Productive use of energy – more than just a buzzword
While not a new concept, Productive Use of Energy (PUE) has recently become a buzzword amongst energy access practitioners.
As the off-grid electrification sector matures, the focus on PUE seems a logical next step to stimulate (socio)economic development. But how can we turn a buzzword into viable business cases?
The use of energy for income-generating activities can help to improve the viability of business models. Various new initiatives and programmes are emerging to stimulate productive uses of energy and integrate it into existing and new business models.
An initial analysis by SNV shows that development organisations and companies, engaging in PUE for various reasons, use different PUE definitions and objectives. This sometimes leads to misalignment in goal setting and measurement of success, e.g. PUE solely aimed at improving the viability of business models, or PUE to achieve broader socio-economic goals.
Standardisation of PUE definitions, dissemination of knowledge and toolkits, and more exchange on successes and challenges can help to create a better understanding of effective PUE promotion interventions.
The PUE focus in the energy access sector is nascent, and few examples exist of scalable business models. Most market development support is focused on pilots and grants for R&D, innovations and early-stage businesses.
The sector should take a more pro-active approach to design support measures that facilitate scalability. This requires an approach where R&D, business development support and market development are simultaneously addressed. Intensified collaboration is needed between researchers, manufacturers, distributors, NGOs, financial institutions and governments. This can be achieved through integrated, flexible project designs including phased grant and support measures, cross-sectoral partnerships, space for innovation and longer funding cycles.
In challenging times, collective effort is needed to move the sector forward. This is an opportunity to learn and work together to make Productive Use of Energy not just a buzzword but an integral part of energy access.
Notes:  SNV has experience with PUE promotion in the energy-agriculture nexus and specifically in commercial settings: integrating PUE into agricultural value chains to increase climate resilience (CRAFT, INCREASE, DFCD), using RBF mechanisms to stimulate PUE adoption (BRILHO Mozambique, EnDev Tanzania, EnDev Kenya), improving the viability of a mini-grid through productive uses (Mashaba mini-grid, Zimbabwe) and by promoting farmer-led and market-based smart water products and services (SWA, Kenya).
Photos: Copyright SWA
This article was originally published in the August edition of the Alliance of Rural Electrification (ARE) Newsletter which you can find here.