Who Profits from Energy Projects? Scaling Sustainable Economics of Energy

Jyrki Luukkanen

Contents

• Energy for whom• Energy by whom• Scaling of energy projects

Energy for whom

• Energy for poor– Basic needs

• Food – cooking• Water pumping

– Education• Light for evenings• TV, radio, VHS, DVD

– Communication• Mobile phones

Energy for whom

• Energy for business– Income generating

activities– Employment

generation– Energy as a driver

of economy– Trickle down?

Energy by whom

• Household supply– Who decides the system– World Bank?– Other donors?– How it fits the present

market system– Would the same

investment lead to better results in some other target area

Energy by whom

• Small enterprises and Cooperatives– Energy supply should become normal

business, which does not need aid money

– Economic sustainability crucial– Is the interest rate too

high to promote ’normal’ business

Scaling energy supply

• What is the optimal level of energy supply– Household level– Village level– Several villages– Larger scale

Scaling energy supply

Decentralized systems• Small is not always beautiful• Scale of optimal energy system depends on

circumstances• Bottom-up optimisation

does not lead to larger scale optimisation

• In income generating activities reliable supply of energy may be first priority

Scaling energy systems• Sometimes large scale

system may be optimal• Sometimes smaller scale

system may be optimal

Scaling energy systems• Technology may

determine the optimal scale of the system– Biomass based electricity

production does not function in very small scale – ten villages could be better than one village

• Availability of skilled operators and workers, spare parts, economics of scale, reliability of supply

– Photo Voltage is not good for rice mill but ok for TV

– New technology development may change situation

Scaling requires integrated planning

• Integrating energy planning with other sectoral planning– Industrial planning– Transport planning– Forestry planning– Agricultural planning– Environmental planning– Education planning– Poverty reduction

• Prioritizing– Strategy building– Short and long term

perspective

Thank you

Jyrki LuukkanenTulevaisuuden tutkimuskeskus

Turun kauppakorkeakoulujyrki.luukkanen@tse.fi