3.1 Urban Slum Electrification
One billion people, growing at a reported rate of 5% per year, live in poor urban areas, typically called slums, throughout the emerging and developing countries. This represents a huge but latent market for W&C. ICA worked on developing this market together with development institutions, utilities, equipment manufacturers, W&C suppliers and other partners.
In Brazil, 52 million people or 29% of the population live in favelas. The favela of Paraisopolis in Sao Paulo was chosen as a pilot project site. It contains 20,000 households of which 4,365 homes and businesses were selected for the pilot. Service quality was very poor. Almost all had illegal, unpaid connections and were exposed to dangerous distribution and building wiring conditions. All consumed high amounts of electricity. The project took place in 2006-07 and was conducted and funded by a team that included AES Electropaulo (local electric utility), the U.S. Agency for International Development (USAID), ICA and ICA & ICF member Nexans, along with other Brazilian industry and appliance partners.
The project serves as a model to bring innovative, socially responsible and cost-effective approaches to expanding and/or improving access to the safe, reliable, and energy-efficient supply and use of electricity, especially in mega-cities.
Analysis concluded that actions and investments yield very attractive results. The affordability of electricity improved substantially due to reduction of energy losses by installing energy efficient appliances and lighting, re-wiring of homes and other measures. People in the community acquired a sense of citizenship.
Figure 10: Urban favela in Sao Paolo
In a first step, AES Eletropaulo worked with community leaders on the scope and scale of the project. Meetings were held with the community to educate about the program. Door-to-door visits were held by community “agents”. Connections were identified, registered and numbered.
Mini-audits and a customer satisfaction survey were conducted. The distribution network was upgraded and connections metered. Households were not charged a connection fee and any debts owed were forgiven. Key was the use of new technologies to reduce theft, improve energy efficiency and reliability. These included bi-coaxial cable, electronic metering for large commercial consumers, replacing overloaded distribution transformers with energy-efficient models using higher amounts of copper winding wire.
496 houses were rewired to code or better-than-code (for homes: 2.5mm2, with 4mm2 for supply of electric water heating) saving 11kWh / month, but mainly guaranteeing safety by eliminating electrical fires and accidental injuries and deaths.
All partners ensured a coordinated approach to design and implementation. The utility picked up the bulk of the costs and with ICA purchased new refrigerators. ICA also arranged for efficient transformers and support from DT manufacturer Itaipu, and for anti-theft coaxial distribution and service cables and building wires. USAID covered the cost of the community campaign, audits, post-project surveys, and cost-shared compact fluorescent lights with Eletropaulo.
The total investment reached US$1.9 million. Financial analysis showed a simple payback period of only 1.5 years. The energy savings per household averaged 1,200kWh per year, or a 40% reduction. Streets feel safer at night, hazardous conditions in rewired homes disappeared, electricity consumption became affordable, and community satisfaction was high.
As a result, AES Eletropaulo rolled out the program to over 1 million people and continues to do so. Where rates of payment were as low as 2%, they now reach 88%, making the to-date $90million investment profitable. Brazilian regulator ANEEL also proposed to replace 10 million inefficient refrigerators. These actions create a new market for magnet and building wire, and power cable.
In Dakar, Senegal, the main focus is on replicating and adapting the Brazil model. Frequently, the final distribution is a connection known to the utility but installed by the local population, up to 1 km away from the last utility pylon.
This distribution cable enters a utility client's home and is connected to a series of individual meters of other clients, whose houses are situated often a significant distance away from the meters.
The problems are multiple. People and animals risk electric shocks, especially in the rainy season when bare, “recycled” wires are in contact with the wet sand; reduction in voltage often means that refrigeration cannot work reliably and lighting is simply too inconsistent to offer anything but the most limited availability. This supply enters homes into a two-pin socket outlet that feeds the rest of the dwelling’s power needs.
Required are distribution overhead cables and secure and energy efficient drop lines to the home, external earthing protection, complete lighting and power circuitry in homes.
In Sub-Saharan Africa alone, some 15 million peri-urban households are in need of electric installation improvements. ICA works with national and international bodies to implement this program. Models show that total residential energy demand (not just peri-urban) can be reduced by 20%, a major contribution as systems currently cannot supply customers reliably and consistently.
Donor and national electrical safety agencies, cable makers and electrical utilities plan to replicate the model to be developed in Dakar throughout Sénégal, and thereafter to the rest of the region.
3.2 Rural Electrification
One quarter of the global population (1.6 billion people) does not have access to electricity. Over 80 % live in rural areas of the developing world. The lack of electricity deprives people of basic necessities such as lighting and communication, and limits economic activity, education and development.
Since extending the power supply to rural areas is expensive and financially unrewarding, utilities are reluctant to undertake this without massive government support. A total capital investment of over $8 trillion will be needed in power infrastructure through 2030 to meet rural energy needs. Developing countries are clearly overwhelmed by the challenge.
It is with this backdrop that ICA’s India office has sought to develop a self-financing, self-sustainable business model for village electrification that is independent of utility and government investments or subsidies and instead relies on private entrepreneurship and capital.
India’s villages are rich in different varieties of biomass. ICA partners with Decentralized Energy Systems India (DESI Power) to develop a demonstration project for electrification of 100 villages using biomass, a stand- alone mini-grid and energy-efficient irrigation pumps and lighting. The objective is to demonstrate that a truly energy-efficient and low-carbon-emitting decentralized generation with a village distribution is financially viable and can be locally managed.
After the completion of the successful demonstration, the partnership aims to disseminate the lessons to entrepreneurs and institutional investors for replication. The partnership will assist with the creation of bankable business proposals, enable access to finance, use carbon incentives, and advise on the sourcing of technology, plant and distribution engineering, implementation, operation and maintenance.
The first demonstration project in the Baharbari village of Bihar, India is planned for completion by the end of 2009. Successful replication will stimulate a large but dormant market for wires and cables.
3.3 Decentralized Energy
Decentralized Energy (DE), defined as “Electricity production at or near the point of use, irrespective of size, technology or fuel used – both off- and on-grid – includes high-efficiency combined heat and power (CHP), on-site renewable or traditional energy, and industrial energy recycling. There is a wide portfolio of technologies. All renewable energy can be decentralized, as can fossil-fuel-powered steam or gas turbines.
There are significant energy losses in the global electricity system: conversion losses from thermal production, own use of power plants, and power transmission and distribution (T&D) losses constituting about two-thirds of primary energy used in power generation. DE can largely reduce dependence on a complex T&D system and, therefore, T&D losses. On the other hand, in the case of CHP, energy efficiency can be as much as doubled because heat generated as by-product is also utilized.
DE can be a practical solution and economically attractive from high-tech factories to remote and impoverished villages.
Compared to conventional centralized power generation, DE is yet to be developed in the global context. Currently, the global market share of CHP is about 9% and the development is not balanced across countries (fig. 19). There are only a few countries with over 20% of CHP in their total power generation portfolio.
The financial barrier is one of the major one for DE, especially for renewable energy. Policy barriers include government ones that do not incentivize DE and, for example, restrict trading of surplus electricity and connection to the public power grid. Market barriers include limited awareness of technologies and finance options.
Winding wire, power and communication cables are widely used in DE with a much higher density per MW than found in centralized generation. Therefore, the uptake of DE benefits W&C and copper. A three-pronged strategy promotes DE solutions: advocacy of policy changes, collaboration with equipment manufacturers, and education of end-users.
- ICA China works with stakeholders to develop policy incentives for CHP and works with Small Wind Turbine (SWT) manufacturers to promote wind energy for the telecommunication industry.
- ICA supports a Bangladeshi inventor-entrepreneur with the development of efficient small biomass based engines for rural electrification, crucial as 97% of the rural population of 100 million has no reliable access to electricity.
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