After thoroughly reviewing the “Vision” for clean cooking from IEA, available at https://www.iea.org/reports/a-vision-for-clean-cooking-access-for-all, reservations arise concerning its content due to a noticeable bias and several flaws in the analysis in the document.
One notable observation is the disproportionate mention of LPG, which is referenced 108 times, while solar energy, despite IEA’s acknowledgement of it being the most cost-effective form of electricity ever produced, is mentioned only 6 times. This disparity raises concerns about potential bias in favor of LPG, which requires a closer examination.
In the realm of business education, particularly in the field of electricity, lifecycle cost analysis is an essential concept taught to first-year students. This analysis, often referred to as the levelized Cost of energy (LCOE), involves calculating the $/kWh figure for the lifetime cost of an electricity option divided by the lifetime energy delivered. Typically, a timeframe of 20-25 years is employed to assess the viability of renewable energy systems or the power plants of fossil fuel systems. Strikingly, this study overlooks such a critical comparison, yet confidently concludes that LPG is the most favorable near-term option.
Furthermore, the report acknowledges that numerous governments are considering the adoption of electric cooking to safeguard against LPG price fluctuations. Recent incidents may have compelled up to 100 million people to revert from LPG to using charcoal and wood. Nonetheless, the analysis fails to account for these factors, which raises concerns about the validity of its conclusions.
Baseline cooking expenditure
According to data from Scaling LPG for Cooking in Tanzania https://cleancooking.org/binary-data/RESOURCE/file/000/000/578-1.pdf (page 6)
“In Tanzania, each 15 kg cylinder refill typically costs TSH 50,000 (USD 23) and may last 30 to 40 days based on family size and average use. By contrast, customers typically buy TSH 1,500 (USD 0.75) 3 kg tins of charcoal that last one to two days.”
Based on this information, it can be estimated that LPG cooking costs around $0.50-0.75 per day, while charcoal cooking might be slightly cheaper at $0.35-0.75 per day. Over a year, the cost of using LPG for cooking amounts to $150-250, while charcoal usage costs approximately the same or slightly less.
Considering the lifespan of LPG usage over 20 years, the total expenditure on LPG for cooking ranges from $3,000 to $5,000. However, this calculation excludes any upfront and replacement costs of burners and pots, which are relatively minimal compared to the overall expenses, possibly ranging from $50 to $250.
Energy needs for cooking
When using inefficient cooking appliances, it’s estimated that you might need approximately 5-10 kWh of electricity per day. This data is based on USAID’s information from the Zambia Alternatives to Charcoal project or the MECS (Multi-Tier Framework for Measuring Energy Access) data.
However, if you switch to using efficient cooking appliances that include features like pot insulation (e.g., electric pressure cookers, rice cookers, etc.), the electricity consumption can be reduced by over 50% to approximately 2-3 kWh per day.
For powering a 2-3 kWh/day electric cooking system, a 500-750 Wp (Watt peak) solar home system is sufficient. It’s worth noting that this solar system’s capacity is larger than most pay-as-you-go solar home systems currently available, which typically range from 20 to 200 Watts, but it is still feasible and accessible.
Example – SunKing Home 8000 System
SunKing recently introduced a new solar energy product, the SunKing Home 8000 system, featuring a 1800Wp 2kW inverter. This system is well-suited for residential use and is available for purchase in Nigeria at a retail price of approximately $2200 (source: https://jiji.ng/lagos-island-west/solar-energy-products/sun-king-home-8000-r9jvaRcLKTgrlTyeGnl1UO2r.html?page=1&pos=4&cur_pos=4&ads_per_page=24&ads_count=24&lid=9Oq5sS9yz6dVQzSi&indexPosition=3).
The capacity of this system is more than sufficient for typical household needs, and a smaller system with half the capacity could still meet the requirements.
Considering the potential cost savings, a smaller system estimated at $1100 would be significantly cheaper, amounting to a cost reduction of 60-80% compared to the expenses incurred over 20 years of purchasing LPG for cooking. Based on an annual consumption of $150-250/year, the payback period for this system ranges from 4.5 to 7 years, implying an attractive internal rate of return (IRR) between 10-20%.
Non-solar electric cooking
How cheap must electricity be to be competitive with LPG cooking?
It is worth noting that despite the apparent economic benefits and efficiency of solar electric cooking, the International Energy Agency (IEA) dismisses this approach as “too expensive.” However, an alternative worth considering is non-solar electric efficient cooking. Assuming a daily consumption of 3kWh, which totals around 1000kWh annually, an approximate yearly cost of $150-250 indicates that any clean grid with electricity costs below $0.15-0.25/kWh would make this option feasible.
One such example is Zambia, which has a lifeline tariff of $0.02/kWh for the initial 100 kWh/month, sufficient to meet the daily energy needs of 3kWh. Zambia’s predominantly hydropower-based grid makes this option even more appealing. Additionally, incorporating a battery storage system into the setup would enhance reliability and overcome potential electricity supply fluctuations, all while remaining more cost-effective than relying on LPG for cooking. Moreover, the overnight load from the battery could complement hydropower generation during periods of low demand from other sources.
Solar energy technical analysis
A 1800Wp system from SunKing, operating four hours per day, generates approximately 7kWh/day or 2000kWh/year. Accounting for an $800 battery replacement at year 10, the system’s lifetime cost amounts to $3000. Over two decades, this system produces 40,000 kWh, resulting in a levelized cost of electricity (LCOE) of $0.075 per kWh. This LCOE is well below the $0.15/kWh threshold and significantly lower than current solar minigrid costs, which range from $0.30-0.60/kWh. Considering an increase in costs to account for capital expenses at 10-15% profit margins or interest rates, the affordability of solar electric cooking remains viable, mirroring the lifecycle view taken by investors in traditional energy infrastructure projects.
The lifetime cost of $1500-3000 for solar or electric cooking amortized over 20 years comes to $0.20-$0.40 per day, significantly lower than the baseline cost noted above.
Investors adopting a long-term perspective and considering a 10-20 year lifecycle for micro infrastructure, similar to how they would approach building new LPG processing and bottling plants, would find solar electric cooking to be an attractive investment opportunity. The advantages of solar electric cooking, combined with a backup from the grid or minigrids during inclement weather, present a compelling proposition for investors seeking sustainable and environmentally friendly ventures.
Advantage of Solar Cooking
One significant advantage of promoting solar electric cooking is that it places zero extra strain on existing electric grids, countering a key argument made by the International Energy Agency (IEA) against electric cooking. By harnessing on-site solar energy, solar electric cooking systems can function independently of the grid, thus reducing the demand pressure on the overall electricity infrastructure.
The surplus electricity generated by the solar system can be efficiently utilized for various non-cooking applications such as lighting, cooling, communications, motive energy, and more. This multifunctional use enhances the overall efficiency and productivity of the system, setting it apart from LPG-powered alternatives that lack this versatility.
Wake up IEA!!!
As usual, the IEA appears disconnected from the realities of the market, lagging years behind in its vision and thinking. What they consider expensive is actually 50-75% cheaper than their recommendations when a conventional lifetime analysis is made. It is crucial for the IEA to acknowledge these market dynamics and embrace the cost-effective solutions available. Failure to do so could result in significant financial burdens for 100 million households in Africa, who may end up paying $2000-4000 more than necessary over 20 years, amounting to $200-400 billion ($10-20 billion per year) in additional expenses, which the IEA wants as subsidies to paid to LPG companies, but which could be savings in the pockets of African households. We urgently need to focus on affordable clean electric cooking solutions and emission-free infrastructure, catering not only to cooking but all residential and SME energy needs. This shift will ensure a sustainable and economically viable future for Africa, and requires the same long-term investment that would be made for LPG bottling plants and refineries to be available for solar and other clean electric cooking technologies that are ultimately cheaper.