Category Archives: Gamos

Africities, 2063, and Time

This is a joint blog by Simon Batchelor from Gamos and Sumaya Mahomed, Professional Officer in Renewable and Energy Efficiency in the Cape Town Municipality.

At the recent Africities conference, some of the SAMSET researchers had a conversation with municipal partners, and this article tries to capture its essence.  Their subject – timescales.

In the development sector, donors, civil society, NGOs, researchers, all tend to speak in terms of 1 to 3 years projects. While the planning processes of logical frameworks and business cases allows for an impact after the project end, there are few agencies willing to commit to more than 3 years. SAMSET is actually a four year project and in that sense quite rare.  Most of the other USES projects were 1 to 3 years. Yet within SAMSET is the aspiration to assist our partner municipalities to gather data, create a state of energy report, to model the future (based on that data), to take decisions and create a strategy for ‘energy transitions’. And, within the timeframe of the project, to take some first steps in that strategy, some actions.

In a slight contrast to this, Africities has as its slogan – “SHAPING THE FUTURE OF AFRICA WITH THE PEOPLE: THE CONTRIBUTION OF AFRICAN LOCAL AUTHORITIES TO AGENDA 2063 OF THE AFRICAN UNION.”. It is looking at 2063!  That is (nearly) a fifty year horizon. Africities knows that municipal planning, changes in infrastructure, raising the finance for those changes, takes decades not years.

SAMSET is funded by UK donors and some of the researchers come from the UK, so lets take the London Cross rail link as an example. First of all, lets remember that the essence of London Underground – the transport system that effectively keeps London working – that the essence was established in 1863 (The Metropolitan Railway, using gas-lit wooden carriages hauled by steam locomotives!). That’s nearly one hundred and fifty years ago. The cross link is a new tunnel that will join east London (the banking and business hub) to west London, and beyond. This tunnel has to go ‘in a straight line’ while at the same time missing existing underground tunnels, water mains, etc. At times it will be created just 1 metre from an existing underground structure.

So its perhaps surprising that it was apparently first mentioned in 1941, was written on a plan in 1943, serious consultations in the seventies, serious proposals in the nineties, commercial proposal in 2001, and decided on in 2005 (10 years ago) and construction started 2009. Despite the huge advances in tunnelling, it will still take another 5 years to complete.

And of course it is only one part of an ongoing dynamic change in infrastructure of one of the worlds leading cities.

So imagine now trying to raise funding for a Bus Rapid Transport system in Polokwane. The changes will require that roads be changed, new lanes created, negotiations with landowners of key areas, procurement of the equipment. It is not surprising that it has taken over 9 years since serious planning started (2006), and that it will take until 2020 before it is fully implemented, with all the associated traffic disruption of road works etc. Infrastructure in cities takes time to change.

SAMSET modelling shows what the energy consumption of a partner city might look like in 2030. It starts with a ‘business as usual’ model and then explores possible changes, assisting the partners to identify a key change that will make a good (low carbon) longer term change. In the case of Cape Town, the municipality asked for projections to 2040, as the felt 2030 was too close. The timescales in municipality minds are of 10 year, 20 year projects, not 1 to 3 year disconnected projects.

gamos.capetown blog growth

Figure 1 Cape Town Growth in energy consumption per sector for ‘business as usual’ scenario.

And consider the energy impact of a building. A building will last 40 years or more, so if planning permission is given to an energy inefficient glass tower, the air-con commitment is there until 2063.

So municipal planning has a very long term view. Of course in a counter flow to this long view of the municipal civil servants are the politicians who have a very short term view. Politicians are often concerned with short term benefits and easy wins, so they or their party gets re-elected.  For city planners it is a difficult balance.

So when we think of energy transitions what is the right timescale? Well in a complex world we have to think of all the actors, their different needs and juggle all of them together. We do need to find early easy wins so that donors to research projects and politicians are happy enough to fund a phase two.  We do need to build capacity so that despite the movement of people from job to job, a municipality gradually gains the required skills to consult, plan and implement longer term energy transitions.  And we do need to have a long term view. Building infrastructure, even building buildings, commits a city to a particular energy path for decades not just years, and so those long term implications need to be taken into account.

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Will Solar Photovoltaics Increase Their Efficiency Soon? / Will Solar Photovoltaics Continue to Decrease their Cost?

Simon Batchelor from Gamos writes below on the potential implications of the rapidly-decreasing price of solar photovoltaic panels, and electricity costs per unit from solar energy. With prices rapidly approaching parity for global average retail electricity, the potential for solar energy to move from an expensive, plant-based energy solution, or a small, household-scale system, to a more integrated and commonplace technology for varied energy services, is increasing greatly. Simon presents two sections below, focusing on the improvements in photovoltaic cell efficiency, and if the decreasing cost trend is to continue and its implications.

Fall-in-solar-prices-chart (1)

Source: renewableenergyhub.co.uk

Will Solar Photovoltaics Increase their Efficiency Soon?

In the past few years solar cells have undergone rapid changes in efficiency and cost. Currently the research being conducted by competing companies is improving the efficiencies and reducing the production cost. The industry itself is growing quickly and due to large scale manufacture prices are decreasing.

One of the ways to reduce the cost of solar cell production is to improve the efficiency of the cells as this enables them to convert more energy from the sun. New efficiency records are constantly being set by the leading companies in solar cell research; these are from the most up to date articles available. The latest breakthrough in solar panel efficiency was in December 2014, a press release from the Fraunhofer Institute in Germany announced that 46% efficiency had been reached with a concentrator (multijunction) photovoltaic system. MiaSolé (January 2014) produces flexible solar panels with an efficiency of 17%, these could have a range of uses that other, more efficient panels could not fulfil. Sharp has been trying to develop cells which can make use of the electrons released on impact with the panel surface, as of June 2014 this project was still getting started but predictions of 60% efficiency have been made if this project is successful. Researchers at Stanford University have been using a layer of perovskite on top of standard silicon as both materials absorb different sections of the solar spectrum, potentially increasing efficiency by 25%. The Economist (Feb 2014) reported that John Roberts of the University of Illinois has also been working on layers within solar cells which could improve the efficiency to a potential 50% by absorbing different parts of the solar spectrum. In August 2014 First Solar improved the efficiency of the CdTe Thin Film cell to 21.4%, 3% higher than their record in February 2013, while this cell has lower efficiency than multijunction ones it has the lowest production cost.

Will Solar Photovoltaics Continue to Decrease their Cost?

price-trend-modules-h Source: europe-solar.de

A study by MIT in 2013 showed that China is currently the world leader at producing low cost solar panels; in 2011 63% of solar panels production took place there. However this study provided hope for the American market that the lead the Chinese manufactures had was based on large scale production rather than a bigger workforce, American manufactures may be able to catch up. Due to over production in China it has been estimated 88 companies have had to close factories particularly in North America and Europe; companies in China have had to merge (Forbes, 2012). Q cells, a leading German research and manufacture company, which went bankrupt and was taken over by Korean company Hanwha (Economist, 2014). Hanwha announced in December 2014 that it was going to merge three companies (Hanwha Q CELLS, Hanwha SolarOne and Hanwha Solar Holdings) to become the global leader of solar cell production with a manufacture capacity of 3.28 GW. Companies in the US and Europe are unhappy with the over-manufacturing approach China has taken, anti-dumping duties are being applied on Chinese imports of solar panels to the US and EU (Economist, 2014). This has angered consumers as it pushes the cost of solar panels beyond an affordable price range. SunPower, the second largest US solar company, is doing well however and in April 2014 beat market predictions.

As with any product the value of solar energy varies due to the demand and production rate; there have been several fluctuations in both of these but currently they are increasing. Early in 2014 the Wall St Journal showed there was evidence for investors displaying renewed interest in the solar industry indicating a possible resurgence after the decline in 2008. This decline was due to over-manufacture in China and subsidy removal in Germany (previously purchasing half of the PV panels produced) resulting in an unsustainable stock price for solar (Wall St Journal, 2014).

Members of the Fraunhofer Institute in 2013 said that at the time the production of solar cells was greater than the demand for them but in the future the demand would outstrip manufacture capacity. Their aim was to start a large scale factory in Europe which could produce high volumes of solar cells in order to make a profit even when the prices dip below 50c/W. In the same article it was predicted that in 2050 the cost of solar energy may be 2 or 3c/kWh and could be the cheapest source of electricity; to provide 10% of the global energy demand there would need to be a capacity of 10,000GW. The International Energy Agency found that early in 2014 the total solar production globally was over 150 GW. There are predicted increases of solar production in many countries in the coming years due to the 2014 UN Climate Summit in New York. India is expected to reach 100 GW in 2022 and the US solar production is expected in double in 2015/ 2016 taking it to 40 GW.

The cost of solar cells will decrease but the decline may be slow as there is a surplus of solar panels and already low prices (Breakthrough, 2013). Between 2008 and 2013 there was an annual growth rate for solar power of 63.2%. Calculations in this article suggest that with a growth of 50% per year (accounting for an increase in global energy use of 3.4%) by 2020 there will be 2,400 GW of solar energy which will make up 8.1% of global energy. The International Energy Agency has predicted that by 2020 16% of global energy production will be solar and supplied by around 6250 GW.

Price projections of solar energy are necessary to forecast the industry growth however in such a dynamic sector these projections are difficult to make. Renew Economy (2013) found that there are differences in the predictions being made about the price of solar power; Citigroup has predicted prices of 25c/W in 2020. The US Department for Energy predicted a cost of $60/MWh by 2020 (at $1/W) whereas the Australian counterpart (The Bureau of Resource and Energy Economics) expected costs of around $140/MWh in the same year. If the targets from the UN Climate Summit in 2014 are met it would have an impact on the solar economy which may not yet have been included in available predictions. There are many price projections and some of them have in the past proved to have been too low. There were predictions that solar PV production might reach 42c/W in 2015 however the most efficient panels available according to ENF (09/01/2015) are Nice Sun PV at a cost of 45c/W. On 7th Jan 2015. the lowest price available per cell was $0.319. The lowest cost panels available are Sun Electronics at 34 c/Watt (09/01/2015).

Rivers, Technology and Society – Dipak Gyawali at the LCEDN Conference, Durham, 23rd – 24th March 2015

Simon Batchelor from Gamos writes on the relevance of Dipak Gyawali’s talk at the 4th LCEDN Conference to the SAMSET project.

I attended an interesting talk by Dipak Gyawali (Interdisciplinary Analysts, Nepal) at the LCEDN 4th Conference, Durham March 23rd and 24th 2015.  Dipak has been both minister of water and minister of energy for the government of Nepal in the past.  Now an academic studying and discussing the water, energy, food nexus, he is best known for his book Rivers, Technology and Society.  He raised a number of points in his talk that seemed particularly relevant to SAMSET.

Nepal is a country with great potential for hydro power and yet it has only 750MW and in recent years is having daily load shedding on 15 hours.  He focused on how long it takes to build a hydro dam, and the complexities of the ecosystem, the role of activists, and the conditionality of the loans.  Indeed he told the story of how he was involved in challenging the bad economics of the World Bank, arguing against a particular dam not from an environmental point of view (against which the World Bank would argue they would mitigate the environment effects, and then 15 years later we would all see that the mitigation didn’t work) but using economics to argue against the massive investment and delayed outcomes – bad economics was a convincing argument.

But arguing against something is not the way forward for a country.  So Dipak gave us some very concrete examples of possible ways forward.  He talked about the emerging role of decentralised electricity, which takes so much less time to plan and implement.  He noted that in addition to the 750MW national grid, there is also 750MW of Diesel (and Petrol) generators, being run by retail outlets, shopping centres and homes!  Where the grid costs 7 to 8 rupees per kWh, the people who feel they need control of their own electric destiny are paying between 30 to 80 rupees for their diesel generation.  This indicates a massive willingness to pay – if it is attached to reliability.  And Dipak pointed out that from first discussions to actual switching on in 2011, the 750Mw of hydro took more than 70 years; the 750MW of diesel has been thought of and switched on in the last 10 years.

800px-Kaligandaki_Hydro

“Kaligandaki Hydro” by Krish Dulal – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons – https://commons.wikimedia.org/wiki/File:Kaligandaki_Hydro.jpg#/media/File:Kaligandaki_Hydro.jpg

So how can we leverage this willingness to pay and this idea of decentralised but reliable electricity?  Of course his example is of carbon based diesel; it would be good if the decentralised reliable energy could come from clean energy.  In Nepal, there are regulatory difficulties in connecting renewables to the grid.  There are 46MW of solar PVs in the country, and studies quoted by Dipak suggest that with a reasonable and a more bureaucratic light feed in tariff, people would install 250MW within 6 months.  His views from Nepal illustrate how ‘business as usual’ can lead to a strange energy landscape, with people paying more than necessary for their energy when a change in policy and regulatory framework could rapidly change the scene.

He also talked about alternative models for funding smaller responses.  Small hydro has not really been very cost effective and yet stepping out of the box and looking at it from different angle can completely change that.  He talked about hydro and transport, and I confess that I thought ‘How is that possible?, how can you link hydro and transport?’.  In Nepal people carry items up mountains by foot, and it can take five hours or more to get goods up to a village. Ropeways can offer an electric pulley transport system. Connecting a hydro to a ropeway can make the hydro economically justifiable, working on the ropeway during the day and then its use for lighting in the evening for the community doesn’t even need to be charged.

In SAMSET we have noted the difference between South African municipalities who buy electricity wholesale and are responsible for and gain revenue from distribution, and Uganda and Ghana where municipalities don’t have such responsibility.  In Nepal, Dipak introduced communitisation of electricity, where communities were enabled to mobilise to purchase electricity wholesale and take responsibility for distribution.  Some 250 communities operate in this way now, and theft of electricity has dropped to zero (since the wholesale has to match the distribution and any community member attempting theft is soon identified and sanctioned).

Interestingly at this point Dipak spent some time on the political economy, noting that almost all sides of the political spectrum do not like the communitisation idea.  The Maoists were said to not like it because it wasn’t through the party system, and the far right didn’t like it because they liked to gift things to the people, in order to get their political support – the communitisation empowered the people outside the patronage system.  Dipak also mentioned that the centralists were lobbied by vested interested to not explore these interesting alternative models!

It was a very interesting talk.  I cannot guarantee I have remembered everything accurately, and numbers may be slightly off, but I felt particularly his focus on decentralised reliable energy, and the willingness of people to pay for reliability, was relevant to all our SAMSET locations.

Shifting the Thinking in Electricity Provision

Simon Batchelor from Gamos writes on smart energy grids, encouraging energy consumer engagement in Africa, and the concept of the “smart consumer”.

It is very interesting reading the European Union’s goals around energy, and in particular the ideas around Smart Energy Grids.  They draw a lot from the works of Rochester Institute of Technology, which has produced the following diagram.

Could Energy Consumers in Africa Become Smarter?
Could energy consumers in Africa become smarter?

There is a move within Europe to make people more aware of energy, and for consumers to make more active choices in their energy consumption.  In general terms, researchers talk about how electricity provision has traditionally been a one directional and always on model.  European households sign up to a utility, and expect electricity to be available whenever they want.  In the UK, for instance, they often pay by direct debit (i.e. they don’t really think about the cost – it goes out automatically from their bank), and 63% of them never switch suppliers.  They ‘receive’ electrical energy, and the majority just don’t really think about it.  When it comes to transport, this is a little more on the top of the mind.  Households may spend considerable time choosing whether to travel mainly by car or commute by train, or bicycle.  While the style of the car, and the speed and space it provides are the main criteria when buying a car, most households will at least consider fuel consumption as part of the discussion.

However, when talking to EDF at ICT4S 2014, an electrical utility that provides for 5 million people in UK, and most of France, they are talking more and more about a model where the household is seen as a manager of energy.  Indeed they are trying to shift their thinking from a one direction model to a more complex multi directional model.  The idea is that households can become more aware of their energy consumption, and even adjust their demand to ‘fit’ the supply.   They can also become co-creators of energy in the system.  For instance, households in UK are installing solar panels on their roofs.  Policy instruments such as ‘Feed in Tariffs’ have made it financially attractive for households to install solar.  This makes them co-creators of the electrical supply.  On remote Scottish islands, communities are supplied with a mix of locally generated energy, both large scale wind and micro scale wind and solar, with a grid based backup.  In this setup, if consumers use devices at a particular time of day their demand ‘matches’ the supply, and the system is more efficient (and produces less carbon dioxide).  This is more than energy efficiency as such, i.e. installing energy efficient light bulbs, which is a passive response that saves energy.  What the utilities are now talking about is an active engagement of consumers and helping people graduate through passive energy efficiency to active energy co-creation and management.

Is this shift in thinking at all relevant to Africa???  In Europe much of the discussion about being active co-managers of energy relies on Information Technology – installing smart meters that the consumer can watch and sensors to make ‘smart’ buildings.  On the surface it may seems ridiculous to ask whether energy consumers in Africa can utilise ICT and manage their energy.  Urban dwellers are constantly struggling with load shedding, they do not have ‘always on’ reliable electrical supplies – they are very aware of the supply and their own consumption.  For cooking they have to purchase charcoal, wood or LPG, and are therefore already making active energy choices.  For transport they often have few alternatives, they have to use whatever public/private transport is available and they cannot afford a car (let alone choose a fuel efficient car).

But as I listened to these European utilities discuss how to change passive consumers into active co-creators, I began to wonder whether Africa actually has a better starting point.  Consumers are very sensitive to fuel and energy pricing as it is often a large portion of their household expenditure.  They already attempt to manage their energy consumption due to the costs.  They are not like UK ‘Direct Debit’ consumers – rather they ‘feel’ their energy bills when they are connected, and they are constantly seeking alternative fuels when they are off grid.  Is there something African policy makers can do to leapfrog Europe and help citizens engage more directly with energy planning, to avoid creating ‘one directional’ utility provision?

Clean Energy Transitions – Can Africa Leapfrog?

Simon Batchelor from Gamos Ltd offers his thoughts on smart technology in sustainable energy, and the concept of “leapfrogging” in energy transitions.

I recently attended the conference ICT4S which focuses on using smart technology to manage energy sustainably.  ICT4S is a series of research conferences bringing together leading researchers, developers and government and industry representatives interested in using Information and Communication Technologies (ICT) as a tool to reach sustainability goals. The 1st ICT4S Conference was held in Zürich and attracted 250 participants from 40 countries. The theme of ICT4S 2014 held in Stockholm was “ICT and transformational change”. ‘Sustainable development needs transformational changes regarding both technology and patterns of production and consumption. This conference explores  and shapes the role of ICT in this process and assess positive and negative impacts of ICT on sustainability. ICT for sustainability is about utilizing the transformational power of ICT for making our world more sustainable: saving energy and material resources by creating more value from less physical input, increasing quality of life for ever more people without compromising future generations’ ability to meet their needs.’

Obviously this conference discusses the high tech end of the spectrum.  There are many actions that can be taken to move towards cleaner, more sustainable energy production and consumption.  Switching off lights to save energy can be done by changes in behaviour – people ensuring they switch the light off when leaving the building.  But humans are fallible, so many technicians propose connecting lights to sensors that switch them off when there is no movement.   This conference spent a lot of time discussing such high tech alternatives – smart buildings that monitored and managed energy.  Even smart cities that mapped where people were travelling to and organised the public transport accordingly.

So for instance, one of the papers talks about smart management of a building in the University of Groningen in the Netherlands.  Their paper “GreenMind – An Architecture and Realization for Energy Smart Buildings” states in the abstract that existing buildings are responsible for more than 40% of the world’s total primary energy consumption (although that seems a very high proportion?). They go on to say that current management systems fail to reduce unnecessary energy consumption and preserve user comfort at the same time mainly because they are unable to cope with dynamic changes caused by user’s interaction with the environment.  So they created a software architecture for energy smart buildings.  Experimental results carried out in the Bernoulli building, a 12.000 square meter building of the University of Groningen, show that the proposed solutions are able to save up to 56% of electricity used for lighting, at least 20% of electricity used for heating while the savings from controlling workstations as well as other appliances are 33% and 10%, respectively. overall, their solution is expected to save up to 28% of total energy consumption in buildings such as the Bernoulli building.

But what relevance has this to Africa?  Well, I listened to their Eurocentric presentations with an ear for Africa, and I was surprised by what I heard.   In Citizen observatories of water: Social innovation via eParticipation, I heard officials from the Netherlands discuss how difficult it is to get people to report problems.  “Advanced citizen observatories can enable a two-way communication paradigm between citizens and decision makers, potentially resulting in profound changes to existing flood risk management processes”.   That is; they have created community volunteers who are willing to report problems!  This has been a problem in the past for Africa, not because people are unwilling to get involved (as is the case in Europe) but because the distance to report a problem was too far.  A broken handpump may lie idle because the community do not have the bus fare to get to the district to report it.  However this is changing.  There are mobile phones and reporting problems can be just a phone call away.  Africa does not need sophisticated websites to collect data on problems, it needs only a willing ear to listen – ears which can be used in face to face conversation or through a simple phone call.

As I sat listening to various presentations, looking for the leapfrog technology; I was surprised.  I realised that what Africa had was a leapfrog society.  Citizens who are willing to talk to each other in community, and to engage with officials IF officials are willing to listen.   The matching of mobile phones and a willing society could result in big data that might really help transitions to clean energy.

Compare the Carbon

Simon Batchelor from Gamos writes on carbon dioxide emissions and the “feel” for equivalence in emissions.

I came across a cool tool/website that tries to help us ordinary humans understand what kilograms of Carbon ‘feels’ like. www.carbon.to

I randomly met the creator who told me that it is the result of a ‘hackathon’, a new type of workshop where people (often technically competent students – geeks) come together, think about a problem, and try to come up with a solution to a small part of that problem straight away, within a one or two day workshop.  The problem they discussed was that most people have no ‘feel’ for what generates a kilo of carbon and how many kilos of carbon each action (such as air travel) or device (such as televisions) generates.

For instance, when we travel one kilometre by car, how much carbon dioxide does that generate?  And perhaps more interestingly how does that compare with say watching television – how many hours of watching television is the equivalent of a travelling a km by car?

Of course the answer depends on how the electricity is generated and whether the car is efficient, or even a hybrid.  However, this little tool found here at www.carbon.to helps us understand in general terms.  Given that it was made by students it has some interesting options – comparing cars with beer, or air travel with tomatoes.

So to end, let me just say I am writing this the day after having travelled for 8 hours on a plane.  How much CO2 did I use?  About 790 kilograms.  I have no ‘feel’ for what 790 kg is, whether it is a lot or little.  However, the app says that 8 hours flying is the equivalent 4,560 miles in a car – about the same as my annual usage.  It is 52,659 km if I used the train – I confess I probably only travel about 400 km a year on trains.  I think for me one of the surprising equivalents is beef.  It actually takes a lot of carbon to grow a kilogram of beef, particularly in Europe where cows are fed crops grown with fertiliser and managed by machinery.  My 8 hours flying is only 134kg of beef – that seems small compared to the 52,000 km of travel I could have had by train.  I could have watched 82,135 hours of television!  And I could have drunk 334,698 cups of tea!

Why Should I Invest, It Doesn’t Produce Extra Income?

Simon Batchelor from Gamos offers his thoughts on energy investment and the concept of “temporariness”.

In his last blog, my colleague Mark Borchers from Sustainable Energy Africa (SEA), highlighted some points from a new book, Africa’s Urban Revolution

The point about attitude to living in a city and investment particular caught my eye.  He said:- “In many urban areas a significant proportion of the population regard their homes as elsewhere, and they subsist in the town or city and send remittances back to their homes, where their heart remains. So while they are present in the city, they are not investing in it. It is unclear what this does to the local economy and the tax base and service delivery demands on municipalities.”

It reminded me of a report I read on the Millennium Challenge Corporation (MCC), created by the International Housing Coalition back in 2007.   MCC at that time was an initiative of US foreign Assistance, and was championing a new approach to development assistance.  They were (I have no idea whether they still are – perhaps someone could help me in the comments section), very focused on Economic Rate of Returns (ERRs) i.e. the increases in income or value added as a result of a project.  The report focused on housing projects and asked the question whether the benefit of improved housing in urban situations could truly be measured by increases in income?    In the same way that the extract from the book suggests that people may not invest in their housing and ‘situation’ because it doesn’t necessarily generate more income for them (preferring presumably to send home remittances that support schooling and agricultural production); so too in this report, the donors and development assistance might also question investment because it doesn’t give an  immediate ‘extra income’ return.

They note that “The ‘benefits’ of well-designed urban and shelter reforms can have repercussions not only on the incomes of the individuals served, but also on the larger economy. There are large positive externalities to improved shelter in terms of health and life expectancy.”  However, the report argued – these benefits may not be captured in traditionally calculated ERRs.  They say “Urban shelter and infrastructure investments may indeed have direct economic benefits such as an increase in the rental value of housing, significant improvements in health, or increases in the productive capacity of the household……investments in urban areas can make non-trivial contributions to economic growth from a macro-economic perspective by adding to productive capacity of the city as a whole. Such benefits are also virtually impossible to enter in an ERR calculation.” (My emphasis).

Isnt this the same calculation those families and households are making?  They know instinctively that if they improve their urban situation, they will have a better quality of life and maybe increase their productive capacity in the longer term – but they also calculate that it won’t directly increase their income, and any ‘investment’ in their housing (or energy demand) has such a long return life (and they might not be around that long), that it is better to send money home to invest in the family’s rural ‘shamba’ or plot.   Indeed, what is interesting to me is that the MCC came up with the same conclusion.  The report says that “in practice many of the projects that have been approved are rural projects. These projects have met MCC’s ERR criteria.”

Mark seems to have highlighted an important point about short term thinking or ‘temporariness’ – something we need to keep in mind as we explore energy investments in urban areas as a part of SAMSET.