Creating markets for next-generation clean cookstoves - an interview with Dennis Barbian
As SNV’s Market Acceleration for Advanced Clean Cookstoves in the Greater Mekong Sub-region project is coming to an end, we’re checking in with our expert Dennis Barbian who shares with us some of the unique experiences gained over the past 4 years’ journey of introducing an entirely new generation of cleaner and healthier cookstoves in Southeast Asia.
You have been involved with this project from the beginning – how did it all start and what’s the big idea?
There are a staggering 65 million people in Cambodia, Vietnam, and Laos that still depend on wood and charcoal to cook their daily meals! Many people already know that this, of course, has an impact on local forest resources, and also releases greenhouse gases that harm our global climate. But there is also a huge health impact to this that we felt didn’t get as much attention as it should.
According to the World Health Organisation, 60,000 people die annually in these three countries as a consequence of inhaling smoke from cooking. This is a number close to the number of deaths caused by diarrhoea, malaria, HIV/Aids and tuberculosis combined!
Some of the most adverse health impacts of traditional cooking with biomass are respiratory diseases including pneumonia and lung cancer, heart diseases, cataracts and blindness, and prematurity and low birth weight. This so-called household air pollution (HAP) that pollutes kitchens and ambient air is a huge and growing health crisis in this region – and mostly affects women and children.
What can be done to address this?
Fortunately, there’s a new generation of so-called “Advanced Biomass Cookstoves” that started emerging about 5 years ago or so that can drastically reduce these health hazards. With their unique engineering, they fully combust all the toxic matters in biomass smoke - with some of the best stove models releasing almost no smoke and very few (if any) emissions. It’s a pretty ingenious feat of technology!
Many practitioners around the world have come to realise that clean cooking interventions need to start focussing more on this type of stove if we are to achieve health impacts in people’s lives. But there’s been very little experience globally so far with the large-scale introduction of this novel technology, and there’s a lack of intervention models that would achieve a rapid, transformational uptake of this energy technology. When we first started working with this technology, we didn’t even really know yet how it would fare in real households, and whether people would embrace the stoves. The stoves were also virtually unavailable to people in this region, and we knew we had a start from the ground up if we want to build a solid long-term supply for this new kind of cookstove.
When the opportunity came along to partner with Energising Development(EnDev) to give this a try, we thought it would be useful to contribute to the conversation about this and see what we can achieve. A big experiment of sorts if you will – but one which we felt was worthwhile to advance our understanding of this issue. The project turned out to be very rich in new experiences and learnings that we hope many peers will benefit from and will inspire similar interventions in the future.
So what’s so unique about this project?
Well, next to introducing a novel technology that was completely unavailable and with which there was not much experience yet, we also chose a new approach, called results-based financing. The idea is that we need to involve the private sector if we are to reach SDG7 that aims for clean energy for all. This is in fact very much in SNV’s wheelhouse, with our extensive experience engaging the private sector in improving energy access for people in developing countries and catalysing energy markets that self-propel after our projects end.
Companies often face risks and challenges when attempting to operate their business in developing countries, and particularly when scaling their operations into new, unknown markets. With RBF we can provide financial incentives to the companies to deliver their energy products and services in untapped communities, while at the same time leveraging their own investments.
While SNV has a lot of experience in results-based financing, in this project we used RBF in a way that had never been done before: rather than setting incentives upfront, we allowed companies to compete for incentives through an auction. This way it would be market forces that determined the required incentives, and incentives would gradually phase to the point where companies can operate on their own without any support.
So, a lot of “firsts” and new things indeed!
So what did the project achieve?
In Cambodia, we literally started at zero market, with the most commonly available cookstove that 90% of all Cambodian households use being a traditional stove that ranks lowest (Tier 0) on the ISO tier scale that measures cookstoves fuel efficiency and emissions. Market research we conducted found that there was a considerable appetite among Cambodian households in upgrading and modernising their cooking equipment beyond what was available to them at the time.
So we started to approach international manufacturers of higher tier biomass stoves – such as Mimi Moto, Prime, and African Clean Energy – to stimulate their interest in coming to the Cambodian market. We knew this was a big ask, given that they were not very familiar with this region, prioritised larger markets elsewhere, and would need to make significant investments to build up their sales channels here. But we knew our RBF incentives and our support was an attractive proposition!
We also found a number of local Cambodian “last-mile companies” that cater to the base-of-the-economic-pyramid (BoP) with a range of products such as water filters and latrines, who were keen to try out selling these new stoves. With the project, we essentially created a trading platform that linked the international manufacturers to the local distributors and gave local companies the opportunity to get their hands onto the new stoves without needing the working capital to buy large quantities by themselves.
Long story short, a few years later, international stove manufacturers have successfully entered the Cambodian cookstoves market, and have built business relationships with local distributors that now have access to Tier II and higher stoves for the first time, gained initial experience selling these stoves, and increasingly honed in on business models that make them a profit, despite the higher prices of these stoves. Both manufacturers and distributors have created jobs along the supply chain for these stoves in and outside of Cambodia (read about our ‘Employment & investment Study’). Most importantly, with almost 13,000 stoves sold so far in nearly all of Cambodia’s 25 provinces, these actors made cleaner cooking technologies accessible to Cambodian households for the first time, who seem to be liking their stoves a lot. Through the auction mechanism, RBF incentives for both international manufacturers and local distributors to operate in the Cambodian market have reduced over time.
How about Vietnam and Laos?
In Vietnam, before the start of the project, there were already some local producers of these more advanced cookstoves – a budding local industry if you will. But none of the stoves reached very high emissions and efficiency levels. Vietnamese producers were in dire need of some help to get their products up to scratch. SNV’s project supported the set-up of a test centre for biomass cookstoves in Vietnam and provided engineering advice to the local producers. This led to the highest-quality production of these stoves in the country we’ve seen to date. Within a few years, the young local industry has grown – not only in terms of product quality, but also in terms of geographical reach, production output, and overall market share compared to other cookstove products. More than 32,000 stoves were sold in 53 out of Vietnam’s 64 provinces, and we’re seeing some amazing impacts this already had on improving daily lives of Vietnamese households.
In Laos, we had a difficult time finding a better stove technology to would be acceptable to local cooks. After much trial and error, our SNV team of experts decided to design a new stove from scratch. We’re proud to say that it’s a very efficient stove that achieves fuel savings of 40% against the most common baseline stoves, and with a $6 retail price tag is very affordable. By the end of the project, we managed to get distribution structures in place in two remote highland provinces where no other forms of improved cooking equipment were available yet.
These are really some amazing results. But was it all positive?
Well, it wasn’t a walk in the park necessarily. As with any innovation, there are always challenges, and things simply don’t change overnight. We were certainly very ambitious with the targets that we gave ourselves, given the early stage markets that we found in these countries and the experimental character of this project. Markets take time to develop, and there’s still lots of work to do, but we feel we laid a good foundation, and we’re at a very different point now than to where we started. We also think that we can look back at a unique set of experiences in large-scale higher-tier stove deployment, and can share important insights about the real-life performance of this technology, consumer acceptability and adoption, and the usefulness of the RBF tool as a new way to catalyse energy access.
And what does the future have in store?
In Cambodia, local production of higher-tier stoves will start for the very first time by the beginning of next year. We’re glad to see that there are a number of private sector ventures that have formed in this newly created market that will be able to sustain themselves and keep access to clean cookstoves going for Cambodians after our project ends. From zero market to localisation of formerly foreign products!
In Vietnam, we really think the nascent industry for high-tier cookstoves could benefit from forming an industry association, and introducing a quality label that would help Vietnamese households identify better cookstoves, and support our government partners in promoting this technology as a viable option to address household air pollution.
In Laos, we want to build on our highly successful previous Improved Cookstoves project that saw more than 150,000 ICS disseminated during the project lifetime, and has since been seeing sales of 5,000 ICS in Laos every month without any project assistance. Building on this blueprint, we can double our impact by expanding to new provinces with additional stove producers.
Fostering a reliable supply of sustainable biomass fuels such as pellets is also never far from consideration when we work on developing markets for cleaner cookstoves, and we might have some things in store around this for Cambodia next year.
And of course, there’s so much knowledge we’ve accumulated about the ins- and outs of cleaner cookstoves that we want to share with a wider audience, so we’ll be sure to continue engaging with other practitioners.