Discussion » E-Discussion #1 - Rural electrification using Telecom-Energy Business Models: Choice between Mini-Grid and Energy Services Solutions
E-Discussion #1 - Rural electrification using Telecom-Energy Business Models: Choice between Mini-Grid and Energy Services Solutions
Setting-up a mini/micro-grid or providing energy services to communities is often a question to be addressed by entrepreneurs looking forward implementing a Telecom-Energy decentralized energy supply business model. There is no right or wrong answer to this question, rather a choice to be made for one or another, or a combination of both, depending on multiple factors such as distance, customer base or payment technologies to only cite a few.
This e-discussion facilitated by Mohua Mukherjee will address this question based on practitioners' experiences and insights on what are the factors that could influence this choice.
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As a former telecom person (Sprint, Hughes, Citizens Utilities), I would like the to know if any study explores how many cell-towers have fiber optic connectivity, especially in rural areas, country by country, region by region. I would like to know what the lifecycle costs of fiber deployment to a cell tower are compared to grid-extensions. I expect such costs to be much lower for fiber deployment especially when operating costs are included, which would include transmission losses and electricity theft.
If fiber optic connectivity exists to cell towers, then the 4G/BWA or equivalent can bring broadband connectivity to the region even as the cell towers are hubs for solar generation and micro-grids. My view is: fiber optic deployment should be viewed along with micro-grid deployments for aggregate economics analysis. This bridges two distinct infrastructure industries, and thus is likely a wholly new way of looking at networks.
Mohua's focus on business models is right - the discussions about emissions' warming impact and public policy (Rio+ 20 and equivalent, for instance) have served their purpose. We are at the next phase of hard-nosed business economics.
I would like to hear more about what energy sources are being used for mini-grids in this sector in different parts of the world -- e.g. diesel oil generation, renewables, natural gas, other --- and what are the key considerations for choice of fuel and technologies? Thank you.
Growth of societies and communities based on oil/ petroleum products has been tremendous.
Electricity generation, transportation, agriculture and food have huge dependence on petroleum products like petrol, diesel, LPG, CNG.
Of course, this has helped to develop mammoth power plants, huge cities, food industries and so on..
In this race rural socities have suffered - especially in developing economies/ countries. Rural micro econmics as well their basic needs have been neglected. This huge population is deprived off electricity and derived benefits of electricity. These communities need energy for basic needs like milling, farming, clothing apart from education and health.
Technical development and deployment of alternate energy sources like solar, wind, bio-gas, waste-mass should be helpful in setting up mini power plants and mini-grids for rural communities. I believe the initiative of rural electrification by setting up mini-grids using such mini power plants will be economical. The model will be most successful with available energy sources locally rather than importing.
Thanks for opening this interesting and important discussion.
Hello everyone. Welcome to the discussion, and many thanks to those who have started us off -- Mahesh, Elaine and Chandrakant
Through our discussions and exchanges here, we seek to grow a community of practice on rural electrification, consisting of highly experienced members bringing different perspectives and lessons learned in connection with this activity. Who are we? and whom are we still looking for? So far, some of us are investors/social entrepreneurs, some are financiers, some are technology developers, some are micro and mini-grid operators, some represent the cellular telephone operator community, some are technical and IT specialists working on innovations to reduce transactions costs, some are from commercial banks, some from bilateral development aid agencies, some from regional development banks, some from multilateral banks, some from the "private sector arms" of those banks, some are from private foundations interested in social impact investing, some are coordinating large scale "multiple pilot projects" on behalf of others, some are interested in legal and contractual aspects of micro-grids, some are interested in regulatory aspects, and some represent the policy-maker's perspective.
We hope that this excellent mix of diverse focus and wide-ranging interests will help us identify exciting opportunities and innovative solutions to the challenge of ruralelectrification that has brought us all together.
We would love to hear from all of you, and look forward to an active and engaged discussion. If you know others who are interested in our community, please encourage them to join or refer them to Yann Tanvez (ytanvez@worldbank.org). Today, we are excited to launch our first e-discussion and would like to request you to share your thoughts on the following topic:
Rural electrification is only a tool for achieving a larger objective: ultimately we are trying to support the rural community to engage in productive uses of electricity to increase their incomes and to improve their overall quality of life
In most places rural incomes are too low to afford to buy the appliances that run on electricity, such as fans, TVs, irrigation pumps, milling and grinding machines, refrigerators, etc. How do we accompany the rural customers as they climb the energy ladder?
Would it be better to work instead on access to delivery of services from these appliances, through some sort of rental or leasing arrangement, that is immediately affordable to low income customers? So they would rent charged lights, or charged fans, or TVs, through a monthly subscription, or come to a central location to use a milling machine belonging to an entrepreneur, and pay per use?
Or, should we continue to focus on building access to electricity, e.g. through micro-grids and mini-grids, or even grid connection, and let the customers use the electricity initially only for light-bulbs and mobile charging, until they can afford to buy other appliances in future and enjoy the productive uses? These are two different development models. Are there nuances to these models or hybrids of these models?
What are your views on this? For those who have first-hand experience with customers of micro and mini-grids, please tell us whether the electricity is mainly used for lighting, in limited quantities related to affordability, or whether the other appliances start to appear relatively quickly? Please also share any other technical or non-technical issues that affect consumer demand. (Please be sure to tell us in which country, and where, your mini-grid experience is located).
For those with experience in delivery of energy services (derived demand for electricity) and productive uses of energy, please share your thoughts and insights with us.
We look forward to hearing from you and discussing this issue over the next 3 weeks. Thanks!
Could we please hear from some mini-grid experts? And do you have information on what your customers use the electricity for? are there productive uses that have emerged after electricity access? any evidence of daytime load, or is it simply expenditure switching, from kerosene lights to electric lights?
Please share your thoughts with us about mini-grids and micro-grids and whether these give rise to productive uses, and under what conditions. Thanks!
We should also remember that in many parts of the world the early days of telephony developed in remote / rural areas by virtue of the phone companies following the power companies rather than the other way round. There is every potential for this to be replicated in areas where there is no existing network coverage. The Telco's are always seeking to enlarge their subscriber base, our market survey has revealed a surprisingly high capacity for rural communities to pay for electricty, the wealth generation that electrification creates will attract the network operators to tap into this previously ignored customer base as well.
Apollo Solar provides technical solutions in the form of the power electronics for conditioning, control, and monitoring of PV systems that provide electrification where grid power is either absent or unreliable. In most instances the economic models for the deployment of the systems and the Apollo product solutions comes are based on NGO and Government funding. The business opportunity for ESCOs is valid, with the understand that the ROI requires quantification of overall local and regional economic improvements rather than simply of the infusion of investor capital.
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Daniel TwoEagles--thanks for your important point about needing to include quantification of overall local and regional economic improvements as part of the return on investment (instead of simply limiting it to the financial return on investor capital). We are aware that Social Impact Investors are precisely interested in capturing these social and environmental returns in addition to their financial return (which has to be positive as well of course--they are in it to make money, but their objective is also to create impact). We are keen to hear how people like you, who are thinking about this, may have come up with ideas on how to systematically measure such improvements. There is a real need for a standardized methodology to measure and track social and environmental benefits from using renewable energy solutions, so that such benefits can become a routine part of the "claims" and the "arguments" for investing in such projects. Please share your thoughts with us.
Eventually the goal is to take a large cluster of small community power projects, maybe across different geographical zones or even in different countries, and to be able to seek funding for that bundle from a social impact investor whose unit of account could start with e.g. $5 million. He would have to clearly understand the benefits (financial returns as well as non-financial returns) that he is expecting for making available his $5m. For this we need to have a fairly clear and non-controversial way to define these other benefits.
Discussion » E-Discussion #1 - Rural electrification using Telecom-Energy Business Models: Choice between Mini-Grid and Energy Services Solutions
E-Discussion #1 - Rural electrification using Telecom-Energy Business Models: Choice between Mini-Grid and Energy Services Solutions
Setting-up a mini/micro-grid or providing energy services to communities is often a question to be addressed by entrepreneurs looking forward implementing a Telecom-Energy decentralized energy supply business model. There is no right or wrong answer to this question, rather a choice to be made for one or another, or a combination of both, depending on multiple factors such as distance, customer base or payment technologies to only cite a few.
This e-discussion facilitated by Mohua Mukherjee will address this question based on practitioners' experiences and insights on what are the factors that could influence this choice.
As a former telecom person (Sprint, Hughes, Citizens Utilities), I would like the to know if any study explores how many cell-towers have fiber optic connectivity, especially in rural areas, country by country, region by region. I would like to know what the lifecycle costs of fiber deployment to a cell tower are compared to grid-extensions. I expect such costs to be much lower for fiber deployment especially when operating costs are included, which would include transmission losses and electricity theft.
If fiber optic connectivity exists to cell towers, then the 4G/BWA or equivalent can bring broadband connectivity to the region even as the cell towers are hubs for solar generation and micro-grids. My view is: fiber optic deployment should be viewed along with micro-grid deployments for aggregate economics analysis. This bridges two distinct infrastructure industries, and thus is likely a wholly new way of looking at networks.
Mohua's focus on business models is right - the discussions about emissions' warming impact and public policy (Rio+ 20 and equivalent, for instance) have served their purpose. We are at the next phase of hard-nosed business economics.
I would like to hear more about what energy sources are being used for mini-grids in this sector in different parts of the world -- e.g. diesel oil generation, renewables, natural gas, other --- and what are the key considerations for choice of fuel and technologies? Thank you.
Growth of societies and communities based on oil/ petroleum products has been tremendous.
Electricity generation, transportation, agriculture and food have huge dependence on petroleum products like petrol, diesel, LPG, CNG.
Of course, this has helped to develop mammoth power plants, huge cities, food industries and so on..
In this race rural socities have suffered - especially in developing economies/ countries. Rural micro econmics as well their basic needs have been neglected. This huge population is deprived off electricity and derived benefits of electricity. These communities need energy for basic needs like milling, farming, clothing apart from education and health.
Technical development and deployment of alternate energy sources like solar, wind, bio-gas, waste-mass should be helpful in setting up mini power plants and mini-grids for rural communities. I believe the initiative of rural electrification by setting up mini-grids using such mini power plants will be economical. The model will be most successful with available energy sources locally rather than importing.
Thanks for opening this interesting and important discussion.
Hello everyone. Welcome to the discussion, and many thanks to those who have started us off -- Mahesh, Elaine and Chandrakant
Through our discussions and exchanges here, we seek to grow a community of practice on rural electrification, consisting of highly experienced members bringing different perspectives and lessons learned in connection with this activity. Who are we? and whom are we still looking for? So far, some of us are investors/social entrepreneurs, some are financiers, some are technology developers, some are micro and mini-grid operators, some represent the cellular telephone operator community, some are technical and IT specialists working on innovations to reduce transactions costs, some are from commercial banks, some from bilateral development aid agencies, some from regional development banks, some from multilateral banks, some from the "private sector arms" of those banks, some are from private foundations interested in social impact investing, some are coordinating large scale "multiple pilot projects" on behalf of others, some are interested in legal and contractual aspects of micro-grids, some are interested in regulatory aspects,
and some represent the policy-maker's perspective.
We hope that this excellent mix of diverse focus and wide-ranging interests will help us identify
exciting opportunities and innovative solutions to the challenge of ruralelectrification that has brought us all together.
We would love to hear from all of you, and look forward to an active and engaged discussion. If you know others who are interested in our community, please encourage them to join or refer them to Yann Tanvez (ytanvez@worldbank.org). Today, we are excited to launch our first
e-discussion and would like to request you to share your thoughts on the
following topic:
Rural electrification is only a tool for achieving a larger objective:
ultimately we are trying to support the rural community to engage in productive
uses of electricity to increase their incomes and to improve their overall
quality of life
In most places rural incomes are too low to afford to buy the appliances that run on
electricity, such as fans, TVs, irrigation pumps, milling and grinding
machines, refrigerators, etc. How do we accompany the rural customers as they
climb the energy ladder?
Would it be better to work instead on access to delivery of services
from these appliances, through some sort of rental or leasing arrangement, that
is immediately affordable to low income customers? So they would rent charged lights, or charged
fans, or TVs, through a monthly subscription,
or come to a central location to use a milling machine belonging to an
entrepreneur, and pay per use?
Or, should we continue to focus on building access to electricity,
e.g. through micro-grids and mini-grids, or even grid connection, and let the customers
use the electricity initially only for light-bulbs and mobile charging, until they can afford to buy other
appliances in future and enjoy the productive uses? These are two different development models.
Are there nuances to these models or hybrids of these models?
What are your
views on this? For those who have
first-hand experience with customers of micro and mini-grids, please tell us
whether the electricity is mainly used for lighting, in limited quantities
related to affordability, or whether the other appliances start to appear
relatively quickly? Please also share any other technical or non-technical
issues that affect consumer demand. (Please be sure to tell us in which
country, and where, your mini-grid experience is located).
For those with experience in delivery of energy services (derived demand for electricity) and productive uses of energy, please share your thoughts and insights with us.
We look forward to hearing from
you and discussing this issue over the next 3 weeks. Thanks!
Could we please hear from some mini-grid experts? And do you have information on what your customers use the electricity for? are there productive uses that have emerged after electricity access? any evidence of daytime load, or is it simply expenditure switching, from kerosene lights to electric lights?
Please share your thoughts with us about mini-grids and micro-grids and whether these give rise to productive uses, and under what conditions. Thanks!
We should also remember that in many parts of the world the early days of telephony developed in remote / rural areas by virtue of the phone companies following the power companies rather than the other way round. There is every potential for this to be replicated in areas where there is no existing network coverage. The Telco's are always seeking to enlarge their subscriber base, our market survey has revealed a surprisingly high capacity for rural communities to pay for electricty, the wealth generation that electrification creates will attract the network operators to tap into this previously ignored customer base as well.
Mark Foley, Sincronicity Power
Apollo Solar provides technical solutions in the form of the power electronics for conditioning, control, and monitoring of PV systems that provide electrification where grid power is either absent or unreliable. In most instances the economic models for the deployment of the systems and the Apollo product solutions comes are based on NGO and Government funding. The business opportunity for ESCOs is valid, with the understand that the ROI requires quantification of overall local and regional economic improvements rather than simply of the infusion of investor capital.
Daniel TwoEagles--thanks for your important point about needing to include quantification of overall local and regional economic improvements as part of the return on investment (instead of simply limiting it to the financial return on investor capital). We are aware that Social Impact Investors are precisely interested in capturing these social and environmental returns in addition to their financial return (which has to be positive as well of course--they are in it to make money, but their objective is also to create impact). We are keen to hear how people like you, who are thinking about this, may have come up with ideas on how to systematically measure such improvements. There is a real need for a standardized methodology to measure and track social and environmental benefits from using renewable energy solutions, so that such benefits can become a routine part of the "claims" and the "arguments" for investing in such projects. Please share your thoughts with us.
Eventually the goal is to take a large cluster of small community power projects, maybe across different geographical zones or even in different countries, and to be able to seek funding for that bundle from a social impact investor whose unit of account could start with e.g. $5 million. He would have to clearly understand the benefits (financial returns as well as non-financial returns) that he is expecting for making available his $5m. For this we need to have a fairly clear and non-controversial way to define these other benefits.