Access to Energy


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Promoting access to energy
without endangering the climate
today’s major challenge.

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Access to Energy

  1. 1. Accessto energyBipBop Programme
  2. 2. ContentsAccess to energyMessage from Jean-Pascal Tricoire ........................................................................ 3The issues at stake ................................................................................................... 4-7The requirements .................................................................................................... 8-9The players ............................................................................................................ 10-11Schneider Electric’s commitment ................................................................. 12-19Schneider Electric | Special Feature: Sustainable Development | N°1 - May 2008 | Access to energy May 2010 | Access to energy
  3. 3. Message from Jean-Pascal Tricoire Promoting access to energy for all,without endangering the climate – this istoday’s major challenge.We are at a turning point in the history special responsibility in this regard. It is ourof our planet. Today, both public and private ambition to become an actor in a virtuousenergy is at the very heart of Sustainable circle that links business, innovation andDevelopment issues. 1.6 billion people responsibility. The emerging countries arethroughout the world do not have access our markets of tomorrow. Today, imagining anto energy and legitimately aspire to having offer suited to people at “the base of thethe same equipment and services as the pyramid*”, means contributing to theirinhabitants of developed areas. Energy is development and preparing our commoneverywhere, in transport, services, industry, future at the same time. As far as innovationeducation, health and housing. It irrigates is concerned, it is now more essentialour mature societies. Therefore, access than ever that we succeed in inventing newfor all to this resource remains one of the technologies and new services adaptedessential keys to sustainable economic to different realities, capable of reconcilingdevelopment that is wellbalanced performance and environmental respect.between mature and emerging countries. Lastly, the responsibility dimension of ourBut increasing the world’s consumption of action goes back a very long way. With the Jean-Pascalenergy means endangering another collective Schneider Electric Foundation, we have Tricoireresource: the climate. How can we face up been involved for many years in educational Chairman of theto this paradox? How can we produce activities and integration of young people Management Boardbetter, improve our energy efficiency and throughout the world. and CEOpromote access to energy for all? This special feature aims to go even furtherThis is the major challenge facing us today. and introduce you to all the issuesSchneider Electric’s different professions, related to energy access, and theits world-wide set-up and the exceptional sustainable solutions we are deployingcultural diversity of its teams endow it with a to face up to them.* The expression “base of the pyramid” is often used these days to refer to people with the lowest income on a global scalein a given country. 2-3
  4. 4. Access to energy,a challenge for ourglobal villageSchneider Electric | May 2010 | Access to energy
  5. 5. The issues at stakeAccess to energy is already an issue for countriesin the Southern hemisphere. It is also a real collective challengeclosely related to the question of pollution and global warming.Today, almost a quarter of the world’s projects have enabled new generatorspopulation does not have access to operating on palm oil to be introduced intoelectricity, despite all the progress made in rural communities. But requirements are stillcertain regions. Certain countries, which have considerable, especially in sub-Saharana high proportion of “poor”, such as China, Africa and Southern Asia. Furthermore,are capable of supplying the majority of their these requirements are evolving. Today,population with electricity. Others have 4 out of 5 persons without access tosuccessfully launched rural electrification electricity live in a rural area, but tomorrowprogrammes, such as Bangladesh where the question will also arise in urban areas.some seventy electrification cooperatives During the next thirty years the major parthave been created over the last twenty years of the world’s demographic growth will takeand which now supply electricity to 40 million place in large urban agglomeration inpeople, or Brazil, where new innovative developing countries. Due simply to their size and their increasing importance in world energymarkets, China and India are transforming the world’s energy system. Rapideconomic growth will undoubtedly continue to sustain the demand for energy inthese two countries and really contribute to improving the quality of life of over2 billion people. This is a legitimate aspiration that the rest of the world mustintegrate and support.Nobuo Tanaka, IEA executive director>60%This represents the increase in the >47% This is the amount of CO2 emissions thatdemand for electricity in developing can be attributed to developing countriescountries by 2030. by 2030.Source : IAE 2007. Source : IAE 2007. 4-5
  6. 6. Energy, the key to developmentSince the Rio de Janeiro summit, access to to development. For example, a community’senergy has been considered as an essential or a region’s simple ability to pump waterelement for mankind’s sustainable by means of electric pumps gives access todevelopment. It is a fact that providing drinking water, improves crop yields andmodern energy services (heat for cooking, increases food supplies. Women and girlsrefrigeration, lighting, etc.) not only enables can devote the time they used to spendpeople’s quality of life to be improved, going to and from the well to learningbut it also destroys the circle of poverty by a professional activity. In other words,improving the efficiency of health and favouring more equitable access to energyeducational services, by developing mobility means taking an extra step towardsand by promoting the development of local attaining the Millennium Development Goalscrafts, industry and urban services. Access defined by the United Nations’ Generalto these services, no matter how modest it Assembly in 2000 for solving problemsmay be, has positive direct and indirect of extreme poverty.consequences, which contribute significantly Developing countries should not be condemned by the weight oftradition or their poverty to repeat the same errors as their predecessors,especially when other solutions are available. We cannot refuse them the rightto become industrialised and, in fact, they will need to practically doubletheir production of electricity in the coming years if they want to progress andattain Millennium Development Goals.Kofi Annan, at the 14th sessionof the UNO Sustainable Development Commission in 2006Schneider Electric | May 2010 | Access to energy Development | N°1 - May 2008 | Access to energy Special Feature: Sustainable
  7. 7. The issues at stake The base of the pyramid, a growth reservoirThe base of the pyramid represents the 4 billion people on our planet who live on less than2 dollars a day. In his book “The Fortune at the base of the pyramid: Eradicating poverty throughprofit”, C.K. Prahalad, a university professor and influential international consultant, proposesthat this population is not considered as a burden but as an immense potential reservoir ofconsumers and entrepreneurs. And to meet the requirements of this target,he suggests t hat major companies should work hand-in-hand with Non-GovernmentalOrganisations and local government authorities.Rapidly increasing requirementsThe other major issue for the coming years is energy in order to reduce CO2 emissions andthat of the sudden increase in requirements. to preserve the planet from the disastrousAccording to a scenario drawn up by consequences of global warming.the International Energy Agency (IEA) in the Therefore, a new balance must be foundreport it published in early November 2007 between goals that are often contradictory:(World Energy Outlook 2007), developing human development, economic growth andcountries with the fastest economic and environmental respect. Without any doubt,demographic growth should account for this will involve a profound and “virtuous”74% of the increase in the world’s primary modification of the living pattern of the peopleenergy consumption, 45% of which will be who inhabit the Northern hemisphere andattributable to China and India. As a result, a search for alternative energy productionthe IEA is urging all countries to undergo solutions in the Southern countries.a transition, whose goal is to “decarbonise” 6-7
  8. 8. Today, 1.6 billion persons throughout the world,or 300 million families, do not have access to electricity.World map with captions showing the regions where requirementsare greatest.Source : International Energy Agency, 2006. 2002 2030 Africa Less than 10% of the population living in West Africa has access to electricity. In rural and peri-urban areas, electricity connection rates rarely exceed 5% compared with 35% in North Africa and 45% in Eastern Asia. > In sub-Saharan Africa, 526 million people do not have access to electricity.Schneider Electric | Special Feature: Sustainable Development | N°1 - May 2008 | Access to energy May 2010 | Access to energy
  9. 9. The requirements Asia Primary energy requirements in Asia should increase by 8% to 10% over the first 30 years of the 21st century. In 2004, the continent already represented 62% of the world’s growth in energy consumption (source: Enerdata). > Almost 900 million people still do not have access to electricity, particularly in South-East Asia.>$15This the average monthly energy budget for the poorest families,which represent 30% of their overall income. 8-9
  10. 10. The playersIn every area of the world, there are programmes,non-governmental organisations and private companiesendeavouring to promote access to energy.Non-governmental OrganisationsA certain number of NGOs are working, more Since 1992, together with UN experts and localor less exclusively, on questions related to partners, it has completed five projects andenergy. Electriciens Sans Frontières was is at present developing several programmescreated in 1986 by employees in the Design on renewable energy in the poorest areas inand Research Department of EDF (Electricité the world. Another example: the Habitat forde France). Today, this NGO has federated Humanity NGO, which works on housinga dozen regional associations with over for the most poverty-stricken, is integrating800 voluntary workers, mostly from EDF. notions of energy efficiency in its programmesOver 20 years, more than a million people and is developing solutions based onhave benefitted from the association’s actions. renewable energy in certain countries,The E8 was created just after the Rio summit such as Armenia, where it has equippedin 1992. This NGO has united 9 of the largest homes belonging to poor families with solarelectricity concerns in the G8 countries. water heaters.Schneider Electric | May 2010 | Access to energy Development | N°1 - May 2008 | Access to energy Special Feature: Sustainable
  11. 11. The playersInternational institutions Private companiesFor a number of years, numerous In the context of their social responsibilities,international programmes have been certain large companies in the energy sectorendeavouring to reduce the world’s energy also endeavour to promote access to energy“divide”. With the support of 24 European, for people living in developing countries.American and Asian countries, the African A member of the E8, EDF is participating inDevelopment Bank (ADB) works in several projects piloted by the E8 NGO53 African countries. Notably, it has launched throughout the world. Its EDF Accessthe Finesse programme (Financing Energy programme is a long term programme forServices for Small-Scale Energy Users) creating and running local companies forintended to promote deployment of selling energy services to rural populations inrenewable-energy-based services in Africa. developing countries, far away from powerThe objective of the World Bank’s ESMAP grids. In 2003, in partnership with the WWF,programme (Energy Sector Management ABB launched an “access to electricity inAssistance Program), managed in Tanzania” programme, whose aim is topartnership with the United Nations equip rural villages with installations that runDevelopment Programme, is to increase on biomass fuel. In India, General Electricpeople’s access to modern energy sources, is deploying a rural electrification programmeespecially in isolated rural areas. that incorporates a certain number ofThe EUEI, the European Union Energy technologies from the GE renewable energyInitiative for “the eradication of poverty and portfolio. This year, the American giant hassustainable development”, was launched set up a partnership with USAID and hasin 2002 at the Earth Summit and obtained committed itself to giving support to twoa joint commitment from the member states initiatives made by the Indian government:and the commission. Lastly, the United “Electricity for all by 2012” and “RuralNations Environmental Programme REED – electrification / Rural business clusters”.Rural Energy Enterprise Development –acts as an incubator for enterprises and asa business angel. It supplies funds to For morecompanies in the form of a debt or shares, www.iea.orgenhances the value of the most profitable www.ademe.frprojects and withdraws once the company become viable. It also acts as an advisor www.ckprahalad.comby making qualified personnel available to www.electriciens-sans-frontieres.orgentrepreneurs. 10-11
  12. 12. Schneider Electric’scommitment The "BipBop*" programme Business Innovation Partner with Build adequate B I investment funds offers/solutions to to create be a champion in the companies electrical distribution dedicated to the electrical business BOP field fot the Base of the Pyramid. for the Base of the Pyramid. P PeopleSupport from Train young people from the Base of the Pyramid in electrical skills, sponsor them.Schneider ElectricFoundationBOP for “Base of the pyramid“. It is the expression commonly used to namethose with the lowest income in each country.* BipBop is the name of an internal Schneider Electric programme.Schneider Electric | May 2010 | Access to energy
  13. 13. Schneider Electric’s commitmentFor many years, Schneider Electric has been committedto a sustainable development approach. Today, the Group is passinga new milestone by linking business, responsibility and innovation evenmore closely together.By incorporating Sustainable Development In this approach, increasing populations’objectives and indicators in its successive technical skills enables us to find bettercompany programme, Schneider Electric qualified labour, to improve servicing andhad already placed Sustainable Development maintenance and to distribute offers forat the heart of its strategy. “But today, the base of the pyramid market more rapidly.we are going even further”, explains Also, acquiring administration andGilles Vermot Desroches, Sustainable management skills enables us to minimiseDevelopment Senior VP, Schneider Electric, financial risks, to optimise company strategy“by treating three problems, Business, and to increase return-on-investment levelsInnovation and People at the base (which can then be reinvested elsewhereof the pyramid, in an integrated way, in and thereby accelerate the “access to energy”other words, by creating an offer adapted to process). Improving the quality of an offerthe requirements of populations at the base of (and its appropriateness to the demand)the pyramid (the innovation dimension), enables us to generate the resourcesby investing in innovative companies needed to finance a training programme and(the business dimension) and by increasing to train populations on an offer that is suitedthe levels of qualification to them (easy to use, to service, to exploit, etc).of base of the pyramid populations” Lastly, investment in innovative companies(the people dimension). stimulates the emergence of new ideas and offers that are increasingly accessible,Virtuous dynamics approachable, and viable for the base of the pyramid”.Associating these three dimensions togethermeans creating “virtuous dynamics”.>Over $430 billionPer year, this is the estimated size of the “household” energy market in the baseof pyramid consumer segment, where annual income is less than 3,000 dollars.Source: International Finance Corporation, “The next 4 billion, market size and business strategy at the base of the pyramid”, WorldResources Institute, 2007. 12-13
  14. 14. Innovation Low-income markets, pretty unattractive? Taking an interest in it today means preparing for the future. Prepayment, a solution suited electricity operator. In South Africa, the same to the requirements of developing number of counters has been installed for countries Eskom, a local electricity production and distribution company. Today, the Group’s offer in terms of access to The low cost housing market energy is mainly borne by Conlog, it subsidiary set up in South Africa, a company that joined The offer developed by Schneider Electric the Group in 2000. In many emerging in South Africa follows the same logic. Since countries, electricity operators have difficulty 1994, with the “A home for all” government in managing payment of their invoices. programme, 1.4 million low-cost homes have Conlog’s prepayment solutions (installing been built, putting a roof over the heads of counters in homes, setting up a network of some 5 million people, amongst the poorest >1 prepayment card sales points and a in the country. Schneider Electric has set up a management system on the energy operator’s partnership with a local company, Sonoco, premises) provide an efficient solution to this created by the former South-African football problem. There are numerous advantages to star, Jomo Sono, for equipping these homes this system: the operator obtains significant whose technical characteristics are all very million: cash flow and can save the cost of a similar. Sonoco installs kits which include households at the traditional invoice management system. On everything required by a basic household Base of the Pyramid the consumer side, access to energy is electricity installation; it sells prepayment have access to simplified, without any extra cost for cards to the occupants, operates prepayment energy thanks to subscriptions or cancelling subscriptions, and services and handles system maintenance. Schneider Electric’s managing energy budgets becomes easier: The kits developed by Schneider Electric are solutions at the end you only consume what you can pay for. In very easy to fit (one hour’s fitting on average), of 2011 the Sudan, Conlog has installed a million which also provides a solution to the problem counters of this type for the national of local installers’ technical skills.Schneider Electric | May 2010 | Access to energy
  15. 15. Schneider Electric’s commitmentIn-Diya LED-based lighting system in Half of the net profit earned from the sales ofIndia In-Diya in India will be put back into the Schneider Electric India Foundation to further the cause of BipBop.As part of its commitment towards the BipBopinitiative, Schneider Electric unveiled itsIn-Diya LEDbased lighting system in New Also in India, the Schneider ElectricDelhi in February 2010. In-Diya aims to Foundation contributed to project iLeadprovide lighting to people living with no or (Institute for Livelihood, Educations, andunreliable electricity in India. It is a specially Development). The project consists of skilldesigned LED-based lighting system that can development, training, and employment foroperate on main supply and/or solar, and disadvantaged young people, as well asprovides backup ranging from 8 to 15 hours entrepreneurship training for poor youth. Afor indoor applications. The innovative offer pilot class of electricians started training inwill play a key role in providing access to 2009. The goal is to train 4000 professionals inreliable lighting to more than 500 million rural six different locations by 2012, after whichpeople, thereby enabling them to take part in they will be encouraged to launch their ownthe exclusive growth story in India. small business and deploy lighting solutions in poor villages throughout the country .In-Diya is a high-quality, affordable productoffering the following benefits: > consumes 50% less power than an 11-watt compact fluorescent lamp (CFL) and 90% less power than two 60-watt incandescent lamps for the same light output > illuminates a 3.65m x 3.65m (12’ x 12’) room for all normal activities and is wall-mounted > in its high-end version, costs less than any CFL-based solar home lighting system > provides 50 000 hours of lighting LED lamp with battery backup The innovative offer will play a key role in providingaccess to reliable lighting to more than 500 million people.Abhimanyu Sahu, Programme Manager, BipBop India, Schneider Electric 14-15
  16. 16. Business Schneider Electric Energy Access Fund The establishment of the Schneider Electric Schneider Electric Energy Access fund works Energy Access fund marked an innovative first within the company’s BipBop Programme to for a major industrial company in the area of provide safe, green energy to disadvantaged corporate social responsibility. Created with individuals. The structure of the fund, which is the backing of Crédit Coopératif and PhiTrust, designed to promote responsible the fund supports the development of development, represents anoriginal and entrepreneurial initiatives worldwide that will innovative response to the latest French help the poorest among us obtain access to legislation on employee savings. It is a new energy. With an initial capitalization of ¤3 societal commitment for Schneider Electric, million, Schneider Electric Energy Access shared with our entire corporate community. provides financing for projects that are By supporting the development of businesses designed to: involved in electricity and renewable > help jobless individuals create energies, Schneider Electric Energy Access businesses in electricity reflects our commitment to creating a virtuous circle combining business, > promote the development of businesses innovation, and social responsibility. that provide energy access in rural orsuburban areas > support the deployment of innovative energy access solutions that use renewable energies for the Base of the Pyramid May 2010 | Access to energySchneider Electric | Special Feature: Sustainable Development | N°1 - May 2008 | Access to energy
  17. 17. Schneider Electric’s commitmentPeopleThe Schneider Electric Foundation supports projects all over the worldto promote access to energy and professional integration into electricaltrades. In India, from village to school In India, Schneider Electric is involved in a project withOver the past 10 years, the Schneider Electric Foundation has supported hundreds of the Kanyare Colony,children and young people in all of the Group’s host countries. The most ambitious projects a village locatedcombine financial and human resources with a link to Schneider Electric’s businesses. in the province of Kernataka.Jobs in electricity Access to energy The project’s initial objective is to provideThe Group has decided to focus more fully In today’s world, 1.6 billion people do not electricity to theon jobs in electricity to give its commitment have access to electricity. The Foundation village, which is themore meaning and make its programs wants to help shrink this gap by providing home of 150 familiesmore effective. Around the world, wherever access to energy—a move that will also mainly earning theirdisconnected people are looking for job provide access to development and living by gatheringopportunities, the Foundation will support improved healthcare. fruit and vegetablesprojects that provide training and an on-ramp and producing honey. >10.000to long-term employment, especially in areas The project’s secondrelated to electricity. phase consists of training 20 young people in electrical young people at the Base of the Pyramid trades; a training trained in the electricity professions at the programme that will end of 2011 be extended to a technical college located at Misore, the closest town. 16-17
  18. 18. The Foundation in action Training future electricians in Brazil In Brazil, the national industrial training service (SENAI) is deploying an 80-hour training programme in close cooperation with Schneider Electric Brazil. Taught on nights and weekends, this initiation to the basics of residential electrical work gives low-income youths an opportunity to learn the electrical trade. Because the courses are offered free of charge and outside working hours, both attendance and the completion rate are high. In 2009, 1200 young people participated in the programme at 26 centres across the country. Hands-on experience in Nigeria From December 3-7, 2007, students at Yaba college of technology applied the electrical engineering lessons given by Schneider Electric team members in a hands-on workshop. Participants were asked to verify and optimize the electrical installations at Child Life Line, a centre for the disadvantaged supported by Schneider Electric Nigeria, its employees and the Foundation. Afterwards, a training session on installation was offered that attracted nearly 400 students and 70 professors from four Nigerian universities. May 2010 | Access to energySchneider Electric | Special Feature: Sustainable Development | N°1 - May 2008 | Access to energy
  19. 19. Schneider Electric’s commitmentAround the world> Algeria > Brazil > Costa Rica > Egypt > FranceAtelier sans Sociedade Fundación Galal Fahmi Adiefrontières Benfeitora Cedes don School Providing financial Jaguaré BoscoTrain disadvantaged Renovating a assistanceyoung people Build a new Train 38 young technical school, to 50 long-termto acquire the basic classroom, renovate disadvantaged training the teachers unemployedknowledge another one, propose people and and developing persons to helpin electricity and on-product training their teachers in a training program them createelectronics. for the teachers a electromechanical for the pupils. their own companies nd train 60 young engineering, in the field disadvantaged bringing brand of electricity. people a year new electrical in electrical equipment. engineering.> Indonesia > Lebanon > Central > Russia > Turkey2 Vocational Seeds of Hope Africa University for Cagdas Yasamischools et The Feron Vrau Handicapped Destekleme Partnering with theNurani Dunia foundation people Dernegi European InstituteRenovate and equip for Cooperation and Giving social and Create a University Provide financialthe laboratories Development (IECD) financial support for handicapped support forat the technical to upgrade training for the training people, with 50 young womenschools in Banda capacity at of engineers and courses, selection to enable themAceh. six technical schools technicians and exams and to continue their specialized in (recruiting and delivery of a studies in electrical electrical, training teaching Schneider Electric and electronic electronic and staff, purchasing diploma. engineering. electromechanical technical, scientific studies. and classroom equipment). 18-19
  20. 20. Butterfly - Crédits photos : Agence VU, Etienne Eymard Duvernay, Christian Rausch, Schneider Electric. Schneider Electric SA Sustainable Development Department 35, rue Joseph Monier 92506 Rueil-Malmaison - France Tél : +33 (0) 1 41 29 70 00 Fax : +33 (0) 1 41 29 71 00Schneider Electric | Special Feature: Sustainable Development | N°1 - May 2008 | Access to energy