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Sustainable Energy Access Planning Framework

Ram M. Shrestha and Jiwan S. Acharya

SE4ALL Consultation Workshop: Monitoring the Status of Asia-Pacific Discovery Suites, Ortigas Center, Pasig City, Philippines, 14 June 2015

SEAP:Key Issues, Assessments and Outputs

Key Issues of Sustainable Energy Access Planning (SEAP)

Sustainability of cleaner energy options

Poor’s affordability to cleaner energy services

Socially efficient allocation of resources for

energy access Assessment of social,

environmental, health & other benefits of cleaner

energy access

Key Information that SEAP Generates

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• Cost effective cleaner energy options (in both supply- and demand-sides)

• Total cost, additional investment and unit cost of cleaner energy • Household expenditure on cleaner energy services• Affordability• Level of financial support needed• Benefits associated with an energy access program• Sustainability ranking of cleaner energy options

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Components of SEAP

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SEAP Framework: Linkage of different Assessments

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SEAP

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Bottom-up Approach to Demand Assessment

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Dimensions of Resource Assessment

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Resource Assessm

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Ease of Access

Sustainability

Cost

Adequacy

Availability

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Dimensions of Sustainability Assessment

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Cost Assessment Framework for Electricity Access

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Cost

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Benefits of Energy Access Programs

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Measuring Affordability using the Energy Burden Approach

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An Application of SEAP Framework: Case Study of Pyuthan District, Nepal

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Pyuthan District in Nepal

Background• Both primary as well as secondary data used.

• Sample survey data of 2330 households covering all the 49 VDCs in the district.

• Secondary data from government sources at district and national level and private agencies/offices and their publications used.

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Electricity Access

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Electricity Access Status in Pyuthan by VDCs in 2014

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Most VDCs are partially electrified5 VDCs partially electrified with SHS

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Definition of Tiers based on Household Electricity Consumption

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Tier Range of electricity consumption (E), kWh

Tier 0 E< 3

Tier 1 3 ≤ E< 66

Tier 2 66 ≤ E< 285

Tier 3 285 ≤ E< 1464

Tier 4 1464 ≤ E< 2267

Tier 5 E ≥ 2267

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Distribution of HHs byElectricity Consumption Level in Pyuthan in 2014

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Tier 020.3%

Tier 116.5%

Tier 232.7%

Tier 328.7%

Tier 41.5%

Tier 50.3%

Distribution of HHs in Terms of Their Electricity Consumption Level Tier Average

electricity consumption,

kWh Tier 0 0

Tier 1 27

Tier 2 135

Tier 3 358

Tier 4 1300

Tier 5 2349

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Demand Assessment

Electricity Demand Projection of Pyuthan

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In 2017, the electricity demand in Tier 3 is 1.5 times that of Base Case.

In 2030, the electricity demand in Tier 3 is 1.3 times and in Tier 5 it is 5.7 times that of Base Case.

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program), the electricity demand would grow by 4.7% during 2014-2030.

Sustainability Assessment

Sustainability Ranking of Electricity Generation Technologies

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• In terms of economic, technical, environmental and social dimensions, large hydro power generation technology has been found to be more sustainable.

• Even though power generation based on micro-hydro has been found to be equally environmental friendly in comparison to the large hydro, however the technology seems to be less sustainable economically, technically and socially.

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Cost Assessment

Installed Capacity of Supply Side Technologies in 2017 and 2030, MW

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In 2017, the installed power generation capacity would increase by 3% in Tier 1, 10% in Tier 2 and 54% in Tier 3 as compared to the Base Case.Grid share : 94% in Tier 3

In 2030, the installed capacity would increase by 27% in Tier 3, 269% in Tier 4 and 466% in Tier 5 as compared to that in the Base Case.Grid Share : 97% in Tier 3, 100% in Tiers 4 and 5.

Investment in Supply -side Technologies in 2017 and 2030, billion NRs*

In 2017, total investment would increase by 16% in Tier 1, 20% in Tier 2 and 54% in Tier 3 as compared to that in the Base Case.

In 2030, total investment would increase by 46% in Tier 3, 218% in Tier 4 and 350% in Tier 5 as compared to the Base Case.

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*It does not include the generation investment cost in the grid system.

Total Cost of Electricity Access Depends on Types of Lamps and Other Demand Side Technologies Used

• Total cost is found to be minimum with LED lamps used for lighting.• Providing Tier 3 level of electricity access based on CFL and incandescent

(INCAN) lamps would increase the total cost by 6.7% and 28.5% respectively as compared to the total cost with lighting based on LED lamps.

• Demand side options matter!

Cases % increase in total cost as compared to LED based Lighting

CFL INCAN

Tier 1 1.0% 4.4%

Tier 2 4.9% 23.5%

Tier 3 6.7% 28.5%

What would be the Incremental Energy Access Costs? (Considering Demand Increment Relative to the Base Case)

Incremental access cost increases with higher level of demand

• The width of each block in the horizontal axis shows the incremental level of electricity supply under an electricity access tier.

• The values in the vertical axis represents the corresponding IEAC per unit (kWh) of electricity supply. • It shows the incremental electricity access cost decreasing with the higher levels (Tiers) of access.

Cleaner Cooking Access

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Multi-Tier Framework for Household Cooking Solutions

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Technology attributes Tier 0 Tier 1 Tier 2 Tier 3 Tier 4

Cooking device

TCS with fuel

wood

MICS with fuel

wood

HICS with fuel wood

or briquette

LPG/Biogas cook stove Electric

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Source: Practical Action (2013)

TCS: Traditional cook stovesMICS: Moderately improved cook stovesHICS: High efficiency improved cook stoves

Share of Technologies in Cooking in Pyuthan in 2014

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76% share of Traditional Cook Stove (TCS)

Incremental Energy Access Cost Curve for Providing Clean Cooking in Pyuthan with Biomass and Non-biomass Cleaner Options

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MICS and HICs are “win-win” (cost saving) options

Affordability Assessment:Distribution of Households with Level of Energy

Burden in Pyuthan in 2014 (%)

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% of households with energy burden

≤ 5% 5 to 10% 10% to 15% 15 to 20% ≥ 20%

Cooking 75.7 15.8 5.7 1.9 0.9

Lighting 92.3 6.1 1.2 0.2 0.2

Space heating 98.2 1.5 0.2 0.0 0.0

Overall* 43.6 29.2 12.2 7.1 7.9

*includes all the energy expenditure burden

• 27 % of HHs have total energy burden above 10%• 15% of HHs have total energy burden above 15%

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Affordability Assessment:How much annual subsidy would be required per

household in 2017 if energy burden is not to exceed 10%?

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Under Tier 1 level of electricity and cooking energy access, 19 % of households would have energy burden above 10%. Under Tier 3, this figure would increase to 46%.

If 10% is the cutoff value for energy burden, total annual subsidy needed per household is NRs 2. 36 thousand in Tier 1, NRS 2.4 thousand I Tier 2 and NRs 6.22 thousand in Tier 3.

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Benefits of Electricity Access

Productive Uses:• 90 % of the households with family business had electricity access. 10% of

HHs with family business had no electricity access.

Time saving:• Up to 48 hours of time saving per month per household for purchasing

kerosene in lighting.

Education:• The sample survey shows that average study hour of students with electricity

access is 66% higher than that of students without electricity access.

Energy Security: • Amount of kerosene replaced in 2017, 2022 and 2030 would be 113, 130 and 171

toe respectively.

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Health Benefits, Local Pollutant & CO2 Emissions Reductions due to Electrification

Emission Reduction Benefit:• Replacement of kerosene, candle and pine resin based lighting could abate

• 7,747 kg of CO• 669 kg of NOX

• 4,844 kg of PM10

• 41,275 kg of BC• 1,433 tonne of CO2

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VDC Status Number of hospital visits per year per HH

Number of annual absent days per household

Damri Unelectrified 3.3 32.1 days

Dakhakwadi Electrified 2.5 10.7 days

Health Benefit:Lower number of hospital visits and annual absent days in electrified VDCs.

Key Messages (1)• Major issues of energy access planning are: social

inclusiveness, affordability of the poor to cleaner energy services and sustainability of energy access programs.• It is not enough to make clean energy available, it should

also be affordable to use. • SEAP framework considers these issues explicitly.• Energy access being a societal problem, the solutions

must be socially cost effective.• Both supply and demand side options should be

considered to determine the socially cost effective energy access solutions.• Supply side planning with a predetermined set of

demand side technology options could result in more expensive energy access programs.

Key Messages (2)

• Even the socially cost effective and sustainable cleaner energy options may not be affordable to the energy poor households.• However, with the socially cost effective supply and

demand side options, the level of financial support needed by the energy poor would be lower.• SEAP also presupposes that the basic minimum level of

energy services as well as the maximum acceptable energy burden are known. There are no universally applicable values of basic minimum level of energy services and maximum acceptable energy burden. These are country specific policy parameters, which national policy makers have to define.

Acknowledgement

The development of the SEAP framework has greatly benefited from valuable inputs/suggestions from• Peer reviewers (within ADB and outside)• Policy makers • Research assistants

• R. M. Shrestha and J. Acharya. (2015). Sustainable Energy Access Planning: A Framework. (To be released). Asian Development Bank (ADB), Manila.

• Practical Action, 2013, Poor People’s Energy Outlook 2013: Energy for Community Services, Practical Action Publishing, Rugby, UK.

• World Bank/ESMAP and IEA, 2012, Sustainable Energy for All (SE4ALL) Global Tracking Framework, v.3, no. 77889.

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References

Thank You

Email: ram.m.shrestha@gmail.com

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Characteristics of Energy Poor Households

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Demand Assessment of the Energy Poor HHs

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Define the acceptable minimum level of basic energy services

Identify the number of households whose energy consumption is below the acceptable

minimum level based on sample survey

Estimate the amount of energy required to provide households with the acceptable minimum level of basic energy services

Define the acceptable minimum level of basic energy requirement

Identify the number of households whose average energy consumption is above acceptable minimum level

Calculate the total energy consumption of energy non-poor

households based on sample survey

Estimate the future energy demand

Energy Demand Assessment of Energy Poor HHs

Energy Demand Assessment of Energy Non-poor HHs

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Target Level of Electricity Access?

Tier 1 Tier 2 Tier 3 Tier 4 Tier 5

Appliances

radio radio radio radio radio

task lighting task lighting task lighting task lighting task lighting

phone charger phone charger phone charger phone charger phone charger

general lighting general lighting general lighting general lighting

air circulator(fan) air circulator(fan) air circulator(fan) air circulator(fan)

television television television television

food processors food processors food processors

rice cooker rice cooker rice cooker

washing machine washing machine

refrigerator refrigerator

iron iron

air conditionerTotal kWh per year per HH 3 66 285 1464 2267

Source: Based on “Global Tracking Framework” of World Bank/ESMAP and IEA (2012)

Description of Multi-Tier Framework for Household Electricity Access

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