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Pitch

Replacement of open fire stoves with improved cookstoves can reduce indoor air pollution & can cut the amount of GHG emissions significantly


Description

Summary

About 75 percent of Nepal’s population (4 million out of 5.43 million households) use solid biomass (firewood, cattle-dung, or agro-waste) as their primary fuel with traditional cookstoves (WB Report). Clean cooking solution is very important from the perspective of indoor air pollution reduction, impact on health, energy efficiency improvement, climate change mitigation, forest management, gender equality etc.

It also has a great potential to reduce carbon dioxide emissions and can lower 2–4 tons CO2 equivalent per cookstove per year under the right conditions compared to the emissions from the open fire stove. Biomass is by far the most used primary energy source in Nepal, accounting for over 80 percent of all energy consumed.

 

Fig. 1 types of typical cook stoves used in Nepal (Picture Credits for the second picture: AEPC Nepal)

Nepal’s reliance on solid biomass is expected to continue till 2030 and even under the most optimistic scenario, 55 percent of households will still use the solid biomass as their primary fuel source in 2030. 

Fig. 2 Cooking fuel use by households in Nepal (CBS & UNDP 2014)

Fig. 3 Cooking sources in Nepal (Population Monograph of Nepal, 2003 and 2014)

To develop clean cooking solutions and attract private investors, it is important to understand cooking behavior, the availability and cost of fuel sources, cooking technologies adopted among the various geographical areas, and income groups in Nepal. Capacity development of stakeholders on clean cooking solutions is also an essential aspect of sustainable energy promotion this is why we aim to provide capacity building trainings to the recently elected officials in local governing bodies (mayors / chairpersons, deputy mayors / vice chairpersons, ward chairpersons and members of ward committees of municipalities and village councils), cook stoves users, people from public and private sectors etc. to bring sustainable energy solutions and provide access of clean energy to all.


Is this proposal for a practice or a project?

Project


What actions do you propose?

Although improved cookstoves has been a hot topic for more than a decade, we have witnessed few progress on the distribution of ICSs to the end-users, and it is even more evident in the Nepalese context. Data from the governmental sources show that about 3.75 million households are potential customers of ICS but only about 0.7 million ICSs have been distributed so far and among them most are of mud-stoves. These mud stoves have lower efficiency compared to metallic ICSs available in the global market but most of the potential customers in Nepal cannot afford it due to its higher costs. Besides, the mud-stoves are not much durable compared to the metallic ICSs. Our objective is to introduce and implement innovative approach on development, distribution and co-financing rather than claiming governmental subsidy for ICSs. This will establish a much sustainable and economically viable practices in clean cooking solutions in developing countries.

The proposed program will have three primary components:

A. Development of ICS

There are varieties of ICS available in the market and the cost varies from US$ 25 to US$ 75. We have found that most of the ICSs currently used in Nepal are manufactured locally using mud, bricks and iron rods. They are also quite heavy, and less efficient than that of ICSs available in international market. This is why we aim to collaborate with a foreign partner who could design more efficient, sexy, light weight, affordable, easy to use and durable cooking stove through benchmarking of recently available ISCs. In collaboration with our Korean partner, Ecoeye, we are designing a prototype ICS named “E-POT” which will be made of mainly stainless steel and will have about 30% efficiency. We expect our ICS will be a very innovative product in global ICS market and can attract not only the end-users but also policy makers in sustainable energy sector. Like the Tesla Model 3 became an innovation in the existing auto industry, we also aim to design the ICS differently in the existing ICS industry. Following is the design of our prototype ICS.

Fig. 4 Design of the Prototype ICS

We believe our business partnership with Ecoeye will make us able to develop an appropriate ICS model not only for Nepal but also for many developing nations throughout the world. We are currently discussing with our overseas partner about the project modality in Nepal as well as its further extension mainly in Bangladesh and India.

B. Dissemination and Distribution of ICS

A huge number of population who are using traditional open fire stoves are still not aware of the ICS technology and its benefits so we will make them aware and demonstrate the technology by the following means:

i. Village-level ICS demand creation and supply campaign

There are 75 districts in Nepal which consists of 4 metropolitan cities, 13 sub-metropolitan cities, 246 Municipality and 481 Village Councils. At the initial phase, information on existing cooking practices will be collected from selected District Climate and Energy Committees and some strategically located Village Councils (VCs) and Municipalities will be selected for further process concerning to the ICS project. In each VC and municipality, we will organize ICS demonstration campaign in presence of Mayor / Chairperson, Ward Chairpersons, local leaders, stakeholders etc.

The ICS demonstration workshop will be designed to create demand for ICS through a focused marketing program that includes participatory exercises highlighting:

  • The role of energy in economic prosperity, health, education and gender
  • The economics of current energy use patterns
  • Alternative energy options for rural poor families and their economy
  • Practical use of ICS models with hands-on exposure

The imported ICS will be displayed and demonstration of cooking will be made to raise awareness of the end-users and local leaders.

ii. Promotion of ICS during local programs and festivals

Nepal is a culturally very rich nation and many different festivals are celebrated by different ethnic groups. Local Haat Bazaar (a temporary market organized by villagers seasonally) is also popular in many villages in Nepal where people from local villages sell and buy various goods they need. This is one of the best places to organize mass demonstration and promotion of the ICS. Our ICS experts will promote the imported ICS via mouth-mouth, printed materials and videos presentation.

If possible, participants will be asked to complete a simple questionnaire that will help us to identify consumer preferences with regard to ICSs.

iii. ICS Information campaigns with Local Government

It is very essential to have a good relationship with local government representatives to achieve the desire result through public private partnership so we will organize trainings or capacity building workshops for local governments with the objective of;

  • To create awareness on the scope of biomass use and prevent forest degradation
  • To promote the advantages of ICS use for economic and environmental benefits
  • To promote and / or manage the budgets by the local authority for the implementation of programs related to clean cooking solutions
  • To make them aware of the importance of proper and regular use ICS not only for users’ benefits but also for emission trading viewpoints
  • To create network among stakeholders of ICS

C. Registration of ICS CDM PoA in UNFCCC and trading CERs

Clean cooking solutions have a huge potential to reduce carbon dioxide emissions, saving as much as 2–4 metric tons CO2e emissions per cookstove per year. Given the essential benefits to human health and the global environment (to sustainable development), clean cookstoves can seek climate finance funding, particularly from international development agencies and private parities (mitigation project developers). Given the ambitious target set by the government under CCS4ALL and the existing investment gap for achieving them, it is vital to mobilize climate finance to catalyze adoption of clean cooking solutions in Nepal.

We are discussing with a Korean firm about project funding mechanism to provide the ICS to the end-users and economic benefit to the funding agency. We do not intend to implement the project by receiving a heavy subsidy from the government rather we aim to create a successful business model that could bring win-win situation among ICS stakeholders. We have realized that the major reasons of ICS project failure in many cases are not technologies themselves (although, in our case, we are still willing to implement innovative product design strategy for our future ICS) rather it is the project financing mechanism. Federal subsidy can promote the project only in some extent, thus an appropriate business model is very essential to make the project sustainable.

We are familiar with the Korean emission trading scheme (KETS) which is now one of the best markets to trade carbon credits. One of the important provisions the scheme to use the foreign carbon credits in the KETS is the participation of Korean party in the climate change mitigation project implemented abroad. We will make sure the involvement of the Korean firm in this project and register it in the UNFCCC as a CDM PoA. The carbon credit thus generated would be traded in KETS which will in turn generate a co-financing opportunity for this business and also give economic benefit to the project investor. Our estimation shows that the project would be economically sustainable without any subsidy from the government. It may require minor financial support in the form of subsidy from the government only in the worst case scenario (i.e. only if the CER price in KETS dropped significantly from the current price).

We also expect that the affordability of the end-users will increase due to the income generated from selling the firewood saved through the use of efficient ICS. Mass production and well managed supply chain will also assist us to reduce the price of the ICS by bringing the price lower than we have expected at the moment.

The barriers we expect and our strategies to overcome them are (most of them are explained in other sections too and are presented here in brief for a quick review);

i. Political instability – Political instability in the central government is being a major hurdle for various development activities. Local election held recently (after 20 years from the last local election) has given a stable local government. ICS programme will be implemented in local level so we will work closely with local authorities, communities, local organizations, etc. so we expect the instability in the center will not have any significant impact on our project activities.

ii. Innovative and germane technology – Most of the ICSs distributed to date in Nepal are made up of mud, bricks and iron rods. They lack state of arts technology, and they also have low efficiency (about 20% or below), are not durable, are not attractive, are hard to use etc. Few imported models are available in the market but they are still out of reach of the end-users mainly because of higher costs and lack of awareness.

To overcome these challenges, we will organize several awareness campaigns and capacity building training programs in collaboration with local authorities, CBOs and stakeholders, and we believe this will be helpful for changing the concept of local people towards ICS. The ICS we are supposed to distribute has attractive design, light weight, is more efficient, is easy to use or handle, portable etc. These characteristics will give a positive impression to end-users as well as to local authorities.

iii. Cost of the ICS – This is one of the major issues that hinders successful implementation of ICS project. Although locally made ICSs are comparatively cheaper, people are not attracted to them because of cheaper quality. Imported ICS costs from around USD 45 to USD 80 which are out of most people’s purchasing capacity and there also lacks of sufficient marketing. We will introduce an attractive financial mechanism to reduce the financial burden of end-users through the assistance of carbon finance. We will provide a heavy discount on ICS price which the project developer will reimburse by trading the CERs generated after registration of the CDM PoA. We will also create a mechanism to make the replacement of used ICS after its lifespan in even more reduced price. It would be possible because of the revenue generated by the replaced ICS and through implementation of better plans and strategies learnt through experiences. We are optimistic that the production cost of ICS will also decrease in future like it happening in solar industry. Besides, as mentioned earlier, mass production of ICS and green supply chain will also reduce the cost of the ICS.

iv. Distribution system – Yet, the distribution of ICS is carried out predominantly by the project owners themselves. This knowingly or unknowingly neglect the involvement of local authority as well as local CBOs and it ultimately retards the project progress. We will carry out the same task differently by making sure that none of the stakeholder is left behind or ignored in this vital activity. Bottom to top approach where local communities and CBOs will create the demand of ICSs, inform it to the local authorities and we will provide the required number of ICSs to the local authorities and the communities. Involvement of the authorities and communities in the project activities will assist them to take project ownership responsibility. Information will be disseminated by media on benefits of using ICS as well as various events related to ICS which we believe will significantly increase positive response towards the project. Online portal will be created for Inventory management, demand for new ICS, after services etc., and it will be operated in collaboration with the local authorities and communities.


Who will take these actions?

Climate Advocacy International, a youth driven non-profit organization established by a group of experts in various sectors, will carry out required activities to launch and manage the project in cooperation with governments, intergovernmental agencies, development partners, public and private sectors, INGOs, NGOs, CBOs and local people.

We have the following working strategies:

Assistance / Partnership in action program:

Climate Advocacy International provides support services and motivates local community members as well as local authorities to participate in technology need assessment, project development and proper utilization of the technology. We work in partnership with technology manufactures, promoters and end-users to implement, install and evaluate action programs effectively.

We aim to make sure the involvement of local governing bodies, security forces etc. in the project activities specially on distribution of ICSs through the application of various strategic initiatives such as “Green Authority”, “Green Arms”, “Green Forces”, We are Green” and “Clean Green and Healthy Administration” which, we believe, will surely play a positive role on reducing the project cost down, making the supply chain stronger and enhancing the value of this project.

Training and workshop:

Climate Advocacy International in collaboration with our overseas partner and local authorities will provides necessary trainings to project staffs, organizations, authorities, grass root community leaders and promoters to develop and enhance their technical capability. We also encourage the communities to organize the workshops themselves in cooperation with local governing bodies where climate advocacy international will provide technical and in-kind supports. This is very essential to enhance their project ownership.

Technical Support Services:

Climate Advocacy International provides technical services to governmental organizations (GOs), stakeholder, non-governmental organizations (NGOs), and community based organization (CBOs) as well as the end-users for installation, promotion and dissemination of appropriate technologies. We will create an information pool through which the communities on one hand can themselves share technical information and on the other hand, we can provide required technical support such as maintenance or after service promptly.


Where will these actions be taken?

The action will be first taken in Nepal with possible extension in later stage to other South Asian nations (mainly Bangladesh and India). There are 75 districts in Nepal and we will implement the project in all districts by coordinating with District Climate and Energy Committees, municipalities, village councils, local NGOs and CBOs, local communities, private sectors and international development agencies.

To facilitate the project, we will first conduct capacity development trainings and awareness raising campaigns in three selected districts, i.e. Lamjung, Tanahun and Gorkha. The first Component Project Activity (CPA) of the proposed CDM PoA will also be launched by incorporating the ICSs distributed in these three districts. These are hilly districts and significant portions of the population in these districts still use traditional cooking stoves which consume large amount of firewood and produce much smokes.

Fig. 4 Districts of Nepal where the first CPA will be implemented

The program will be extended to other districts in the later stage and we will develop second, third and more CPAs to generate more carbon credits.


In addition, specify the country or countries where these actions will be taken.

Nepal


Country 2

Bangladesh


Country 3

India


Country 4

No country selected


Country 5

No country selected


Impact/Benefits


What impact will these actions have on greenhouse gas emissions and/or adapting to climate change?

The program will have economic, health and environmental benefits, and it will contribute significantly on United Nations’ Sustainable Development Goals. The Government of Nepal expects that about 3 million traditional cookstoves will be replaced by ICS by 2030. It is found that a 20% efficient ICS can reduce about 2 tCO2e emission per year in comparison to that of the emissions while using traditional stoves. The efficiency of the ICS that we have proposed for the project will be around 30%, and in the worst case scenario too, a total of about 6 million tCO2e or CERs can be generated each year if the governmental target to replace traditional stoves is met.

Table 1: Number of households using firewood and cow dung by ecological belt (AEPC & WB Report) 

Our ICS programme aims to distribute 1 million ICSs and we expect to generate at least 2.5 million CERs each year, although our estimation shows that the number of CERs to be generated will be around 3 million each year after distributing the targeted amount of ICSs.


What are other key benefits?

Compared to the conventional open fire stoves, ICS will have following benefits:

Environmental and health benefit

  • According to the World Health Organization about 4.3 million people die each year (8,700 premature deaths in Nepal alone, WHO 2009) from illnesses related to indoor air pollution and the main cause of indoor air pollution in developing world is smokes from open fire stoves. It mean’s cooking kills people. Distribution of ICS to low-income families reduces indoor air pollution and helps to improve people’s health condition specially of children’s and housewives’.
  • Fire hazard in the kitchen is a common problem in rural areas where open fire stoves are predominant so ICS reduces such hazard.
  • ICS consumes few fire woods than traditional fire stoves, so it plays a significant role to stop deforestation.
  • It helps to reduce greenhouse gas emissions significantly.

Socio-economic benefits

  • In rural areas the girls and women usually spend many hours to gather firewood. Use of ICSs cuts consumption of firewood and hence ease the burden of the girls and women to collect firewood, cook and doing dishes, and enhance gender equality.
  • Increases participation of men in kitchen work because of easy to cook and clean environment.
  • Development of ICSs is an innovative work which promotes research and development and it also creates jobs in renewable energy industry.
  • It also avoids conflicts related to collection of firewood in rural areas and people who are compelled to spend time for gathering firewood can engage other economic activities such as agriculture and farming which helps to increase the family income.


Costs/Challenges


What are the proposal’s projected costs?

The estimated cost of the programme for distributing 1 million ICS and CDM PoA registration is about USD 65 million. It includes USD 55 per ICS cost plus USD 10 per ICS for CDM PoA registration and management cost. It also requires additional cost for capacity building and raising awareness.

This project will be developed as a CDM PoA which can attract co-financing from sales of the CERs. The current CER price in EU market is almost zero so we are negotiating with project developers in Korea for better price where the CER price is around 10 USD / CER. There are certain provisions to trade the CERs from overseas projects in KETS which we will fulfil by implementing the project in partnership with a Korean company. We will keep our best efforts to reduce the price of ICS as much as possible by considering various means mainly through mass production, efficient supply chain, collaboration with governmental bodies in distribution system, utilizing corporate social responsibility funds and other co-financing options so that we will be able to provide the ICSs to the end-users in a cheaper price. Government of Nepal provides a maximum of USD 30 per ICS as a subsidy but we do not intend to claim any subsidy from the government rather we propose a business model which would generate additional revenue and make the project sustainable without governmental subsidy.

After distribution of 1 million ICSs of around 30% efficiency, it can generate at least 2.5 million CERs each year and if these CERs are sold at the rate of USD 5.5 (about half the current price of CER in KETS), it can generate USD 13.75 million co-financing each year. The technical lifespan of a ICS would be about 5 years so a total of USD 68.75 million can be generated from CERs trading alone and makes the project financially attractive. In the best case scenario, the total number of CERs will be around 3 million and the CER price will be around USD 10 per CER, and in this case a total of USD 150 million revenue can be generated through CERs trading, which means more than 100% profit on investment. We are optimistic that the cost of ICS will reduce in future because of technological innovation, mass production and efficient project management practices to be gained through experiences so the project in a long run can generate positive revenue even in the worst case scenario and makes the project economically viable.


Timeline

The prototype is almost finalized and negotiations with manufacturer and co-financing parties are already in progress, and we hope to finalize it within 2-3 months. We are also carrying out ICS market analysis and needs assessment so we expect the project development will not take more than 6 months.

A pilot project in which about 5000 ICS will be distributed in the first round in the selected districts and it will be then registered as a CDM PoA in the UNFCCC. The ICSs distribution process is expected to start in February 2018 and registration of a CDM PoA with the first CPA will be completed by August 2018.

The programme of distributing 1 million ICSs is expected to take about 5 years (till December 2022). The life span of a CDM PoA, by the UNFCCC rules, is of 29 years and additional CPAs will be included on the registered CDM PoA each year till we distribute the ICSs but no later than the PoA’s life span. We aim to include all 1 million ICSs to the POA by the mid of 2023.


About the author(s)

Dharma K.C (Mr.), Founder and Executive Director of Climate Advocacy International (CAI - www.climateadvocacy.org) is enjoying working with full of passion in climate change, energy, environment sectors and engaging in development of innovative policies, strategies and plans to support the current and future needs of addressing climate change, energy and environmental issues considering the norms of sustainable development. Graduated in Environmental Engineering (M Sc.) and with about 14 years of international experiences in various capacity, Mr. K.C has learned a lot about emerging global market of energy and environment, focusing for the last 10 years on global climate markets, renewable energy/energy efficiency, green growth, industrial eco-innovation and corporate sustainability development. Besides, as a capacity development specialist, he has already provided more than 250 capacity building trainings, in many developing countries.
Mr. K.C has received sufficient professional trainings from several international agencies.

Prativa Bastola (Mrs.) has completed Master of Science (Environmental). After completion of her Master Degree, she joined in the Center for Energy Studies, Institute of Engineering, TU as a “Researcher cum Trainer” where she conducted a wide range of researches related to feasibility study of renewable energy projects, climate change, technology transfer for GHG mitigation, environmental impact assessment etc. While working in Ernst and Young, Seoul, Korea she involved in various projects such as; Green Growth in Vietnam, Green Industry Mapping Strategy in Indonesia, and CDM methodology development of real time navigation system in Korea. Besides, she also worked as a researcher in Ecoeye, and involved in due diligence of green brick and biomass energy generation CDM PoAs in Vietnam. Currently, as a Programme Manager - Climate Change and Sustainability, CAI, she is taking care of projects related to climate change mitigation and adaptation.


Related Proposals


References

1. Investment Prospectus for clean cooking solutions in Nepal: http://www.aepc.gov.np/docs/resource/subreport/20170522173527_Investment%20Prospectus%20for%20Clean%20Cooking%20Solutions%20in%20Nepal.pdf

2. Biomass Energy Strategy 2017: http://www.aepc.gov.np/docs/resource/rescenter/20170309131259_Biomass%20Energy%20Strategy%202073%20BS%20(2017)_English.pdf

3. District Climate and Energy Plans for different districts: http://www.aepc.gov.np/?option=resource&page=subreport&mid=3&sub_id=22&ssid=23&cat=Carbon%20&%20Climate