Browsing by Author "Phillips, Jonathan"
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Item Open Access Assessing Time-of-use Tariff Deployment For Mini-grids in Sierra Leone(2021-04-28) McNamara, MarieThe declining price of solar energy and the development of reliable off-grid solutions presents an opportunity to embrace the use of community-scale mini-grids to improve energy access. However, solar hybrid mini-grid providers electrifying rural communities in Sierra Leone and across developing economies face difficulties securing energy demand and developing a tariff structure that customers can afford to pay and covers costs. Solar hybrid mini-grids only generate power during the day, and there is a cost disparity between supplying power during the day vs. the evening. Time-of-use tariffs can be a more efficient price structure and could be a means to lower the average cost of electricity for customers. A time-of-use tariff in which the daytime price for energy is less than the evening price of electricity could incentivize consumers to shift some of their energy demand from the evening to the day – when the system generates electricity. This study conducts a financial analysis to quantify the effect of time-of-use tariffs on energy demand, incurred costs, and revenue.Item Open Access Can a Modernized U.S. Development Finance Institution Help Close the Energy Financing Gap?(2018-06-05) Phillips, Jonathan; Girardeau, Hannah; Masters, HarryGovernment-sponsored development finance institutions (DFIs) have become key delivery mechanisms for poverty alleviation and the exercise of soft power. Energy, and the power sector in particular, represents both a leading sector of bilateral DFI investment—more than manufacturing, transportation, health care, and agriculture combined—and a critical enabling sector for broader development that requires significant additional investment in the coming decades. A reformed and fully equipped U.S. DFI would directly provide billions of dollars in additional energy sector investment and would catalyze many billions more in private investment. Such an institution could also expand employment opportunities, in emerging markets and the United States, and enable broader growth. In the process, it would strengthen economic and political ties with U.S. allies and provide an alternative to Chinese infrastructure finance—an alternative that is more transparent, more deeply rooted in democratic institutions, and more market oriented. With earnest and bipartisan consensus building around U.S. development finance reform, this policy brief seeks to summarize the importance of energy sector finance in the context of development and foreign policy, to outline the energy financing gaps in emerging markets, and to analyze how the new tools and authorities proposed under the Better Utilization of Investments Leading to Development Act (BUILD Act) legislation would equip the U.S. DFI to respond to those financing needs.Item Open Access Can Time-of-Use Tariffs Increase the Financial Viability of Mini-Grids?(2022-10-26) McNamara, Marie; Plutshack, Victoria; Phillips, Jonathan; Poindexter, NicoleDeclining solar and battery costs and increased operational efficiency have helped expand community-scale mini-grids, especially in sub-Saharan Africa and South Asia, where they now meet the power needs of over 47 million people. However, mini-grid system economics must continue to improve to be a reliable power solution for a significant share of the nearly 800 million people still lacking access. For rural, low-income communities with generally small power loads and significant demand variations, it can be challenging to align supply and demand while maintaining affordable rates and recovering investment costs. Time-of-use (ToU) tariffs—a rate structure where the tariff varies by the time of day that electricity is consumed—could represent one piece of the solution. This policy brief develops a model to estimate the effects of a ToU tariff on average costs and revenues using data from Energicity, a solar mini-grid operator in Sierra Leone.Item Open Access Climate Finance for Just Transitions: Building Low-Carbon Development Pathways in an Age of US-China Rivalry(2022-09-14) Phillips, Jonathan; Ewing, Jackson; Rao, Abhay; Teji, Liilnna; Plutshack, Victoria; Jeuland, MarcThis paper investigates challenges throughout the international climate finance landscape and recommends pathways for how investments into low- and middle-income countries (LMICs) can more effectively drive low-carbon development. The paper focuses on three issue areas: (1) aligning national climate strategies and international finance, (2) finding avenues for positive climate finance outcomes in an era of growing rivalry between Chinese and Group of Seven—particularly US—public financiers, and (3) reforming major climate finance practices and institutions to more effectively cater to the needs of LMIC stakeholders. This paper is part of a series of work under the New Frontiers in Climate Finance project, led by the James E. Rogers Energy Access Project, which is scoping the challenges and opportunities inherent to climate finance in LMICs, and seeking to help increase the scale and transformational impact of climate finance to these economies. The project aims to mobilize key stakeholder organizations around a common vision for aligning the tools of development finance with the needs and strategies of LMICs, and to build low-carbon development pathways that support poverty alleviation while reducing the next global wave of greenhouse gas emissions.Item Open Access Harnessing the Power of Data: Sustainable Energy Transitions Initiative Conference(2018-06-28) Girardeau, Hannah; Phillips, Jonathan; Jeuland, MarcOn May 15–17, 2018, more than 100 academic researchers and energy access practitioners gathered at Duke University to discuss critical issues related to energy access as part of the third annual conference for the Sustainable Energy Transitions Initiative (SETI). Presentations by Kyle Bradbury of Duke University, Johannes Urpelainen of Johns Hopkins University, Nathan Williams of Carnegie Mellon University, and Jay Taneja of the University of Massachusetts–Amherst highlighted remarkable advances in energy data analytics, described applications for developing world energy challenges, and outlined remaining data-related hurdles impeding progress on energy access. Energy developers, utilities, planners, and policy makers are often not equipped with the necessary tools to understand the changing landscape of energy delivery options and customer preferences. Researchers and grid operators are often restricted by outdated, unavailable, or biased data in the field. Through innovative methods and analytical tools, such as remote sensing, satellite imagery, and machine learning, data analytics are improving our understanding of energy demand in rural areas, customer needs and expectations, the local availability of energy resources, and the realities of providing electricity to underserved communities. These proceedings present key conference takeaways related to the core theme of energy data analytics.Item Open Access Improving Rural Livelihoods, Energy Access, and Resilience Where It’s Needed Most: The Case for Solar Mini-Grid Irrigation in Ethiopia(2022-07-18) Ingram, Matthew; Phillips, Jonathan; Dufera, Hizkyas; Hizikias, Liuel; Jeuland, Marc; Lovedale, JamesEthiopia’s levels of agricultural productivity and energy access are among the lowest in the world. Now Ethiopia is moving forward with the new Distributed Renewable Energy-Agriculture Modalities (DREAM) project to test distributed solar mini-grids as a solution for improving irrigation, increasing agricultural productivity and farmer incomes, expanding rural electricity access, and enhancing gender and social inclusion. DREAM—the largest project in the world of its kind—aims to achieve these outcomes while also demonstrating an approach that can mobilize private investment to deliver scale. This policy brief summarizes the approach, along with findings of an economic viability analysis examining how the solar mini-grid irrigation projects are likely to impact farmers' incomes at nine unique sites in rural Ethiopia. A full evaluation will be conducted over the next three years to understand the broader impacts of the intervention on the resilience of farm enterprises and households. It will further impart lessons for the scale-up of DREAM in Ethiopia as well as similar programs elsewhere in Africa.Item Open Access Lessons for Modernizing Energy Access Finance, Part 1: What the Electrification Experiences of Seven Countries Tell Us about the Future of Connection Costs, Subsidies, and Integrated Planning(2020-05-01) Phillips, Jonathan; Plutshack, Victoria; Yeazel, SethCountries facing electricity access challenges today have more options and potential electrification pathways than ever before. Technology developments in distributed renewable electricity systems, monitoring and payment systems, and end-use equipment efficiency have made off-grid electricity systems the lowest-cost and most expedient option for the majority of unconnected rural populations. However, the initial cost of connecting new rural customers remains an expensive proposition, and public financing that addresses the affordability issue will be required for most countries to achieve universal access, just as it always has. This brief explores the successful rural electrification experiences of seven case countries—Brazil, Chile, Laos, Peru, South Africa, Thailand, and Tunisia—looking specifically at the cost of connections and how subsidies and public financing were deployed to address the affordability challenge and facilitate energy access. The analysis finds that connecting rural customers has been costly—more than $1,500 per connection on average—far more than the cost of distributed systems today. The rural electrification programs examined subsidized 70–100 percent of connection costs. Maintaining these public investments and adapting funding mechanisms to address the unique nature of the off-grid sector, will dictate the extent to which distributed systems are able to scale in the coming decade.Item Open Access Lessons for Modernizing Energy Access Finance, Part 2—Balancing Competition and Subsidy: Assessing Mini-Grid Incentive Programs in Sub-Saharan Africa(2020-12-15) Phillips, Jonathan; Attia, Benjamin; Plutshack, VictoriaRapid technology development and falling hardware costs have made mini-grids a potentially game-changing platform for enabling universal electrification. With the capacity to power commercial and industrial loads and provide 24/7 service, mini-grids can bring reliable grid-level service to places that are unlikely to be serviced with a stable connection in the near future. Of the roughly 800 million people globally without access to electricity, mini-grids could represent the least-cost option for meeting the electricity needs of 490 million by 2030. In response, governments and development partners are putting in place support programs to accelerate the scale-up of mini-grid deployments. These support programs aim to reduce risk and improve returns for private developers and lower connection costs for rural populations. This policy brief summarizes a review of 20 such mini-grid incentive programs in sub-Saharan Africa, 17 of which are still being implemented. The programs analyzed primarily used one of two mechanisms to stimulate investment: auction programs that invite developers to submit bids for the construction and, in most cases, the operation of mini-grids at specific sites, typically awarding an up-front capital subsidy to the selected developers; and results-based financing (RBF) programs that have a set subsidy per connection that is paid to developers after verification that a household or business has been connected.Item Open Access Profits and Productivity: Stimulating Electricity Demand in Low-Income Settings(2019-06-03) Plutshack, Victoria; Phillips, JonathanAs electricity companies in low- and middle-income countries move deeper into rural regions, the cost of new connections generally increases while the electricity demanded by these new customers remains lower than urban and peri-urban customers. This is a challenging dynamic for utilities looking to sustain their financial health as well as for governments tasked with engineering viable strategies for achieving universal electrification. Off-grid platforms like solar home systems and minigrids have entered this market, developing innovative approaches to serving these populations that promise to scale up to help meet the needs of the one billion people around the world still lacking electricity access. The creative partnerships and complementary services these off-grid providers are pursuing provide important lessons for larger utilities. Yet the primary driver for new electricity connections—the grid—will continue to play an important role in closing the access gap, especially in places where serving commercial, industrial, and other productive loads is a priority. Countries with national utility companies facing massive debt, stagnant revenue, and overcapacity must develop strategies for maintaining fiscal health, ideally in a manner that facilitates rural income growth and development. This brief provides a snapshot of the relevant demand-stimulating lessons learned in the off-grid space as well as those that have been pursued by governments and utilities in the past order to help answer the critical questions: What is preventing rural customers from increasing their electricity demand? How can governments, utilities, NGOs, and companies come together to foster the greater use of energy services?Item Open Access Research Agenda on Electricity Access and Productive Use(2019-04-04) Jeuland, Marc; Morrissey, James; Phillips, JonathanOn February 21, 2019, Duke University’s Energy Access Project and Oxfam cohosted a meeting of approximately 60 energy practitioners and researchers to discuss the role of electricity access in spurring productive use. A motivation for this convening was a paper, produced by Oxfam, which had been confounded by the mixed findings on the impact of electrification on productive use. This note provides a summary of the research agenda that emerged from these interactions.Item Open Access Resilience Monetization and Credits Initiative: A Background Paper(2024-05-23) Al-Mashat, Rania; Jeuland, Marc; Puri, Jyotsna; Vieira, Pablo; Aboulatta, Mahinour; Ahmad, Saib; Chowdhury, Jahan-Zeb; Diaz-Herrera, Alejandro; Elsharief, Mirna; Farghal, Farida; Phillips, Jonathan; Tawfik, Nada; Teji, Liilnna; von Glahn, DrewAddressing climate change requires urgent and innovative action aimed at both mitigating its effects and addressing its most severe impacts. However, current investment levels are insufficient to match the escalating climate risks and damages. Despite the annual target of $100 billion established at the 2009 United Nations Climate Change Conference/Conference of Parties, climate finance directed to low- and middle-income countries continues to lag behind stated goals. Adaptation efforts are especially underfunded, with investment falling short by a significant margin, estimated at 5 to 10 times the actual need. This document has been developed as part of an endeavor to propose an innovative solution—the Resilience Monetization and Credit Initiative— aimed at bridging the gap in resources made available to those most urgently in need of climate adaptation finance. Under this initiative, resilience credits are introduced as a novel asset class designed to align public and private capital to deliver improved resilience to the communities most vulnerable to climate impacts, while also ensuring equitable benefit sharing. This paper is part of a series of work under the Resilience Monetization and Credit Initiative project, led by the James E. Rogers Energy Access Project, which aims to close the finance gap for those urgently needing climate adaptation finance by developing innovative methods to measure and monetize adaptation and resilience benefits.Item Open Access Smart Microgrids to Improve Reliability and Resiliency of Power Supply in the Southeast(2023-05-01) Pumarejo Villarreal, Jose Eduardo (Puma)Extreme weather events in the Southeast have frequently caused significant damage to the power grid, leaving millions without electricity for extended periods. Despite substantial investments, vulnerabilities stemming from the centralized nature of the system remain unresolved. However, the implementation of decentralized smart microgrid technology presents a potential solution to mitigate the impacts of extreme weather events and enhance power supply reliability and resiliency. Microgrids, which consist of interconnected loads and distributed energy resources, can operate in coordination with the main grid or independently. Each microgrid requires a customized approach to design, installation, and management. Although smart microgrids can improve power supply reliability and resiliency by up to 60%, their high costs often render projects financially unfeasible. To accelerate the adoption of microgrids in the Southeast, clear state-level regulations, standardized guidelines for electric utilities, and economic assessments of resilient infrastructure are needed. Additionally, exploring the establishment of a Southeast ISO could facilitate the replication of successful practices from regions like California, Texas, and New York.Item Open Access Sustainable Microgrid Development for Productive Use(2020-04-24) Kara, Njeri; Lins, Edward; Valaik, ConnorProductive use of electricity - the use of electricity for income generating purposes - is a key driver of long-term electrification and economic growth in the developing world, and, in particular, Sub-Saharan Africa where hundreds of millions of individuals are predicted to lack electricity for years to come. Productive use also promises to bolster the financial viability of microgrid developers who seek to provide electricity to those who would otherwise lack electricity over the coming years. The client of this project, Zambia-based microgrid developer Standard Microgrid, is seeking to understand if productive use of electricity may offer a viable option for increasing their revenue. This project aims to provide a baseline understanding of the current state of productive use on its microgrids by comparing productive use customers to consumptive use customers - customers who do not use the electricity for productive uses. In particular, the project answers two key questions: 1. Do productive use customers pay more per unit of electricity consumed? 2. Do productive use customers pay more frequently? Answering these questions provides the client with helpful information regarding whether productive use customers perform better than other customers and also informs areas where they can improve their strategy to better maximize the revenue from these customers. This project leverages datasets provided by the client to answer the key research questions. These datasets include information regarding their customers and their appliance subscriptions, sales made to these customers, and the customers’ electricity use. In order to answer the research question, the customers were categorized as productive use or consumptive use customers based on assumptions driven by the types of appliances each customer was subscribed to. An additional category, productive potential, was added to account for errors in this methodology. Several confounding factors like the location and age of the microgrid were also included in the analysis. Several multiple linear regression models were created and analyzed to answer the central research questions. The models found that productive use customers do not pay a significantly different amount for every unit of electricity they consume but they do appear to pay more regularly. Productive use customers pay more for a day of energy, however, since they consume much more energy per day than consumptive customers, the rate they pay per unit of electricity is not significantly different. Notably, though, productive use customers purchase more days of electricity with every transaction. This finding in addition to the fact that productive use customers consume much more electricity shows that productive use customers offer more reliability as customers. Based on the promising findings showing some indication that productive use customers may perform better than other customers, the following recommendations were made to the client: 1. Consider raising rates for productive use customers as they could potentially be able to pay more as they also derive value from the electricity use. 2. Pilot a survey to further analyze current productive use customers and also identify new productive use customers as well as new productive use applications.Item Open Access The True Cost of Solar Tariffs in East Africa(2019-02-05) Fetter, Rob; Phillips, JonathanOver a billion people around the world continue to lack access to basic electricity, many of them unlikely to be connected to the grid for years or decades. Pay-as-you-go solar home systems (SHS)—kits that consumers can frequently purchase on credit that include a small solar panel, battery, light bulbs and wires, phone charging equipment, and sometimes televisions and other appliances—have quickly become a viable, private sector-driven solution that empowers consumers to take control of their energy future. Many low- and middle-income governments look to import duties and value-added taxes (VAT) to fund critical government services and the bulk of SHS equipment is produced in China. As sales of systems have grown, the question of how these systems should be treated under border taxation regimes has become a prominent issue. To better understand the trade-offs at stake, actual sales data for 700,000 units of solar home systems was collected from Uganda and Kenya, countries with vibrant SHS markets and where the border tariff debate looms large. The data was analyzed to measure the price sensitivity of consumers of two different SHS product lines in order to better understand the impact of tariffs on system sales as well as broader ramifications for households, electrification goals, and government revenue. More about this project can be found on the Energy Access Project site.Item Open Access Utilities 2.0: Analyzing Customer Lifetime Value and Customer Transfer for a Novel Electrification Partnership(2021-04-27) Reichardt, Ian; Rosenthal, IsaacAbout ten percent of today’s global population lacks access to electricity. Distributed energy resources (DERs), however, have the potential to deliver the benefits of energy access, which include increased productivity and improved education, to energy impoverished communities located outside of centralized electric grids. Power for All, an international non-profit organization, is developing a novel business partnership model, called Utilities 2.0 (U.2.0), to harness the comparative advantages of both centralized electric utilities and DER developers to identify the least cost, quickest path to universal electrification. This study supports the U.2.0 pilot program launching in Uganda. We analyze the policy and regulatory landscape to identify gaps and drivers in facilitating the transfer of customers from DER developers to the country’s utility, Umeme. We also developed a Customer Lifetime Value (CLV) model for the U.2.0 business model to measure the value add of the U.2.0 program compared to a typical grid expansion scenario. Our study identifies current policies and makes recommendations to improve customer transfer between U.2.0 partners and finds that the U.2.0 model can increase CLV at Power for All’s pilot site in Uganda.