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Clean Cooking Fuels Business Models: Lessons from Distributed Electrification?

Clean Cooking Fuels Business Models: Lessons from Distributed Electrification?. Hisham Zerriffi Liu Institute for Global Issues IAEE Pre-Conference Workshop on Clean Cooking Fuels, Istanbul, Turkey 6/16/2008. Distributed Rural Electrification. Rural populations: Low income

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Clean Cooking Fuels Business Models: Lessons from Distributed Electrification?

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  1. Clean Cooking Fuels Business Models:Lessons from Distributed Electrification? Hisham Zerriffi Liu Institute for Global Issues IAEE Pre-Conference Workshop on Clean Cooking Fuels, Istanbul, Turkey 6/16/2008

  2. Distributed Rural Electrification • Rural populations: • Low income • Remote and Dispersed • Low consumption • Grid extension expensive • Often low resources and managerial capacity • Distributed generation technologies: • Scalable • Small networks or individual installations • Range of possible actors and models International Association of Energy Economics, Istanbul, Turkey (June 2008)

  3. State of Research • Technology Specific Analyses (Allderdice and Rogers 2000, van Campen, Guidi et al. 2000; Li, Xing et al. 2001) • Micro-level Project Reports (Green, Wilson et al. 2001; Santos and Zilles 2001; Stroup 2005) • Business Success Stories (ESMAP 2001) • Common Characteristics: • Ad-hoc • Limited to specific technology, region, outcome, end-use, etc. • Don’t treat institutional issues systematically (Hurst 1990; Erickson and Chapman 1995; Allderdice and Rogers 2000; Martinot, Chaurey et al. 2002; Etcheverry 2003; Fishbein 2003) International Association of Energy Economics, Istanbul, Turkey (June 2008)

  4. Study Framework International Association of Energy Economics, Istanbul, Turkey (June 2008)

  5. Variation in Case Characteristics International Association of Energy Economics, Istanbul, Turkey (June 2008)

  6. Lesson I: Observations Are Not Analysis • Need to move beyond anecdotal evidence • CCF Implications: • Continued case study research required • Systematic study across cases required International Association of Energy Economics, Istanbul, Turkey (June 2008)

  7. Lesson II: Free Lunches Are Not Sustainable • Need to have some level of cost-recovery and financial sustainability. • CCF Implications: • Capital cost subsidies should be market enhancing rather than market destroying • Necessary to have “buy-in” • Consumption subsidies should be avoided when possible International Association of Energy Economics, Istanbul, Turkey (June 2008)

  8. Lesson III: Electrons Do Not Equal Development • Focus on how electrification fits into larger development goals. • Renewables and conventional generation sources should compete equally to meet rural development needs. • CCF Implications: • Need mix of technologies suited to improving local conditions (e.g. biogas, LPG, improved stoves) • Need to assess synergies between household cooking fuels and community or productive needs International Association of Energy Economics, Istanbul, Turkey (June 2008)

  9. Lesson IV: Think Globally, Act Locally • Rural electrification is an important country-wide and global objective • Often best achieved through local means. • CCF Implications: • Implementation dependent upon local conditions (e.g. resource availability, incomes) • Requires strong central support from governments and industry International Association of Energy Economics, Istanbul, Turkey (June 2008)

  10. Lesson V: Unbias the Social Contract • Provision of services should be based on performance, not size. • New institutional mechanisms need to be created to include local actors • CCF Implications: • Involvement of private sector • Involvement of local public sector, entrepreneurs and other actors International Association of Energy Economics, Istanbul, Turkey (June 2008)

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