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Costs and Benefits of Clean Energy Technologies in the Milk, Vegetable and Rice Value Chains

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Costs and Benefits of Clean Energy Technologies in the Milk, Vegetable and Rice Value Chains Costs and Benefits of Clean Energy Technologies in the Milk, Vegetable and Rice Value Chains A. FLAMMINI, S. BRACCO, R. SIMS, J. COOKE, A. ELIA INTERVENTION LEVEL JULY 2018 Costs and Benefits of Clean Energy Technologies in the Milk, Vegetable and Rice Value Chains A. FLAMMINI, S. BRACCO, R. SIMS, J. COOKE, A. ELIA INTERVENTION LEVEL Published by the Food and Agriculture Organization of the United Nations and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH ISBN 978-92-5-109992-6 (FAO) The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO), or of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO, or GIZ in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views or policies of FAO, or GIZ. FAO encourages the use, reproduction and dissemination of material in this information product. Except where otherwise indicated, material may be copied, downloaded and printed for private study, research and teaching purposes, or for use in non-commercial products or services, provided that appropriate acknowledgement of FAO as the source and copyright holder is given and that FAO’s endorsement of users’ views, products or services is not implied in any way. All requests for translation and adaptation rights, and for resale and other commercial use rights should be made via www.fao.org/contact-us/licence-request or addressed to [email protected]. FAO information products are available on the FAO website (www.fao.org/publications) and can be purchased through [email protected]. © FAO, 2018 This information product was funded by GIZ. ABOUT PAEGC In 2012, The United States Agency for International Development (USAID), the Government of Sweden (SIDA), the Government of Germany (BMZ), Duke Energy Corporation, and the United States Overseas Private Investment Corporation (OPIC) (collectively, the “Founding Partners”) combined resources to create the Powering Agriculture: An Energy Grand Challenge for Development (PAEGC) initiative. The objective of PAEGC is to support new and sustainable approaches to accelerate the development and deployment of clean energy solutions for increasing agriculture productivity and/or value for farmers and agribusinesses in developing countries and emerging regions that lack access to reliable, affordable clean energy. PAEGC utilizes the financial and technical resources of its Founding Partners to support its innovator cohort’s implementation of clean energy technologies and business models that: (i) Enhance agricultural yields/productivity; (ii) Decrease post- harvest loss; (iii) Improve farmer and agribusiness income generating opportunities and revenues; and/or (iv) Increase energy efficiency and associated savings within the operations of farms and agribusinesses - while stimulating low carbon economic growth within the agriculture sector of developing countries and emerging regions. For more information, visit PoweringAg.org IV COSTS AND BENEFITS OF CLEAN ENERGY TECHNOLOGIES IN THE MILK, VEGETABLE AND RICE VALUE CHAINS Contents ACKNOWLEDGEMENTS ................................................................ xi ACRONYMS AND ABBREVIATIONS ...................................................... xii EXECUTIVE SUMMARY .................................................................. xv Key findings ............................................................................. xviii Knowledge gaps ......................................................................... xxv Recommendations . xxvi 1 INTRODUCTION ................................................................... 1 2 AGRIFOOD VALUE CHAINS AND ENERGY INTERVENTIONS .......................... 5 2.1 Value-chain approach ............................................................. 6 2.2 Agents and stakeholders .......................................................... 7 2.3 Adding value along agrifood chains . 9 2.4 Sustainability of value chains ....................................................... 10 2.5 Pro-poor technologies ............................................................ 11 2.6 Gender-sensitive approach ........................................................ 12 3 METHODOLOGY ................................................................... 17 3.1 Feasibility analysis . 17 3.2 Cost-benefit analysis ............................................................. 20 3.2.1 Financial cost-benefit analysis ................................................. 23 3.2.2 Economic cost-benefit analysis ................................................ 27 3.3 Externalities and co-benefits ...................................................... 32 3.3.1 Environmental impacts ...................................................... 34 3.3.2 Socio-economic impacts ..................................................... 47 3.4 Sensitivity analysis ................................................................ 56 4 COSTS AND BENEFITS OF THE SELECTED VALUE CHAIN TECHNOLOGIES ............ 59 4.1 Milk value chain .................................................................. 60 4.1.1 Biogas for power generation from dairy cattle .................................. 61 4.1.2 Biogas-powered domestic milk chiller .......................................... 88 4.1.3 Solar milk cooler ............................................................ 112 4.2 Vegetable value chain ............................................................. 135 4.2.1 Solar cold storage ........................................................... 136 4.2.2 Solar-powered water pumping ............................................... 143 4.3 Rice value chain .................................................................. 160 4.3.1 Rice husk gasification ........................................................ 161 4.3.2 Solar-powered domestic rice processing ....................................... 181 4.4 Relevance of indicators to selected technologies and to SDGs . 201 5 DISCUSSION AND RECOMMENDATIONS ............................................ 207 5.1 Key findings ..................................................................... 207 5.2 Knowledge gaps ................................................................. 214 5.3 Recommendations ............................................................... 215 REFERENCES AND FURTHER READING .................................................. 219 V COSTS AND BENEFITS OF CLEAN ENERGY TECHNOLOGIES IN THE MILK, VEGETABLE AND RICE VALUE CHAINS Tables Table ES.1. Indicators for non-monetized environmental and socio-economic impacts. ......... xvii Table ES.2. Financial and economic analysis results for the six case studies selected from the milk (M), vegetable (V) and rice (R) value chains . ............................ xix Table ES.3. Link between selected agrifood energy technologies and the SDGs (above) and targets (below) .......................................................... xxiii Table 3.1. Items to be considered in a financial CBA of energy technologies . ................. 26 Table 3.2. Items to consider in an economic CBA of energy technologies . ................... 30 Table 3.3. Performance of cookstoves and emissions in tiers, as defined by the ISO International Workshop Agreement . ...................................... 39 Table 3.4. Tier system classification for access to electricity services . ........................ 49 Table 3.5. Tier system classification for access to cooking solutions . ......................... 49 Table 4.1. Choice of anaerobic digester designs according to scale of plant . .................. 63 Table 4.2. Commonly used type of digesters in the dairy chain ............................. 64 Table 4.3. Advantages and disadvantages of dairy farm biogas for power generation systems . .. 71 Table 4.4. Kilifi biogas for power generation plant: Installation cost assumptions . .............. 77 Table 4.5. Financial CBA (biogas for power generation) . ................................... 79 Table 4.6. Summary of environmental and socio-economic impacts . ........................ 85 Table 4.7. Economic CBA of the case study (biogas for power generation, 150 kW) . .......... 85 Table 4.8. Main advantages and disadvantages of biogas-powered domestic milk chillers ....... 93 Table 4.9. Technical details of the SimGas biogas-powered domestic milk chiller . ............. 96 Table 4.10. Financial CBA (biogas-powered domestic milk chiller) . ........................... 101 Table 4.11. Value-added costs for 1 litre of processed milk in Tanzania in 2012 . ................ 103 Table 4.12. Summary of environmental and socio-economic impacts (biogas-powered domestic milk chiller) ........................................ 109 Table 4.13. Economic CBA of the case study (biogas-powered domestic milk chiller) ........... 110 Table 4.14. Indicative system costs for cooling 500 litres of milk per day for systems with lead acid battery (LAB) and ice bank storage ..............................
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