Discussion » E-Discussion #2 - Brainstorming on the Initiative
E-Discussion #2 - Brainstorming on the Initiative
Dear colleagues,
The e-institute webinar presenting the Telecom-Energy Initiative brought over 100 participants. Many of you have contributed to the discussion through the live chat with excellent questions and very useful comments. We thought this material was interesting enough to start a new E-Discussion around the initiative itself.
Please find below a short summary the different questions and comments made during the webinar:
Anchors: Can the model work with different anchors? Why Telecom Towers do not get into the power business? How far Telecom Towers can be installed from a WAN?
Finance: What is the critical size for a project to be financed? How can we reduce transaction costs? How to finance capital expenditure? Local debt access may also be a barrier to be considered. How can IFC support private sectors companies willing to engage into such business model?
Technology: Who ensures that mini-grids are being built to an agreed standard? Is there any mini-grid examples utilizing biomass or small hydro in Africa? Is battery cost a barrier in itself or are new technologies being available? Do examples using power delivery and mobile banking already exist?
Policies and Regulations: Can we use incentive mechanisms based of fossil fuels subsidies’ reductions?
Communities: There are many types of communities with different characteristics, this need to be understood by entrepreneurs.
ESCOs: What is the foreseen nature of potential ESCOs (origin, national or international, small or large, newly created or already existing)? Is there a distinction between an ESCO supplying power to a community and an ESCO working in the energy efficiency space?
Just pick one thread or start a new one by replying to this post. The project team will join you in a brainstorming effort to define conjointly the best way to pursue this exciting project forward!
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Anchors
Cell phone companies are telecommunication companies not utilities. They expect a higher rate of return than utility companies typically enjoy and so there is no incentive for them to get into the electricity supply business. Over 90% of cell phone towers world-wide are plugged into some form of major electrical Grid system. Cell phone companies only install their own power systems when there is no other choice. (i.e. remote off-grid systems). Even then they will distort and sub-optimize their coverage, if only to site a tower near an electrical supply, rather than install their own power, or pay for a dedicated grid extension, unless that is prohibitively expensive.There are some examples of cell phone companies testing out community power systems, but these come under the banner of CSR and not from a viable commercial business model (on the whole).
Cell phone towers in developing countries are not attached to optical networks (they don't exist and other than the major trunk routes are too expensive to install (more expensive than building an electricity grid.)) The back-haul (how to get the telephone signals back to the switching centres and on eventually to the nearest tower for the intended recipient) is primarily done by microwave hopping by line of site between the towers. Thus towers are spaced every 15km or so. Sometimes a relay mast is installed with only the microwave links and no cell phone broadcast and receiver radios in order to connect up the network over say a range of hills where there are no potential clients.
Note that in many cases the optimum siting of the tower may not be in a village but in a location in between villages, so one tower (with a range of 15km) can cover more than one village. For those who still favour a mini-grid approach over powering each customer independently, be aware that you may have many miles of overhead power cables just to reach your first customer after the anchor client, with all the attendant capital cost. You will then need to check the cables regularly. A couple of croc-clips will see some enterprising individuals helping themselves to fee electricity.....
I would like to seek some feedback regarding Financing. This is especially pertinent at this point because of the forthcoming Investors' conference on Incubating Innovation for Off-Grid Rural Electrification on March 21.
Financing is routinely identified as a major barrier to be addressed in unlocking the potential for innovative business models and technologies to develop and scale-up. However, there appears to be very little information on what exactly is meant by "financing need". On the one hand, most published reports and studies tend to aggregate financing needs and on the other hand most private and public sector financing agencies are constrained by their specific mandates - in terms of what can be funded by them. Over the past several months, various conversations here on the platform and elsewhere have touched upon different types of financing needs (e.g., debt, equity, commercial loans, grants, working capital assistance, etc), which appear to depend on factors such as (a) the nature of the company (e.g., manufacturer, solution provider, ESCO, etc), and (b) type of operation or stage of development of the company (e.g., R&D, demonstration projects, scale-up, etc.) and therefore may have to target different types of financiers (e.g., donors, foundations, impact investors, commercial bank, IFIs, etc).
So, is it possible to create a categorization of financing needs? Can we profile companies and their needs in a way that allows us to match financing needs with availability? Does such information exist? If yes, where can we find it?
And finally, the most important question. Is this line of thought valid and should we pursue this further?
Discussion » E-Discussion #2 - Brainstorming on the Initiative
E-Discussion #2 - Brainstorming on the Initiative
Dear colleagues,
The e-institute webinar presenting the Telecom-Energy Initiative brought over 100 participants. Many of you have contributed to the discussion through the live chat with excellent questions and very useful comments. We thought this material was interesting enough to start a new E-Discussion around the initiative itself.
Please find below a short summary the different questions and comments made during the webinar:
Just pick one thread or start a new one by replying to this post. The project team will join you in a brainstorming effort to define conjointly the best way to pursue this exciting project forward!
Anchors
Cell phone companies are telecommunication companies not utilities. They expect a higher rate of return than utility companies typically enjoy and so there is no incentive for them to get into the electricity supply business. Over 90% of cell phone towers world-wide are plugged into some form of major electrical Grid system. Cell phone companies only install their own power systems when there is no other choice. (i.e. remote off-grid systems). Even then they will distort and sub-optimize their coverage, if only to site a tower near an electrical supply, rather than install their own power, or pay for a dedicated grid extension, unless that is prohibitively expensive.There are some examples of cell phone companies testing out community power systems, but these come under the banner of CSR and not from a viable commercial business model (on the whole).
Cell phone towers in developing countries are not attached to optical networks (they don't exist and other than the major trunk routes are too expensive to install (more expensive than building an electricity grid.)) The back-haul (how to get the telephone signals back to the switching centres and on eventually to the nearest tower for the intended recipient) is primarily done by microwave hopping by line of site between the towers. Thus towers are spaced every 15km or so. Sometimes a relay mast is installed with only the microwave links and no cell phone broadcast and receiver radios in order to connect up the network over say a range of hills where there are no potential clients.
Note that in many cases the optimum siting of the tower may not be in a village but in a location in between villages, so one tower (with a range of 15km) can cover more than one village. For those who still favour a mini-grid approach over powering each customer independently, be aware that you may have many miles of overhead power cables just to reach your first customer after the anchor client, with all the attendant capital cost. You will then need to check the cables regularly. A couple of croc-clips will see some enterprising individuals helping themselves to fee electricity.....
Dear Colleagues,
I would like to seek some feedback regarding Financing. This is especially pertinent at this point because of the forthcoming Investors' conference on Incubating Innovation for Off-Grid Rural Electrification on March 21.
Financing is routinely identified as a major barrier to be addressed in unlocking the potential for innovative business models and technologies to develop and scale-up. However, there appears to be very little information on what exactly is meant by "financing need". On the one hand, most published reports and studies tend to aggregate financing needs and on the other hand most private and public sector financing agencies are constrained by their specific mandates - in terms of what can be funded by them. Over the past several months, various conversations here on the platform and elsewhere have touched upon different types of financing needs (e.g., debt, equity, commercial loans, grants, working capital assistance, etc), which appear to depend on factors such as (a) the nature of the company (e.g., manufacturer, solution provider, ESCO, etc), and (b) type of operation or stage of development of the company (e.g., R&D, demonstration projects, scale-up, etc.) and therefore may have to target different types of financiers (e.g., donors, foundations, impact investors, commercial bank, IFIs, etc).
So, is it possible to create a categorization of financing needs? Can we profile companies and their needs in a way that allows us to match financing needs with availability? Does such information exist? If yes, where can we find it?
And finally, the most important question. Is this line of thought valid and should we pursue this further?
Technology.
I believe that significant progress will only be made when we have technologies
for optimally managing power distribution that are universal, flexible, inexpensive,
and networked (these are not unrelated). Just as people in all countries charge
phones with USB and USB is therefore cheap and highly interoperable, we need
power distribution technologies with the same characteristics. This would learn
lessons from Internet technology development, while recognizing critical differences
between data and electricity.
I have a technology proposal on this called Local Power Distribution, with the
smallest unit of power distribution being a Nanogrid. This is described further at:
http://nordman.lbl.gov/nordman.html#NANO
a schematic of a nanogrid is below. Please contact me if this interests you:
Bruce Nordman
BNordman@LBL.gov
nordman.lbl.gov
+1 510 486-7089
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