Developing a Micro-Hydro Franchise for Rapid Scale-Up
Eduardo Porta
Developing a Micro-Hydro Franchise for Rapid Scale-Up
Access to electricity is crucial for human development, yet only 31% of the population in Sub-Saharan Africa has access to reliable electricity. This is a main issue whilst addressing sustainable development, as access to modern energy services is crucial to reduce poverty, improve people´s health and livelihoods, as well as provide opportunities, particularly for the vulnerable poor in developing countries.
In the context of the global search for sustainable low carbon technologies, which can deliver energy without contributing to climate change, it is difficult to find a more appropriate supply than that from micro-hydro power where available. Micro-hydro are usually 'run-of-the-river' systems, meaning that they do not require a dam or storage facility to be constructed as they simply divert water from the stream or river, channel it in to a valley and drop it in to a turbine via a penstock (pipeline). This type of hydropower generation thus avoids the damaging environmental and social effects that larger hydroelectric schemes cause.
Practical Action, an international NGO, has been a leading proponent of micro-hydro since the 1980´s with considerable success. However, barriers to further reach-out and scale-up have been experienced. With the technology at a reliable and known level, the economics proven and with management models now tried and tested, there is great potential to push out this technology into all rural areas in which the appropriate water resources are available.
A new type of delivery model may be required to reach out more effectively to non-grid connected areas and scale-up the potential of decentralized technologies, in particular micro-hydro. This study explores whether a franchise business model for a decentralized utility could be adapted and applied to the micro-hydro models developed with a view to engage more individuals and institutions in the development of these systems.
Findings show there is a potential market for micro-hydro scale-up in Southern East Africa, of which Kenya and Uganda stand out as the most attractive markets. The report suggests that bundling micro-hydro schemes in a franchise chain can leverage financial support and lower system cost, improve system quality and reliability, and reduce main barriers for micro-hydro scale-up. However, there are challenges to overtake in franchising.
A comprehensive and cohesive analysis provide the basis for recommendations to further develop a franchise programme or package for scale-up of micro-hydro installations globally and in particular in Southern East Africa. A general outlook for a decentralized utility franchise chain is provided.