Partnership for Developing Business Models in Energy …icfild.org/bpscsr2/presentation/140807 GIZ...

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Partnership for Developing Business Models in Energy Access

Santosh Singh, IGEN-RE, GIZ India 7 August, 2014

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About GIZ

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•  We are the world’s leading provider of international cooperation services for sustainable development.

•  GIZ’s joint efforts with partners in India currently focus on the following areas

•  Renewable Energy and Energy Efficiency

•  Sustainable Urban and Industrial Development

•  Natural Resource Management

•  Biodiversity

•  Private Sector Development

•  Social Protection

•  Financial Systems Development

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About IGEN-RE

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•  The Renewable Energy Component of the Indo-German Energy Programme (IGEN-RE) is a bilateral cooperation project.

•  It is being carried out by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Indian Ministry of New and Renewable Energy (MNRE).

•  Launched in 2010, the project aims to promote renewable energy in rural areas.

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IGEN-RE Approach

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AREAS OF INTERVENTION

Capacity Development & Support for Key Stakeholders 3

MAIN FOCUS

Enabling Environment,

Scaling-up

Implementing Pilots on Decentralized Rural Electrification 1

Facilitating Supportive Policies and Programmes (state and national level) 2

Replicable Business Models

Networking & Knowledge Dissemination 4

Improved Conditions for

Renewable Energy in Rural

Areas

OBJECTIVE

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Developing Business Models for Energy Access

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Business Models

Creating Demand

Improving Supply

Developing Ecosystem

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Rural Electrification /

Mini Grids

Market Development for

RE products

Improved Biomass Cookstoves

Solar Water Pumps

Pine Needle Gasification

SELCO Incubation Centre

Improved Water Mills

Solar Mini Grids

Cross-cutting Issues

Gender

Involving Corporates

Facilitating Finance

Financial Viability of Biomass Gasification

Uttar Pradesh West Bengal

Uttarakhand

National

Uttarakhand

Uttarakhand, Bihar, West Bengal, UP

Bihar

National

National

IGEN-RE Activity Overview

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Case 1: Clean Cooking Energy

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•  Almost 900 million people in India depend on traditional biomass for cooking energy.

•  More than 90% of these households use traditional inefficient cookstoves.

•  Inefficient combustion results in higher consumption of biomass, degradation of natural resources and increased indoor air pollution (IAP).

•  As per WHO, 488,200 deaths per year can be attributed to IAP in India

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Demand:

•  Poor awareness about IAP & ICS

•  Low incomes & willingness to pay

•  Diverse fuel mix and cooking habits

Supply:

•  Lack of appropriate stove technologies

•  Lack of economically viable business models

Market Ecosystem:

•  Inadequate & technology-driven government policies and support schemes

•  Lack of coordination in the sector

•  Lack of interest from the financial sector

Challenges

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Addressing these challenges is critical for developing a viable business model, however the cost of finding solutions

is often beyond the resources of social entrepreneurs.

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IGEN-RE’s interventions address these challenges and reduces the cost of market development for entrepreneurs.

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Enhancing Affordability of ICS Ø  Tapping Carbon Finance to reduce stove costs:

•  Cookstove PoA and capacity building support for SSS-NIRE (CME)

Ø  Developing models for end-user financing: •  Partnership with social enterprises to pilot different

approaches •  Catalytic facility proposed to MNRE for ICS

financing

Creating Demand

Effective Awareness and Communication Campaigns Ø  Designing cost effective marketing and communication strategy to reduce

marketing costs for entrepreneurs

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Identifying Appropriate Technologies Ø User acceptance field study •  Conducted for 6 different ICS in Bihar, UP and

West Bengal (The report is available at www.igen-re.in)

Ø Emission and efficiency field-test of ICS in actual use conditions: •  IIT Delhi and Berkley Air Monitoring Group are

initiating the work

Improving Supply

Developing Low Cost Distribution Models Ø  Innovative approaches to optimize logistics for dissemination to be

developed with help of consultant Ø  Partnership entered with Project Dharma and SwithOn to pilot developed

approaches

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Facilitating Knowledge Sharing

Ø India Cookstove Forum

Ø Support to networks and industry associations

•  Planning to support an Alliance of Energy Access Practitioners with subgroup on ICS

•  Developing decision support tool for clean cooking stakeholders

Providing Detailed Market Information

Ø Market survey for Bihar, UP, Uttarakhand, WB

•  Primary survey of 7200 households completed. The data will be made public soon.

Market Ecosystem (1)

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Market Ecosystem (2)

Facilitating Enterprise Finance

Ø  Study on barriers for financing rural energy enterprises

Ø  The pilots based on the study findings are being designed.

Supporting Government Policies and Schemes

Ø  Supporting WBREDA in dissemination of 20,000 fixed improved cookstoves

Ø  IGEN-RE is supporting MNRE in development of guidelines for Unnat Chulha Abhiyan

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Case 2: Solar Water Pumps for Irrigation

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•  Potential for replacing 9 million diesel pumps with solar PV pumps (C-STEP).

•  Potential of about 70 million solar PV pumps to be installed by 2020. (HWWI)

•  Potential to install capacity of 16,200 MW in the period 2017-22 for agriculture category (KPMG)

Potential for Solar Pumps for Irrigation

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Present Market Status

•  Primarily driven by Government Tenders.

•  Eligibility criteria encourages participation of large companies.

•  Limited opportunity for enduser financing through involvement of Rural Banks.

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The Challenges in Technology Adoption (I)

Awareness

•  Lack of awareness about the technology.

•  Consumers are unaware of the performance/potential of the technology.

•  e.g. at the time of conversion from diesel to solar many farmers insist on 5 HP rather than on 2 HP pump. Assumption is: the bigger the better.

Affordability

•  Limited involvement of rural banks for end user financing.

•  Even with the government subsidy support, the upfront cost (10-15% of the total cost) of solar water pumps is often too high for some farmers.

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The Challenges in Technology Adoption (II)

Availability

•  Not available through local supply chain (vendors). Hence farmers are unaware of the technology.

•  Poor availability and quality of support for after sale service.

Issue of Risks

•  Farmers are risk averse when it comes to purchasing high value products.

•  Lack of standardization.

•  Fear of theft.

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•  Technology overview

•  Potential and application of solar pumps in India

•  Potential in Bihar

•  Specific barriers and solutions for the application of solar pumps for irrigation in Bihar

•  Can be downloaded from www.igen-re.in

Study on Potential and Challenges of Solar Water Pumping for Irrigation in Bihar

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•  Two 5 HP submersible pumps managed by a farmers’ cooperative; “Pay-per-use model”.

•  Technology demonstration for at least 250 farmers from different districts.

•  Training for bank-managers on technology and financial viability of solar pumps

Awareness Creation and Technology Demonstration

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IGEN-RE and CSR Partnerships

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•  We have done a number of workshops to help the corporate sector to enter energy access interventions.

•  IGEN-RE can help in developing a intervention strategy for CSR in energy access in the areas of -

•  Mini-grids

•  Off-grid lighting

•  Clean Cooking

•  Improved Watermills

•  Renewable Energy in Agriculture

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As a federal enterprise, GIZ supports the German Government in achieving its objectives in the field of international cooperation for sustainable development.

Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Registered offices, Bonn and Eschborn, Germany Indo-German Energy Programme B-5/2, Safdarjung Enclave New Delhi – 110 029, India T +91 11 4949 5353 F +91 11 4949 5391

E [email protected] I www.giz.de

Responsible Hari Natarajan

Photo credits © GIZ

In cooperation with

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Ministry of New and Renewable Energy Government of India

Thank you for your attention.

For more information please visit www.igen-re.in

or email:

[email protected]

Partnership for Developing Business Models in Energy …icfild.org/bpscsr2/presentation/140807 GIZ...

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