Flexibility for payment performance and customer trust

Following my last post about the Escaping Darkness report by CGAP, I’d like to focus on the last chapter of the report, which deals with drivers for payment performance for PAYGo Solar clients.

Among those drivers is flexibility. In the following infographics, CGAP summerized how daily PAYGo models are more flexible than monthly ones and allow for a wider range of repayment patterns, answering the needs of a more difficult to serve market segment.

Source: http://www.cgap.org/sites/default/files/Forum-Escaping-Darkness-Dec-2017.pdf

“I can pay what I have”

Flexibility of daily repayment patterns go beyond grace periods, partial payment, or authorized late payments associated with penalty fees. Flexibility is rather about the customer being allowed to pay what they have when they have it.

They can pay in advance (with a discount for early final repayment) or pay late (this would cut power off but not generate any additional fee). They can pay regularly or pay in lumps depending on their income. After a payment delay, paying again, even a small amount, would automatically turn the power on again, except after a too long payment delay (~90 days) where a sustantial payment would be required.

Such a system is closer than traditional ones to person-to-person loans you would do between relatives or friends. This proximity and simplicity build trust for the customer who is willing to pay but meets unexpected circumstances. It avoids the financial burden as well as the shame one can feel when not respecting their engagements. Ultimately, such a system helps building, growing, and preserving the customer relationship with such a market segment.

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What is in PAYGo solar for customers?

Standing between providing energy access and offering inclusive finance, supported by the development of mobile money usage, solar PAYGo models are a tremendous opportunity for off-grid, poor populations in developing countries, especially in East Africa.

CGAP has dug into the subject and into the customers’ point of view. Here under is a visual summary of the “Escaping Darkness – Understanding consumer value in PAYGo Solar” report‘s key takeaways:

The report is densely illustrated with quotes from the clients that perfectly make the point.

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M-Kopa’s market segmentation for off-grid clients

M-Kopa recently published findings from research led with the help of Shell Foundation and the UK’s Department for International Development. Those researches tackled clients targeted by M-Kopa and Kenya Power and Lighting Company (KPLC) and ultimately led to proposing a new approch of the famous on-grid / off-grid divide by defining new client segments.

Here under is a synthesis of the three new client segments described by M-Kopa:

This segmentation proposition offers a new perspective on client needs and how energy providers, government agencies, and funding bodies can answer them.

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Les applications des objets connectés d’aujourd’hui et de demain dans l’énergie

Dans le cadre de mes activités professionnelles, je co-publie aujourd’hui un article dans le dossier Objets connectés du site Smart-grids de la CRE, relayé par EY.

J’y explore les applications et impacts des objets connectés et de l’internet des objets dès aujourd’hui et à attendre dans le secteur de l’énergie dans les pays développés.

Bonne lecture !

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VtoG: le véhicule électrique comme levier d’optimisation des réseaux?

Dans le cadre de mes activités professionnelles, j’ai pu co-écrire cet article sur le véhicule électrique.

Souvent vu comme une contrainte pour le réseau électrique en raison de sa forte consommation et de sa mobilité rendant la charge peu prévisible, le véhicule électrique pourrait se révéler un levier d’optimisation des réseaux. Comment ? A condition qu’il puisse reverser son énergie sur le réseau électrique, il pourrait agir comme une batterie de secours en raison de la désynchronisation de ses besoins de charge. Les véhicules pourraient charger la nuit et participer à l’alimentation électrique d’une ville dans la journée ou aux heures de pointe, tout en respectant les besoins de déplacement de leurs propriétaires.

Une vision… pas si futuriste que ça puisque les premiers projets pilotes de développent partout dans le monde, comme ici le département de la Défense américain qui envisage le remplacement d’une partie de sa flotte si les essais sur la base de l’Armée de l’Air de Los Angeles s’avèrent concluants.

Bonne lecture !

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Gaz de schiste : une extraction propre et rentable ?

Dans le cadre de mes activités professionnelles, je signe un article publié hier sur Energie2007. J’y fais un topo sur la fracturation à l’heptafluoropropane, une nouvelle technique d’extraction du gaz de schiste qui pourrait remplacer la fracturation hydraulique et rouvrir l’exploration des sous-sols en France…

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What’s that energetic transition ahead of us?

I have been searching the web lately, hoping to find insights on the energetic transition that lies ahead of us. And I have found many answers, some well documented and well structured, mainly from national and international organizations and businesses in the sector, some others being more inspirational or emotional, many of them finally being so superficial or partial they couldn’t help answering this question: what kind of world will arise from today’s situation… which is the world I will be living in?

But all these points of view had one thing in common: they were incomplete. Each chose a specific axis in trying to figure out what exactly is facing us. And no one on the internet was really able to tell me how, to their mind, the world was going to be in the next decennies.

I am not holding it for an easy exercise, it is indeed extremely ambitious to deal with dozens of economical, technical, social, political, environmental… factors. I am not either saying I will be able to brush the right portrait of tomorrow’s world as this blog is a personal one and I’m not having in my hands all the means and skills international actors may have.
But as I’m trying myself to build my own idea of what will be my world in the coming years, I am willing to share the process through which I will go, the questions I will be wondering about, and the answers I will find for them.

To be completely clear about what I want to focus on, here is a commented recap of my subject:
Issue: how can we qualify and anticipate the energetic transition ahead of us?
Objective: building step by step a structured and justified vision of what the future could be.

  • the world: it is obviously a global issue,
  • Europe: because I feel the EU is somehow an incubator for the energetic transition,
  • and France: first because it is my home country, second because our energetic mix is rather odd on the planet and it might alter significantly the course of the transition locally. For the same last reason, I might in the process add focuses on specific countries due to their uniqueness.

Horizon: end of the 21st century. I can’t hope to still be there when that time comes and to be able to check what happened. My interest is however broader than the span of my own life. I think one of the biggest challenges of the 21st century will be the energetic transition and that by 2099, it will basically be something of the past. I’d like to cover the whole period and not forget about the end of the process.

Finally, here are the main questions I will ask myself in building an idea of what the energetic transition could look like in the 21st century’s world:
– What are we talking about? I will come back on not-so-basic notions that are useful enough to take time and make sure we’re all clear on their meaning before we start.
– What is at stake when we talk about the energetic transition?
– What goals are we trying to meet?
– What does humanity have to do in order to “survive”?
– What do I think will really happen?

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Are renewables necessarily sustainable?

Renewable energies are seen as THE solution to all of our climate change, peak oil… and probably also bad conscience issues! However one big solution usually is too simple to really solve any problem. So let’s step back for a minute and think again about renewables’ real potential.

Renewables are all hydraulic, wind, solar, biomass and geothermal energies. In fact, biomass is considered as renewable only as far as it is produced more than it is consumed. But what’s more important is to identify which energies are “clean”, sustainable.

Biomass for instance is often burnt and therefore produces CO2 which doesn’t solve any environmental issue (on the contrary, concerning climate change). Geothermal energy is based on the idea that earth and water aren’t at the same temperature on different depths and that you can extract the relative heat to produce energy. The problem is that this process simply leads to cool the earth or the water down, often destabilizing the local ecosystem. The energy source is renewable since it comes from both the core of Earth and the sun and it is to be counted in billions of years. However, the ecological impact is not neutral in the short run and immediate environment.

On the other hand, hydro, wind and solar power basically face the same issue, and although it is not that bad yet in terms of ecological impact, it can’t be neglected from a longer-term perspective.
The thing is that all three consist in capturing energy in the environment that is resulting in either movement, heat, or light. In the process, energy is taken away from its orginal destination, reducing waterflows and wind speeds or preventing the earth or plants to receive the heat or light they were used to.
Until now, as renewables are still at their start, it didn’t have any major ecological impact. But what when they will be massively used? Can’t we imagine meteorological changes in zones coming just “after” a wind farm? Or algae species dying near water turbines because they could feed only thanks to the current’s high speed? For solar energy the arbitration is more about sharing space. And to me, as we can have solar panels on the top of buildings we probably should spare the ground for farming and grazing.

All in all, to me, renewables are a powerful answer to too high greenhouse gas emissions. But we should beware of becoming extreme in taking that direction. A very important aspect of energy management and of the energy transition is to reduce our needs and avoiding energy leaks and losses. There is no simple solution and in the long-term, there is probably no sustainable way to avoid tackling another real problem: we are consuming more than what the Earth can produce whereas the law of conservation of mass says “Nothing is lost, nothing is created, everything is transformed.”.

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Fossil and renewable energies

Drawing the line between fossil and renewable energies seems much easier than estimating the maturity level of each energy production technology. However there were some tangent cases in the article I published on June, 11th and I will come back on those.

The first one is ligneous biomass, which you maybe noticed I put in both categories. Indeed, the thing with ligneous biomass is the length of its regeneration cycle which is the time a tree needs to grow. If the use of ligneous biomass exceeds the forests capacity to grow new trees again, this energy source turns from renewable to fossil fuel…

The next tangeant case was nuclear energy, which is divided in three cases according to which fuel is used :

  • Uranium, used in conventional nuclear fission, is though little-known so without a doubt a fossil fuel since uranium is relatively rare on Earth. According to some previsionnists, we might run out of it around the end of the century.
  • Thorium, which as I mentioned in a comment on my article doesn’t appear in the matrix, is a promising alternative to uranium in nuclear fission. It is indeed 3-4 times more abundant than uranium, 3-4 times more effective in producing nuclear energy and generating 10-100 times less radioactive waste, which obviously makes it much greener. So you might be tempted to classify it as renewable but I finally decided to put it in the fossil category for two reasons. First, the thorium stock is indeed finished, although much greater than the uranium one. Second because production of thorium is often linked to extraction of rare earths, process of which it is a residuum. And rare earths definitely are a fossil ressource
  • Finally, deuterium, the basis for nuclear fusion, is an abundant element in salted water, which covers around 70% of the planet’s surface. There is little apprehension concerning its coming to an end. So deuterium is available in almost infinite quantities, at least regarding the human activity timespan. However, this is not quite enough to decide if it is renewable or not but as for now, I still couldn’t make it clear for sure. That’s why I decided to temporarily put it in the renewable category, and I will keep you up to date when I find more about it. And if you have any information to add, I will be happy to read your comments.

That was it for the criteria separating fossil from renewable fuels. In my next article, I will come back on the issue of being green for an energy and explain how, to me, it relates (or not!) to the caracteristic of being renewable for an energy source.

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Conventional and non-conventional energy sources

Last time, I published a mapping of energy resources, classifying them according to their conventionality and renewability. I bet you might have been surprised at how I classified some of them as conventional or not. Indeed, I have myself, as some energy sources were not so easy to put in this or that box and this exercise made me realize how not so simple our energy ressources model is after all. So today I’ll review these choices with you, and tell more about the most surprising cases.

It’s rather obvious to figure out that nuclear fission, conventional oil and coal types as well as natural and town gas are conventional energies. What can seem more surprising is to list out water and biomass. However, both have been part of our energy mixes for a while. Hydroelectricity (in forms such as hydroelectric dams or pumping stations) account for about 15% of our mix worldwide and around 83% of our renewables production mix. And don’t you remember how your parents or grand-parents were buying steres of wood in autumn? Or how you are maybe still doing in your countryside house? Just the same, passive solar energy is centuries-old, being used in optimizing the way homes are oriented and build.

Let’s now turn to unconventional energy sources. We’ve heard a lot lately about unconventional oil and gas, so you probably weren’t surprised to find bituminous sands or shale gas there. But maybe you didn’t know there were unconventional coal types. Peat and graphite are respectively very low (less than 55%) and very high (more than 95%) carbon-intensity coal types that just now become exploitable in economic terms. By the way, I have to mention that lignite (55-75% carbon-intensity coal) is now experiencing an extraction boom. Although it has been long exploited before, bituminous and sub-bituminous coal, more carbon-intensive, slowly replaced it, and it’s only recently that exploitation costs and revenues made it more interesting to turn to lignite too.
About nuclear fusion, I just have to say there’s no doubt about the relevant classification since the technology is only at the research stage. All other renewables are not very surprisingly unconventional since they’re not very well established yet. I’ll simply finish with adding that fermentescible biomass is different from ligneous biomass in the means they are converted into energy. Biochemical processes (methanation) are used for the first while thermal processes are used for the latter (combustion, gasification or pyrolysis).

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