Newsletter - June 2017

GLPGP June 2017 Newsletter

We and our partner countries and institutions are accelerating our work and impact. Over 20 countries have now sought GLPGP assistance to expand LPG use significantly. With EU and other funding, we are actively adding to our international expert and country-level teams. In Cameroon, the government and GLPGP launched an interministerial LPG investment committee to guide financing and implementation of the €400 million national LPG master plan, and our microloan pilot programme is going strong—and going viral. Kenya is rapidly advancing its LPG reform agenda and preparing a major LPG expansion with GLPGP assistance. The new KfW report on LPG is being cited throughout the development community. 2017 is shaping to be all the year for LPG for truly clean cooking that we and so many developing countries hoped. Read on for more details.

Global LNG and LPG expert, Kimball Chen, Chairman of the Global LPG Partnership says that demand for Liquefied Petroleum Gas (LPG) has spiked as awareness of its benefits has grown over the years. It is increasingly viewed as a clean and affordable fuel for clean cooking in the near term, until a viable solution using non-intermittent renewable energy becomes available.

However, the spike in demand has also meant upward pressures on prices. The price of LPG has risen in recent years in many countries, including in India, although subsidies there are helping to mitigate this for below poverty line families, as the country works on a massive national program to encourage LPG adoption and use for clean cooking. Keeping LPG affordable is a priority, and governments have a key role to play.

“Countries need to have low distribution costs and a sustainable cylinder distribution network for nationally affordable LPG. These are things that governments can play a bigger role in achieving, because any single company would not have sufficient impact alone.” Mr. Chen said. “LPG in cylinders is not a simple business that can be developed unilaterally; governments need to set appropriate regulations, ensuring safety and constant supply of LPG, and companies must adhere to them.”

Mr. Chen also pointed out three ways that governments can boost LPG usage, while maintaining prices:

1.  Introduce laws which promote cylinder investment and cooperation among companies. For example, companies can be made to use shared facilities such as centralized filling plants and cooperate on the purchase of cylinders.

2.  Encourage infrastructure investment in the LPG industry.

3.  Governments can look at building and operating centralized filling plants, so that filling plants are not tools for competition between companies, but rather a shared tool for expanding the distributors network. Optimizing capital expenditures this way also helps keep costs and LPG prices low.

“The goal is to introduce policies which ensure that the LPG industry operates more efficiently,” said Mr. Chen.

Some countries have already introduced policies to encourage the sharing of resources among LPG companies. For example, in Portugal, France, and Morocco, there are centralized LPG filling plants that refill cylinders for all companies.

But many developing countries need help to navigate these challenges. Mr. Chen said that the Global LPG Partnership believes it is already making a valuable impact by providing developing countries governments advice - at their request - on ways to coordinate policies and regulatory changes. In recent years, GLPGP has worked extensively with the governments of Cameroon and others in Africa to support scaled up LPG usage.

One example is that since 2015, GLPGP has been working with the government of Cameroon under the coordination of the Ministry of Water Resources and Energy (MINEE) to help create the country’s first national LPG Master Plan. The plan was completed and adopted by the government in December 2016. The plan defined new policies, regulations and investment projects to support increased LPG supply, availability and affordability, with the goal that 58% of Cameroonians will use LPG for their cooking needs by 2035. Currently, about 12% of households use LPG.

"In the experience of GLPGP," said Mr. Chen, "LPG remains affordable for domestic consumers, not primarily because of the price on the commodity markets, but when governments support needed national planning, expansion, and sharing of resources in their domestic value chain to enable greater efficiency in the industry."

A new study authored by experts serving on the Clean Cooking for Africa Scientific Advisory Board (SAB), convened by KfW, examines the impact on health, climate and forests, scalability and affordability of liquefied petroleum gas (LPG) in reaching global development goals. KfW convened the SAB to strengthen the evidence base for clean cooking with LPG.

Published in March 2017, the peer-reviewed report found a strong case for the use of LPG in reaching UN Sustainable Development Goal 7 - to ensure access to affordable, reliable, sustainable and modern energy for all. The report finds that transitioning the 3.1 billion people currently using biomass or kerosene for cooking to LPG would contribute little or no net climate warming effect. Moreover it would improve health and productivity of families, while preserving forest resources. Specifically, transitioning to clean cooking fuels would: provide significant direct health benefits by mitigating the 4 million premature deaths annually caused by household air pollution (HAP); eliminate time pressures associated with biomass collection, allowing women to enter labor markets and children to attend school; and lessen the pressure on forest resources, especially where wood fuel is harvested non-renewably.

While LPG has been prioritized as a preferred clean cooking fuel by a number of country governments to address problems associated with energy-related air pollution (including HAP), forest preservation, and economic development, the report notes that enabling policy frameworks must also address affordability, accessibility, and safe use of LPG. They can be used to address some of the hurdles associated with transitioning low-income and rural populations to using LPG. Targeted assistance to help households acquire the stove systems, cylinder and equipment as well as for re-filling are a key component of LPG for clean cooking policy in India, Brazil and Peru. Well planned investment and building sound infrastructure are also critical to helping accelerate adoption within nations.

The full text of the report can be found here (pdf).

GLPGP received a donation from the Clif Bar Family Foundation, a strong advocate for safeguarding public health and the environment, to support its community level work in Cameroon, where it is piloting the "Bottled Gas for Better Life" microfinance program.

The Bottled Gas for Better Life program, launched in February 2017, provided an initial 150 low-income families with small loans to help them afford the upfront costs associated with making the switch from solid cooking fuels to LPG. Loans will also be provided to additional families in follow on phases of the project, based on good results from the initial phase.

Kimball Chen, Chairman of GLPGP, said, “We are delighted and grateful for this endorsement of our work from the Clif Bar Family Foundation. This support will help make LPG more accessible to low income communities in Cameroon, addressing deforestation in that country, and supporting better health for families benefiting from the use of LPG for clean cooking.”

Leading scientists and researchers working at the nexus of energy access and public health gathered at the US National Institutes of Health in Bethesda, Maryland from June 5-6, 2017 to discuss interventions and research efforts funded by NIH’s Implementation Science Network. Case studies presented spanned a range of clean cooking fuels including LPG, ethanol, pellets and biogas.

GLPGP presented its ongoing retrospective evaluation of Indonesia’s “Zero-Kero” national kerosene-to-LPG conversion effort, together with Clean Air Asia.

Other LPG-related evaluations included cases from Ghana, Ecuador, Peru and Cameroon, with the latter study focusing on GLPGP’s critical role in the country’s national LPG Master Plan and its implementation. Meeting participants also discussed ways to disseminate these important research findings to the scientific and energy access policy communities. Stay tuned for more on this in the months to come.