UNEP Report Proposes Pooling Facilities as Solution to Micro-grid Financing

April 2015: The UN Environment Programme (UNEP) has launched a study on mini-grids that proposes ‘Mini-grid Pooling Facilities (MPFs)’ as a solution to overcoming key investment barriers. Presenting mini-grids as a critical solution for improving energy access globally, the study examines the challenges of associated investment risks and transaction costs, and proposes addressing these through project and capital pooling.

The report, titled ‘Increasing Private Capital Investment into Energy Access: The Case for Mini-grid Pooling Facilities’: provides an overview of mini-grids, including ownership models; identifies and examines two key investment barriers, namely risks to investment in emerging markets and project costs in developing economies; assesses the benefits and drawbacks of project pooling facilities; and explores MPF structures and stakeholders.


On risks, the study notes that mini-grids in emerging markets present a complex risk profile. In addition to discussing perceived risks, such as political or fuel cost volatility, the study examines risks to investment in mini-grids during the development, construction and operation phases, as well as across phases. The study also identifies high transaction costs in developing countries in the areas of project identification, evaluation and diligence, and platform development.


According to some estimates, achieving universal electricity access by 2030 will require mini-grids to serve over 65% of off-grid populations globally. Arguing for the need to develop new financing models to reach such levels of deployment, the report presents MPF as conceptual framework for private-sector financing that pools projects and capital to support the development of mini-grids internationally. According to the study, MPFs can diversify risk and increase capital requirements by strategic selection of projects into portfolios.


The report suggests that MPFs can also help: lower transaction costs through centralizing fixed expenses; decrease technology costs; attract previously unavailable capital; and leverage philanthropic investment, among others. The study stresses the need for developers, investors and researchers to work jointly, conducting proper analyses and determining the appropriate structures for each working context. [UNEP Publications Webpage] [Publication: Increasing Private Capital Investment into Energy Access] More

 

 

 

Why has ‘microhydro’ been neglected as a solution to energy poverty?

We live in a world of growing resource scarcity. The oft-quoted statistic is that by 2050 two thirds of the world’s population will live in areas of water stress or scarcity.

Currently, agriculture is the largest user of water, but as the World Bank’s Thirsty Energyinitiative points out, increasing demands for energy will also require increasing use of freshwater. And as populations rise, so will the need for more water and energy for food production.

Many say we need greater efficiency in order to help manage some of these difficult trade-offs between water, energy and food. Much of this debate is focused on macro-level solutions. However, the International Energy Agency has calculated that 55% of all new electricity supply will need to come from decentralised systems if we are to reach the goal of universal energy access by 2030.

So could decentralised, off-grid solutions hold the key? For many years, influencers have debated whether community-based, off-grid schemes can deliver energy sustainably. But this battle has not yet been won. Recently new lines have been drawn by Bill Gates, who called for centralised, fossil-fuel based electrification to solve energy poverty and SunEdison founder Jigar Shah who responded by putting forward the case for distributed renewable solutions.

While this debates goes on at the policy level, what do experiences on the ground tell us? At Practical Action, we have found that micro hydropower (or microhydro) systems, which produce power from streams and small rivers, provide huge potential for sustainable energy.

For example in Peru, microhydro systems installed in the mid- to late-1990s are still running today. Not only do they provide electricity for light bulbs and other small appliances, they can also supply continuous power for local clinics, allow people to use fridges and run small businesses. We found they reduced household energy expenditure by more than half, and 60% of families said their incomes had increased.

However, there is still unexplored potential for decentralised hydropower. In both Peru and Nepal (where micro-hydro schemes are widespread), there was rarely any deliberate attempt to connect the electricity generated to agricultural systems, or to make use of the channelled water for irrigation. This means missing out on a set of potentially transformational opportunities. Decentralised energy systems can not only improve energy access, but also help to maximise the relationships between water, energy and food, both now and in the future.

More recently, and learning from our experiences, we have been making the connection between agriculture and energy more directly. Together with Oxfam we have been working in Zimbabwe, for example in the Himalaya scheme which uses the electricity generated by the microhydro plant, as well as the channelled water, for much-needed irrigation.

The approach does of course have it’s challenges. Across the schemes we’ve developed in Zimbabwe familiar challenges and trade-offs emerge, particularly with a recent severe two-year drought followed by heavy rains. For example, in Chipendeke in Zimbabwe, initial planning for hydropower failed to fully accommodate existing irrigation needs. As a result during the dry season, there was insufficient water to run both the irrigation and the hydro simultaneously. Eventually the villagers reached a compromise where the microhydro plant was switched off for short periods to allow more water for irrigation.

In Ngarura, there were delays in construction of the microhydro project and farmers lost trust. They continued cultivating the steep river banks, and when the rains came there was heavy siltation of the system. The lesson there was that farmers have to be convinced of the benefit of the scheme in order to preserve the river banks.

Despite these problems, in both cases solutions were reached through dialogue and the community balancing their priorities. It is important not only to focus on the infrastructure for hydropower but also the institutions to support it and that is as much part of increasing resilience as the energy or water itself.

Development organisations can sometimes be rightly accused of being starry-eyed about the potential of community ownership and management. In the case of a microhydro plant this can impose unrealistic burdens, and in the absence of support structures from local technicians, spare parts, and a clear sense of ownership infrastructure can quickly fall into disuse. But the sector has been learning, as research shows. The right systems for decentralised energy production can be created and it can provide a sustainable solution to energy poverty. More

 

CARICOM Special Meetings Focus on CCREEE, Sustainable Energy

5 February 2015: The Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) and the Caribbean region's sustainable energy strategies were at the center stage at two Special Meetings of the Council for Trade and Economic Development (COTED) of the Caribbean Community (CARICOM).

The ministerial meetings on energy and the environment focused on the establishment of the CCREEE, regional energy coordination and sustainable energy strategies, and the post-2015 development agenda, among other themes.

The establishment of the CCREEE, which was endorsed by COTED in November 2014, was on the agenda of the Special Meetings on Energy, and Energy and the Environment, held in Georgetown, Guyana, from 4-5 February. The meetings, among other things, explored “the full ramifications and optimum exploitations of CCREEE.” CCREEE is currently in the process of being established with the assistance of the UN Industrial Development Organisation (UNIDO), Austrian Government and SIDS DOCK initiative of the Alliance of Small Island States (AOSIS). The Centre's mandate will be technical, namely to support and coordinate the execution of CARICOM's sub-regional and regional renewable energy and energy efficiency programmes, projects and activities.

Calling for a “cohesive regional effort” to achieve sustainable energy security, Chair of the Special Meeting on Energy, and Minister of Science, Technology, Energy and Mining of Jamaica Phillip Paulwell said that “although sustainable energy solutions have made great strides” in the CARICOM region, significant gaps and barriers remained in the areas of renewable energy access, energy efficiency and reliable grid development and deployment.

CARICOM Deputy Secretary-General Manorma Soeknandan similarly noted that, despite progress made, “significant additional changes” would need to be made to meet the demands for reliable, secure, efficient and cost-effective energy services, suggesting that “energy is about sustainable livelihoods and job creation alike.”

The 54th and 55th Special Meetings of COTED, held at the CARICOM Secretariat, were preceded by preparatory sessions among regional officials from the fields of energy and the environment. [CARICOM Today Press Release on CCREEE] [CARICOM Today Press Release on Paulwell's Speech] [CARICOM Today Press Release on Soeknandan's Speech]

 

Caribbean Energy Security Summit Commits to Energy Transition

Twenty-six countries, together with seven regional and international organizations, have released a joint statement in support of the transformation of the energy systems of Caribbean countries. The signatories of the statement, signed during the Caribbean Energy Security Summit, commit to pursuing comprehensive approaches to an energy transition toward “clean sustainable energy for all” and reforms that support the creation of favourable policy and regulatory environments for sustainable energy.

The Summit, which was co-hosted by the US Department of State, the Council of the Americas and the Atlantic Council, brought together finance and private sector leaders from the US and the Caribbean, and representatives of the international community. The event showcased the initiatives under the Caribbean Energy Security Initiative (CESI) in the areas of improved governance, access to finance and donor coordination, and featured discussions by partner countries on comprehensive energy diversification strategies.

During the event, the US Government announced enhanced support for technical assistance and capacity-building programs in the Caribbean, through the Energy and Climate Partnership of the Americas (ECPA) initiative, among others, with the aim of promoting a cleaner and more secure energy future in the region. Caribbean leaders agreed to pursue comprehensive energy diversification programs and facilitate the deployment of clean energy.

Furthermore, presentations and updates were provided by, inter alia: Caribbean leaders on energy sector goals; the World Bank on a proposed Caribbean Energy Investment Network for improved coordination and communication among partners; and the US Overseas Private Investment Corporation (OPIC) on a new focus on clean energy project development in the Caribbean, which includes US$43 million in financing for a 34 MW wind energy project in Jamaica.

Highlighting the role of the Organization of American States (OAS) in supporting the transition to sustainable energy in the Caribbean, OAS Secretary General José Miguel Insulza said the past five years had seen an “unprecedented push” in the Caribbean toward the development of the region’s renewable energy sources, noting this was “doubly impressive” “in a time of low oil prices.”

The Summit, which took place on 26 January 2015, in Washington, DC, US, is part of CESI, launched by US Vice President Joseph Biden in June 2014. The regional and international organizations signing the statement were the Caribbean Community (CARICOM) Secretariat, the Caribbean Development Bank, the EU, the Inter-American Development Bank (IADB), the International Renewable Energy Agency (IRENA), the OAS and the World Bank.

The joint statement was also signed by the Governments of Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Canada, Colombia, Curacao, Dominica, Dominican Republic, France, Germany, Grenada, Guyana, Haiti, Jamaica, Mexico, New Zealand, Spain, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, United Kingdom, and the United States. More

Credit: SIDS Policy & Practice IISD

 

 

Caribbean Energy Summit 2015: US Announce Investments in Energy Security for Caribbean Countries During First-Ever DC Summit

The Obama administration recently hosted the first Caribbean Energy Security Summit to support the region's improved governance, access to finance and increased donor coordination for the energy sector.

Vice President Joe Biden has led the issue of Caribbean energy security and said the Obama administration considers the topic as a primary issue.

“This is extremely important to us. It's overwhelmingly in the interest of the United States of America that we get it right, and that this relationship changes for the better across the board,” Biden said.

Biden added that the low oil prices have given little breathing room for governments, but there are alternatives. He mentioned renewable energy as an affordable source in addition to developing wind and solar energy.

“Meanwhile, we're in the midst of a seismic shift in the global economy: the ascendancy of the Americas as the epicenter of energy production in the world,” Biden said. “We have more oil and gas rigs running in the United States, than all the rest of the world combined. Mexico, Canada and the United States is the new epicenter of energy — not the Arabian Peninsula. It is the new epicenter of energy in the 21st century.”

The vice president called for an integrated North America to promote energy security since the U.S. wants Caribbean countries to “succeed as prosperous, secure, energy-independent neighbors — not a world apart, but an integral part of the hemisphere, where every nation is middle class, democratic and secure.”

Biden further stressed the purpose of the summit is not to “put up another solar panel or sign another gas contract” but to help countries establish protocol to attract private-sector investment. The vice president, however, acknowledged that countries have to confront corruption by having clear and transparent rules.

The U.S. created the Overseas Private Investment Corporation (OPIC), which will focus on developing energy projects for the Caribbean. Biden announced $90 million from the OPIC will be funded to Jamaica for wind projects.

The Caribbean Energy Security Summit is a “key component” to Biden's Caribbean Energy Security Initiative, which he announced in June 2014.

A joint statement on Monday had participating countries and regional and international organization agreeing for the Caribbean to make “necessary and specific reforms” that include efforts for sustainable and clean energy technologies. The participants also stated their commitment to exchange data and energy information.

The Jan. 26 summit from Washington, D.C. included governments from Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Canada, Colombia, Curacao, Dominica, Dominican Republic, France, Germany, Grenada, Guyana, Haiti, Jamaica, Mexico, New Zealand, Spain, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago and the United Kingdom. The Caribbean Community (CARICOM) Secretariat, Caribbean Development Bank, European Union, Inter-American Development Bank Group, International Renewable Energy Agency, Organization of American States and the World Bank Group also participated. More

 

World Resources Institute Publishes Renewable Energy Cost Comparison Factsheet

17 November 2014: The World Resources Institute (WRI) has launched a factsheet that enables better cost comparisons of electricity from renewables and fossil fuels by identifying key factors to consider, namely: type of user; supply options; and factors that impact additional costs and benefits, such as environmental risks or financial incentives.

The publication, titled ‘Understanding Renewable Energy Cost Parity,’ seeks to provide a simple, “go-to” resource for information on appropriate comparisons of renewable and “traditional” electricity supply options. The factsheet constitutes the first in a series of three publications that aim to support clarity and precision in cost analyses of renewable energy options made by decision makers in companies, residences, governments and advocacy organizations. In particular, the guide is intended for electricity buyers looking for financial savings, and electricity system planners, regulators and policy makers seeking economic and social benefits for end-users.

The publication argues that, in order for decision makers to know where and when renewable energy is the cheapest solution, they should establish: “with what should a renewable energy option be compared”; and “which factors need to be considered in determining cost parity.”

Among the publication’s key messages are that: for end-use consumers, on-site generation is cost-competitive when its average cost of energy is lower than or equal to the retail electricity price over the project’s lifetime; for large industrial and/or commercial consumers, power purchase agreements (PPAs) are cost-competitive when the price paid for generated electricity is lower than or equal to the retail electricity price over the project’s lifetime or contract; and, for utilities and other wholesale buyers, a renewable energy project is cost-competitive if its cost of energy and/or risk is lower than or equal to that of other technologies providing the same service during the same period of time.

The factsheet also argues for the need to take into account potential additional factors, including fluctuations in electricity prices, different time periods used in comparisons, assumptions and methodologies relating to levelized cost of energy (LCOE) calculations, technology-specific subsidies, possible PPAs, and costs of compliance with environmental regulations. [WRI Blog Post] [WRI Publication Webpage] [Publication: Understanding Renewable Energy Cost Parity] More

 

 

 

Scientists predict green energy revolution after incredible new graphene discoveries

A recently discovered form of carbon graphite – the material in pencil lead – has turned out to have a completely unexpected property which could revolutionise the development of green energy and electric cars.

Researchers have discovered that graphene allows positively charged hydrogen atoms or protons to pass through it despite being completely impermeable to all other gases, including hydrogen itself.

The implications of the discovery are immense as it could dramatically increase the efficiency of fuel cells, which generate electricity directly from hydrogen, the scientists said.

The breakthrough raises the prospect of extracting hydrogen fuel from air and burning it as a carbon-free source of energy in a fuel cell to produce electricity and water with no damaging waste products.

“In the atmosphere there is a certain amount of hydrogen and this hydrogen will end up on the other side [of graphene] in a reservoir. Then you can use this hydrogen-collected reservoir to burn it in the same fuel cell and make electricity,” said Professor Sir Andrei Geim of Manchester Univeristy.

Ever since its discovery 10 years ago, graphene has astonished scientists. It is the thinnest known material, a million times thinner than human hair, yet more than 200 times stronger than steel, as well as being the world’s best conductor of electricity.

Until now, being permeable to protons was not considered a practical possibility, but an international team of scientists led by Sir Andre, who shares the 2010 Nobel Prize for his work on graphene, has shown that the one-atom thick crystal acts like a chemical filter. It allows the free passage of protons but forms an impenetrable barrier to other atoms and molecules.

“There have been three or four scientific papers before about the theoretical predictions for how easy or how hard it would be for a proton to go through graphene and these calculations give numbers that take billions and billions of years for a proton to go through this same membrane,” Sir Andrei said.

“It’s just so dense an electronic field it just doesn’t let anything through. But it’s a question of numbers, no more than that. This makes a difference between billions of years and a reasonable time for permeation. There is no magic,” he said.

The study, published in the journal Nature, shows that graphene and a similar single-atom material called boron nitride allowed the build-up of protons on one side of a membrane, yet prevented anything else from crossing over into a collecting chamber.

In their scientific paper, the researchers speculate that there could be many applications in the field of hydrogen fuel cells and in technology for collecting hydrogen gas from the atmosphere, which would open up a new source of clean energy.

“It’s really the very first paper on the subject so what we’re doing is really to introduce the material for other experts to think about it,” Sir Andrei said.

“It was difficult not to speculate. If you can pump protons from a hydrogen-containing gas into a chamber that doesn’t contain anything, you start thinking how you can exploit this?” he said.

“One of the possibilities we can imagine, however futuristic, which has to be emphasised because everything has been shown on a small scale, is applying a small electric current across the membrane and pushing hydrogen though the graphene or boron nitrite membrane,” he explained.

“Essentially you pump your fuel from the atmosphere and get electricity out of this fuel, in principle. Before this paper, this wouldn’t even be speculation; it would be science fiction. At least our paper provides a guidance and proof that this kind of device is possible and doesn’t contradict to any known laws of nature,” Sir Andre added.

Graphene: potential uses

Graphene is tough, about 200 times stronger than steel, yet incredibly light. It is considered the first two-dimensional material because it forms sheets of crystal that are just one atom thick.

It is also an excellent conductor of electricity, so is useful for anything involving electronics, such as bendable mobile phones and cameras, and wearable electrical devices attached to clothing.

Medical applications include its possible use as a material for delivering drugs to damaged sites within the body, which could open new avenues for treating patients with brain conditions such as Parkinson’s disease or cancer.

Graphene is also being developed as a new material for membranes involved in separating liquids. It could be used to purify water in the developing world or to create more efficient desalination plants.

Scientists also believe that graphene’s high strength and low weight can be harnessed in the making of new composite materials and polymers for the transport industry, making travel safer and more fuel efficient.

Now, it seems, graphene might also be used to generate new forms of generating clean electricity using hydrogen fuel cells, and even as a technology for harvesting hydrogen fuel from air. More