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Off Grid Energy Solutions Role of Subsidies. · Conclusion Enormous need for off grid energy...
Transcript of Off Grid Energy Solutions Role of Subsidies. · Conclusion Enormous need for off grid energy...
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Off – Grid Energy
Solutions – Role of Subsidies.
Joseph Nganga
CEO
Renewable Energy Ventures Ltd.
www.africarenewables.com
November 1st, 2012
International Off – Grid Renewable Energy Conference
Accra, Ghana
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Geography
Worldwide1)
Africa1)
Kenya2)
Size
1.6B
589M
30M
Population without Regular Access to Electricity
1) Lighting Africa (editor): Lighting Africa Progress Report 2009-2010. 2010, p. 10.
2) Estimation based on: Elvide, Christopher D. : Who’s in the Dark: Satellite Based Estimates of Electrification Rates. In: Urban Remote Sensing, Xiaojun Yang (editor).
Chichster, UK, 2009, p. 15.
Renewable Energy Ventures
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REV
Consulting
Household Solutions through the „Solanterns
Initiative“
RE & EE Project Development
REV is a RE and EE project development and advisory firm
Renewable Energy Ventures
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Because no one should have to do without modern clean energy
Why are we in this space?
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Economics of off – grid Renewable Energy solutions
an illustration
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Year 1 Year 2 Year 3 Year 4 Year 5
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Kerosene KES KES
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* Average costs per month Lightning Africa Annual Report 2011
Break even will be achieved after 5 months of purchase
Solanterns
Renewable Energy Ventures
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Challenges
Long lead times – as is normal for energy projects
globally.
Still emerging policies
Limited early stage capital
Limited local technical expertise
Limited infrastructure
Project size relative to larger economies
Need to adapt technologies for local conditions
Limited consumer finance
Renewable Energy Ventures
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Off – Grid Business Models Some examples
Smart Mini – Grids
Locally owned and operated
Tied to utility
Hybrid generation
Rental Models for appliances
Appliance distribution models tied to micro –
lending/micro - leasing
Cogeneration
Renewable Energy Ventures
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Role of Subsidies – an
entrepreneur‘s perspective
Renewable Energy Ventures
CAPEX
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Economics of off – grid Renewable Energy solutions
an illustration
0
10,000
20,000
30,000
40,000
50,000
60,000
Year 1 Year 2 Year 3 Year 4 Year 5
0
10,000
20,000
30,000
40,000
50,000
60,000
Year 1 Year 2 Year 3 Year 4 Year 5
Kerosene KES KES
-
* Average costs per month Lightning Africa Annual Report 2011
Break even will be achieved after 5 months of purchase
Solanterns
Renewable Energy Ventures
![Page 10: Off Grid Energy Solutions Role of Subsidies. · Conclusion Enormous need for off grid energy solutions Existing and emerging business models that meet these needs Significant challenges](https://reader033.fdocuments.in/reader033/viewer/2022050315/5f774da0002b1e5d143937fc/html5/thumbnails/10.jpg)
Examples of CAPEX
Subsidies
Subsidies for purchase of mini-grid generation and
distribution equipment
Subsidies for purchase of appliances such as solar
lanterns, solar home systems, biogas digesters etc
Subsidies may be in the form of rebates on
equipment, discounted financing for the same
equipment etc
Renewable Energy Ventures
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Why CAPEX?
Limited financing for renewable energy
equipment
Subsidized CAPEX on mini - grids = Lower tariffs for
consumers + quicker payback for operators
If you build it, they will come………..but only at the
right price
Subsidizing CAPEX ensures sustainability.
CAPEX subsidies cap subsidy provider’s exposure
Renewable Energy Ventures
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Conclusion Enormous need for off grid energy solutions
Existing and emerging business models that meet
these needs
Significant challenges exist that call for
appropriate interventions
Subsidies have a role to play
Subsidizing capital costs at consumer level for
appliances and generation and distribution
equipment for mini – grid operators increases
access to energy, ensures sustainability while capping subsidy provider’s exposure.
Renewable Energy Ventures
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Thank You!
Joseph Nganga
CEO
Renewable Energy Ventures Ltd.
www.africarenewables.com
November 1st, 2012
International Off – Grid Renewable Energy Conference
Accra, Ghana