How are the social impact figures calculated?
We calculate the impact of the projects we fund based on the predicted usage, utilisation and benefits of the products that we fund. This is because it is generally not possible for us to get actual usage data in respect of solar home systems or electric vehicles and, in the case of mini-grids, our funding relationship generally ends at the completion of construction, whereas the environmental and social impacts may continue for many years. Advance estimation also enables our users to make more informed decisions at the point of investment.
Solar Home Systems:
The calculations displayed on our website and in your portfolio are estimates, based on calculations from the Global Off-Grid Lighting Alliance’s (GOGLA) Standardised Impact Metrics for the Off-Grid Solar Energy Sector (V4, April 2020).
The linked document provides an in-depth explanation of how these metrics have been developed, and how they can be used by different stakeholders within the sector, so if you are interested to learn more, please do visit GOGLA’s website or download their guidance on the standard impact metrics here.
In building our impact calculations for the information provided in your portfolio environment and across our website as a whole, we have made the following assumptions (alongside those indicated in the GOGLA guidance):
People having improved opportunities and livelihoods
We assume that there is an average of five people per household in the areas where our portfolio companies operate. Therefore, for each solar home system financed by investments made on Energise Africa, we calculate that five people have benefitted from improved energy access. The figure in your portfolio is calculated by multiplying the number of systems that your investment has funded by an average 5 people per household (rounded up to the nearest whole number).
CO2 emissions prevented from entering the atmosphere
We assume that from the point that funds are disbursed to the company, it will take an average of six months for them to order, receive and distribute the solar home systems to households. We also assume that each solar home system comes with a two-year warranty (as per the information provided by our portfolio companies) and that each solar home system therefore has a typical lifespan of 3 years. (Note that depending on usage and maintenance, this could be much longer in reality.)
We assume that each solar home system will typically replace one kerosene lantern, though in reality, larger systems may replace more lanterns, and some systems will be a replacement or an upgrade on an existing solar home system.
We work with GOGLA’s figure of 0.431 metric tons of carbon dioxide and black carbon emissions produced per kerosene lantern per year.
Hours of quality light
We assume that a solar home system is typically used for 350 days a year, to provide between 1.3 and 2.3 extra hours of light per day. This figure is aggregated across all the solar home system related investments in your portfolio.
Electric Vehicles
CO2 emissions prevented from entering the atmosphere
In the case of estimates for EV emissions savings, we calculate the figure per EV funded as follows (it is worth noting that, because EV’s are generally much more expensive than solar home systems, your investment may fund a fraction of the cost of one EV and therefore the impact attributable to your investment may be a fraction of the impact of one EV):
- We obtain an estimate of usage for each EV from the supplier or manufacturer and ensure that this is based on research or feedback from their users (hours per day).
- We then work out the electricity input required to operate the vehicle for that number of hours per day and identify the source of that electricity. If a non-renewable energy source, such as the grid, we can obtain data on the average CO2 emissions created for each MWh of power in the relevant country.
- The manufacturer will provide an expected lifespan for the vehicle.
The hours per day x electricity input x CO2 emissions (if relevant) x lifespan = the CO2 footprint of the vehicle.
We then calculate the CO2 emissions of an equivalent fossil-fueled vehicle:
- We assume the same hours of operation per day.
- We assume the same lifespan.
- We then obtain the hourly fuel consumption of an equivalent fossil-fueled vehicle
The hours per day x fuel consumption x CO2 emissions per litre of fuel x lifespan = the CO2 footprint of an equivalent fossil fuel vehicle.
The CO2 impact of each vehicle is then calculated as the CO2 footprint of an equivalent fossil fuel vehicle less the CO2 footprint of the vehicle.
People having improved opportunities and livelihoods
In the case of personal EV’s, we assume that one household will benefit per vehicle. As with Solar Home Systems, we assume that there is an average of five people per household. In the case of commercial EV, we assume that one business will benefit per vehicle.
Green Mini Grids
CO2 emissions prevented from entering the atmosphere
Prior to construction, the developer of a Green Mini Grid (GMG) will provide to us:
- the maximum generation capacity of the grid when constructed, measured in kilowatt peak capacity (“kWp”);
- the forecast actual power production as a percentage of kWp (“Annualised Load Factor”);
- the expected lifetime of the GMG.
The kWp x Annualised Load Factor x Lifetime = Total mWh of power that the grid will produce over its lifetime.
In order to calculate the CO2 avoided by generating the relevant mWh of clean power, it is necessary to calculate the CO2 that would be emitted by diesel generators generating the same amount of power. The current industry standard for this calculation is 0.79 Metric Tons of CO2 per mWh produced (https://www.feace.com/single-post/the-carbon-footprint-of-diesel-generators). The figure may often be higher in Africa due to the use of older and less efficient generators but that is not something we can measure in specific circumstances so we assume efficient generators.
The total mWh of the GMG is therefore multiplied by 0.79 to give the tons CO2 avoided.
People having improved opportunities and livelihoods
Prior to construction, the GMG developer will be required to carry out a socio-economic assessment of the impact of the GMG on the local community. This will include:
- the number of households that will be connected to the GMG;
- the number of small businesses that will be connected to the GMG; and
- the number of schools, clinics and places of worship that will be connected.
In calculating the number of lives improved, we will (as above for solar home systems) assume five people per household. We will count each small business connected to the GMG within our impact calculations as a business provided with access to clean power.
We do not count any additional social impact for the connection of schools, clinics and places of worship. While we believe that such connections are extremely important and impactful, the local beneficiaries of that impact may already have been counted as they will also be connected to the GMG from home. While clinics and schools will often benefit people from a wider area, we do not currently have a means to measure this, so we exclude all impact from our figures to avoid double counting.
Recognition of social and economic impact
At the time of investment, we will provide an estimate, calculated as above, of the social and environmental impact of the project that you are supporting. We then recognise that impact over the lifetime of the assets in question. This means that, for example, if you support the construction of a GMG, you will see the social impact recognised relatively quickly as the grid is constructed and commissioned and people are connected to power. The total environmental impact, however, will be recognised gradually over a much longer period of time as the grid provides power and people no longer need to use Diesel generators.