work: farmer/ services with additional income Group 3 : Medium income, household, work: officer (government) Group 4 : Medium income, local entrepreneur in various sectors

12. Location of TWG 4 and 5 Location 2: DusunWirokerten Botokenceng Village Banguntapan District Bantul Regency Yogyakarta Region Location 1: DusunSrumbung Segoroyoso Village Pleret District Bantul Regency Yogyakarta Region

13. Cow-skin crackers industry Cow-skin crackers are still cooked using fire-wood stove. Proposed RE project will be implemented to reduce the use of fire-wood stove.

14. Conventional drying process? Can RE energy give the solution?

15. Potential renewable energy sources: animal dung from chicken, horse and cow husbandries.

17. Energy Use in Community

18. Kerosene used for cooking

19. Comparison of energy use in each cluster of household and entrepreneur

20. Energy Usage Priority: Household

21. Energy Usage Priority: Local Entrepreneurs

22. Willingness to Pay

23. FGD Result: Energy problems Increasing fossil fuel price, i.e., petrol, solar and kerosene, has directly burdened to the community. The energy price increase, the goods also increase. Household must decrease the spending for energy sector, e.g., reducing transportation activities, changing the kerosene to other type of energy for cooking, i.e., firewood and LPG; and energy saving for example limited lighting in household at night. For local entrepreneurs, increasing energy price causes production cost increases. As a result, they must change to other type of energy to reduce the incremental cost.

24. FGD Result: Energy problems Community in study area is still fearful to use LPG due to increasing explosion cases in use of 3kg gas cylinder. It causes the LPG conversion program this village is not totally successful. In addition, the use of LPG for cooking activities is more expensive compared to the energy mix of LPG and firewood. The electricity connected from PLN grid often blackout. It may cause the disturbances in their activities at night and business. As a result, they use the kerosene for lighting when the electricity is blacking out.

25. Needs of energy Proposed Programs/Policies Concept of Energy Program (Policy) Formulation Economic Analysis & Technology Local Wisdom Non & Government& Programs Local Stakeholders Energy Potential Energy Infrastructure

26. Formulation Scheme on Energy Policy Most energy priority or need Energy Need Energy technology ATP WTP Energy program Stakeholders analysis Energy potential/ source Energy policy Local wisdom/culture/ condition Financial scheme & cash flow analysis Action Plan Roadmap Community Participation

27. Alternative Renewable Energy Program • Biogas for households and local entrepreneurs • Saving in cooking and production costs • (side effect) benefit from residual biogas material of fertilizers • Jathropa Stove for households and local entrepreneurs • SHS for house lighting • Saving in electricity

28. Schema of first proposed RE Project-Needs-Potential Cow-skin cracker industry Household – foods cooking Animal manures

29. Scheme of third proposed RE Project-Needs-Potential Cow-skin cracker industry Household – foods cooking Available Unproductive Lands for Jatropha Cultivation

30. Schema of second proposed RE Project-Needs-Potential Household – lighting Adequate solar radiation

31. Price of Proposed Biogas Source: BIRU Program

32. Solar Home System (200W) 1 unit solar panel 50 wp Cable 7 m and jack, 1 unit electric box system (ebs) 200 w, 1 set of electrical installation (35 m wire, fuse, etc.), 4 set led 12 v - 2,5 w 1 unit florescent lamp 220 v - 10 w Price: IDR 5,000,000.00

33. Jatropha Stove

34. Investment cost of Jatropha stove

35. Workshop and Focus Group Discussion on Proposed Energy Programs • Workshop: • Solar panel (SHS) • Biogas • Focus Group Discussion: • Stakeholders • Community (representatives) • Local entrepreneurs

36. Response from Community (Household) on Option of Proposed Energy Programs A. BIOGAS for household and local entrepreneurs. B. Jatropha Stove for cooking (household) C. Solar Home System (SHS) for lighting

37. Reason for choosing the biogas • Household has the energy potential for biogas, i.e., cow (1-4 cow) and chicken (10-30 chicken). • Biogas installation also produces the additional economic values, i.e., organic fertilizer from the biogas. • The energy potential is provided in household and surrounding area. • Biogas installation can be managed (constructed and maintained) easily compared to others RE installation. • Investment cost is not quite expensive. • Operation cost is not high and the maintenance is effortlessness.

38. Some notes from FGD (Community and Local Entrepreneur Response) for RE installations • Biogas • community gives the impressive response for biogas installation, but they need to look at the real example on the success story of biogas directly. • for this installation, the subsidy scheme is preferred. • SHS • The technology is quite complex, they concern in the maintenance. • Jatropha • The supply of Jatropha seed is not adequate in the market.

39. Willingness to Pay • WTP is the maximum amount of money that individual/household states that they are willing to pay for a good/services. • The three methods: • observation in the price that people pay for goods or services in various market/cases. • observation in individual expenditures of money, labor, etc. to obtain the particular goods or services • asking the people directly what they are willing to pay.

40. Willingness to Pay (WTP)

41. Ability to Pay (ATP) for Biogas Some measure of "ability to pay" is typically used for determining the level of community capability to provide their own money to contribute in the program and for estimating the subsidy, grants or loans to be made available to projects. The "ability to pay" analysis is a definition based on the amount that households pay for energy cost in cooking relative to "residual income". Residual income is defined as the amount remaining from household income after payment of housing costs.

42. Equation ability to pay factor = average energy cost paid for cooking ÷ residual income in IDR residual income = household income - home payment – non-cooking utilities – tax (etc.)

44. (1) Percentile Analysis:Sample data from survey of annual residual income and annual cost of energy cost for cooking

45. Percentile computation for annual "cost for cooking" per IDR 100 residual income

46. (2) Equation Design of ATP factor = average ATP – 1.28 Computation Example: Average ATP factor = 61.84 Deviation = 15.30 Design of ATP factor = 0.42

47. Calculation of ATP

48. Stakeholder Analysis Participation and rule of stakeholder involved in the program. SWOT Analysis: Planning to Implementation Evaluation on Project Sustainability

49. Energy Policy Tujuan: Meningkatkan akses energi di masyarakat dengan memanfaatkan potensi energi yang ada disekitarnya. Target: Masyarakat dapat memanfaatkan energi (EBT) dalam aktivitas kehidupan sehari-hari sehingga bisa dapat mengurangi pengeluaran. Government University Local stakeholder Donor LSM Community leader Stakeholders Bank/Financial Inst. Community org. Bentuk (finansial) program: • Program pemerintah • Swadaya masyarakat • Subsidi-Grant & swadaya masyarakat Energy program Community Diagram 1: Keterikatan stakeholder dalam kebijakan/program TOPIK DISKUSI 1: Apakah setuju dengan unsur stakeholder yang terlibat untuk kebijakan/program uang diusulkan?

50. Implementation Policy Program SWOT ANALYSIS Weakness (Constraint) Strength Treat Opportunity