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Posts Tagged ‘China’
Q&A with Charlie Dou, author of Micro-Hydro Power case study in China

Charlie Dou is an adjunct Professor and Research Associate, Alternative Energy Institute, West Texas A&M University, USA; CEO, Beijing Bergey Windpower Co. Ltd., served as International advisor for UNDP/GEF on renewable energy project in China, key Expert for EU, Consultant for the World Bank/GEF, etc. He is directly involved in many research and international projects sponsored by UNDP/GEF, the World Bank, China central government, and has published and/or edited 14 books and more than 40 papers/presentations, including “China Village Power Project development Guidebook” and the series books of “Capacity Building Strategy for the Rapid Commercialization of Renewable Energy in China” for UNDP. He received his Master’s Degree in Engineering Technology in the US, and Master’s Degree in Electric Engineering in China, and once worked on his doctoral degree on Industrial Engineering at Texas Tech University.

To download the Micro-Hydro Power case study from the GIM database, please click here.

What is the project’s basic value proposition and what makes its financial model sustainable?

The economic development is slow for these remote villages located in China’s western mountain regions and the life of these villagers is poor because of their inability to access electricity.  Extension of traditional utility power line is not viable, and not affordable for low-income residents.  Finding a technical and economically feasible solution is key for rural electrification in such areas.  Micro-hydro power is the least costly technology for power generation compared with other renewable energy technologies and traditional power plants. This case provides a successful example of local people relying on their own efforts to develop an electricity service without government and outside financial assistance and improve their life.

In developing countries, what are the main challenges for access to energy for the poor?

The main challenges for access to energy for the poor in developing countries is to develop a solution for a financially and technically sustainable power supply and affordable power service.

What main factors make this model successful that will allow it to be replicated elsewhere?

First, availability of resource and technology. Second, affordability of the solution (again, micro-hydro power generation is one of the least costly power generation technologies). Third, self-motivation (local residents wished to change their status). Fourth, clear ownership (the micro-hydro power system was developed and managed by the villagers themselves).

What would you say was critical about the actor ecosystem that enabled this business to be successful?

The villagers there have lacked power supply for generations. They wished to change this situation.  But the local utility company is not interested in expanding the service to such areas due to high investment and poor return (or even no return, since the losses from the power transmission may be even more than the power to be applied).  Micro-hydro power generation provides an affordable and environmentally friendly solution, since usually, for such a micro-hydro power generation, no civic construction is needed.  The water flow will not change significantly, which means little negative impact on local ecosystems compared with large hydro dams.

 
Turning Agricultural Waste into Bioenergy in China: New GIM Case Study Released

About the author

Charlie Dou is an adjunct Professor and Research Associate, Alternative Energy Institute, West Texas A&M University, USA; CEO, Beijing Bergey Windpower Co. Ltd., served as International advisor for UNDP/GEF on renewable energy project in China, key Expert for EU, Consultant for the World Bank/GEF, etc. He is directly involved in many research and international projects sponsored by UNDP/GEF, the World Bank, China central government, and has published and/or edited 14 books and more than 40 papers/presentations, including “China Village Power Project development Guidebook” and the series books of “Capacity Building Strategy for the Rapid Commercialization of Renewable Energy in China” for UNDP. He received his Master’s Degree in Engineering Technology in the US, and Master’s Degree in Electric Engineering in China, and once worked on his doctoral degree on Industrial Engineering at Texas Tech University.

About the case study

Agricultural waste was previously just waste, burned outside in winter. It needs a lot of labour to handle and also produces severe environmental problems. This successful business converts agricultural waste into a valuable product. Beijing Shengchang Bioenergy S&T Co., Ltd. (SBST) is a bioenergy manufacturer located in Beijing, China, that turns agricultural waste into bioenergy, while simultaneously benefiting the local farmers. The company engages in bioenergy production, controlling the process from raw material access to final products and application. There are two production and value chains: one is collecting and purchasing bio wastes from farmers, then producing Biomass Pellet Fuel (BPF) and selling it to the users for cooking and heating; the other one is developing and manufacturing pellet boilers and stoves, then selling them to farmers and industrial users. Local farmers benefit by earning extra income through selling agricultural waste to the company and also by reducing their fuel expenses if they switch from their traditional burners to biofuel burners.

The business has made great impact on the economy, society and the environment. It promotes rural development, thus meeting the goals of the Government of China. Through purchasing agricultural waste (AW) from farmers and promoting biofuel burners, so far it has benefited at least 30,000 households. Families who sell AW to the company can gain an extra CNY 2,400 (US$353) per year, while those families who are using biofuel burners can reduce their fuel expense by CNY 600 (US$88) per year. Meanwhile, the burners reduce coal consumption and greenhouse gas (GHG) emissions. If the government could develop policies to treat the bioenergy industry in the same way as other renewable energy sources in China, the business could be scaled up quickly and have a greater impact.

To download the Beijing Shengchang case study from the GIM database, please click here.

 
GIM / BCtA sessions at the China-Africa Business Council

Summary
Between 7-11 September2009 Henry Jackelen, Director of UNDP Private Sector Division; Natalie Africa, Program Manager for Business Call to Action; and Sahba Sobhani, Program Manager for Growing Inclusive Markets Initiative travelled to Beijing for a dual launch of the Growing Inclusive Markets (GIM) report and the Business Call to Action (BCtA) in China. The GIM/BCtA workshop was organized by the UNDP office in Beijing and the China-Africa Business Council (CABC) and attended by nearly 30 companies, members of the CABC.

CABC Workshop – 8 September 2009
Opening remarks
The workshop was opened by Khalid Malik, UN Resident Coordinator in China, and by Ms. Annie Wu, the Vice Chairman of the China-Africa Business Council (CABC). The CABC was set up in 2005 with support of UNDP and promotes China-Africa business cooperation. Mr. Malik emphasized that the BCtA and GIM advocate going beyond a “charity” or CSR approach by business, and that the CABC can promote this new approach through its activities.
Henry Jackelen, the Director for UNDP’s Private Sector, pointed out that Chinese companies have been successful investors in poor regions of China as well as Africa, and would therefore be able to demonstrate interesting models of inclusive business practices. Africa represents an untapped market which can be developed with Chinese ingenuity.

GIM presentation
Sahba Sobhani, the GIM Program Manager, presented the GIM report and methodology, noting that China was the 45th country in which the report has now been launched. The report, translated in Chinese, was presented through a slide presentation that featured the two Chinese companies case studied in the GIM report, Huatai (paper) and Tsingha Tonfang (affordable computers).

BCtA presentation
Natalie Africa, Business Call to Action Program Manager gave a slide presentation to explain the objectives of the BCtA, the value add to companies of being involved, and the types of initiatives that were currently being implemented. She emphasized the importance of ensuring a diversity of BCtA companies, including companies from the South and China in particular, given the expanding role of the Chinese private sector.

Q & A
Comments and questions from the audience were diverse and included:

  • The China Development Bank has recently established a China-Africa Development Fund that will help finance pioneering companies doing business in Africa, particularly SMEs who cannot raise collateral for business ventures.
  • Would it not be easier to simply give money to the poor, rather than spending money on financing the private sector in the hope that it will “trickle down” to the poor?
  • What is the difference between the BCtA and the UN Global Compact?
  • Success of the private sector in China is due to PPPs, where state owned enterprises and local governments invest in infrastructure which allows private sector to then set up successful business. This lesson should be taken to Africa.
  • Housing Project – would UNDP be able to assist in helping a Chinese business currently investing in middle-incoming housing in Africa to downscale into low income housing and thus incorporate a BoP business model?
  • There is sometimes complacency amongst Africans in terms of investing in infrastructure – perhaps because there is so much natural wealth there. Chinese model of PPPs should be explored.
  • Local manufacturing is an important means to create employment and transfer of skills and technology in Africa, but financing for African SMEs is often inadequate, prohibiting them from capitalizing manufacturing investments.