1. Who Profits from Energy Projects? Scaling Sustainable Economics of Energy Jyrki Luukkanen

2. Contents Energy for whom Energy by whom Scaling of energy projects

3. Energy for whom Energy for poor –Basic needs Food – cooking Water pumping –Education Light for evenings TV, radio, VHS, DVD –Communication Mobile phones

4. Energy for whom Energy for business –Income generating activities –Employment generation –Energy as a driver of economy –Trickle down?

5. Energy by whom Household supply –Who decides the system –World Bank? –Other donors? –How it fits the present market system –Would the same investment lead to better results in some other target area

6. Energy by whom Small enterprises and Cooperatives –Energy supply should become normal business, which does not need aid money –Economic sustainability crucial –Is the interest rate too high to promote ’normal’ business

7. Scaling energy supply What is the optimal level of energy supply –Household level –Village level –Several villages –Larger scale

8. Scaling energy supply  Decentralized systems Small is not always beautiful Scale of optimal energy system depends on circumstances Bottom-up optimisation does not lead to larger scale optimisation In income generating activities reliable supply of energy may be first priority

9. Scaling energy systems Sometimes large scale system may be optimal Sometimes smaller scale system may be optimal

10. Scaling energy systems Technology may determine the optimal scale of the system –Biomass based electricity production does not function in very small scale – ten villages could be better than one village Availability of skilled operators and workers, spare parts, economics of scale, reliability of supply –Photo Voltage is not good for rice mill but ok for TV –New technology development may change situation

11. Scaling requires integrated planning Integrating energy planning with other sectoral planning –Industrial planning –Transport planning –Forestry planning –Agricultural planning –Environmental planning –Education planning –Poverty reduction Prioritizing –Strategy building –Short and long term perspective

12. Thank you Jyrki Luukkanen Tulevaisuuden tutkimuskeskus Turun kauppakorkeakoulu jyrki.luukkanen@tse.fi jyrki.luukkanen@tse.fi