This post was originally published by Empower Generation, which merged with Pollinate Energy to form Pollinate Group in 2018.
Written by Bennett Cohen.
Chet Soknia’s yard—part science lab, part graveyard of rusted machinery—stuck out amidst the green, idyllic island setting of Koh Pdao.
We had asked our Cambodia Rural Development Team (CRDT) guide, Tola, to take us to the island’s “battery guy”—the businessman who runs a generator to charge the villagers’ batteries, so that they can watch a little TV or light their homes at night.
Back in Phnom Penh, several people had told us about this business model—the most popular micropower business in Cambodia.
Many off-grid villagers purchase car batteries (the heavy, lead-acid batteries that get your car started when you turn the key) and use them to power a few hours of light or TV each night. These batteries, once depleted, are carried to, or picked up by the local battery guy. For a fee, the battery guy recharges batches of these batteries with a diesel generator, and then delivers them back to their owners, or holds onto them until they are picked up.
Fresh out of Rocky Mountain Institute (RMI) , a resource management think-and-do-tank with the unofficial motto “efficiency first”, this struck me as a terribly inefficient system. And where there’s a big chunk of efficiency to be gained, there is a business opportunity.
To start with, turning diesel into electricity wastes around 60% of the diesel fuel’s potential right off the bat, merely from conversion loss. More energy is lost converting the electricity into potential chemical energy (a charged battery). Further energy is lost when that battery is discharged to power a light or TV. At each step, CO2 and cold hard cash are evaporating into thin air, all because of inefficiency. Add to this the necessities of transporting heavy batteries back and forth via motorbike or a villager’s back, and of getting diesel delivered to an island, and you’ve got one hell of an inefficient energy supply model.
Furthermore, the batteries themselves only last for 6 to 24 months and cost between $30 and $200 dollars, depending on capacity and quality, and diesel prices are unpredictable.
With all these challenges in mind, I was interested to see how Chet Sonkia had managed to make a profit acting as his island-village’s battery guy.
As it turns out, he hadn’t. From the start, Chet’s business faced problems. For example, most of Chet’s customers’ could not afford motorbikes, so it was up to him to employ people to bike the batteries back and forth and pay for their gas and labor, which cut into his thin profit margin. The price of diesel, which fueled his whole operation, was also climbing and becoming less predictable—already expensive for an island village. Finally, Chet’s customers would return their batteries fully discharged and demand them back fully charged. This takes a huge toll on the life and capacity of a battery, which will last longer if it is prevented from fully discharging. (For example, in order to extend its life, the battery in a Toyota Prius will never actually reach zero charge, even when the display on the dashboard shows it as empty).
Despite the failure of Chet’s venture, we were very impressed by his entrepreneurship and his mechanical brilliance. He had financed the startup of his charging business with profits from other small ventures, without taking out any loans. He showed us a truck he had put together with parts from “totaled” old trucks and machinery he had collected.
“How did you learn to do this?” we asked.
“By observing others in town and just figuring it out”.
Amazing. Chet is the exact type of person we kept hearing about throughout our journey—the incredible village woman or man who, without much formal education, comes up with solutions to very difficult technical problems. We met a similarly talented individual through RDIC, who, with little to no education, had fashioned a water pump powered by a playground seesaw, and now teaches others to build similar systems in their villages. Talented, entrepreneurial and energetic people are coming up with energy solutions throughout the developing world. There is a book out about 14-year-old boy in Malawi who built a wind-power generator from scratch.
Anya and I hope to give these self-starters the tools and support they need to power their villages sustainably and at a profit.
Chet’s diesel-battery business model was not sustainable for many reasons. Environmentally speaking, diesel is a dirty business—from extraction to combustion—and supplies are finite. This is not some lofty opinion held by left-leaning environmentalists. Chet, himself, complained that the fumes from his diesel generator were toxic, and that the combustion was loud and upsetting to his neighbors. This was part of the reason he got out of the charging business.
Economically, relying on diesel supply for island power is poor strategy. Contrast the reliance on a constant flow of diesel fuel to a remote area to installing a solar panel for electricity generation. Once the solar panel is installed, the fuel (sunshine) delivers itself, and the price remains fixed (free). This is especially advantageous for an island in a country that does not produce any of its own fuel.
Finally, Chet’s customers were not investing in anything with the money they spent on batteries and charges. At the end of each battery’s life they were left with a dead battery and zero power.
What if the villagers’ energy budgets had gone to pay down the price of a solar home system or a biogas digester—technologies that should last for more than 20 years and offer renewable sources of energy? Such a model would not only provide power, but also lead to the accumulation of infrastructure and wealth in Chet’s village.
Chet’s one failed business hasn’t slowed him down. When we arrived to interview him, he was busy welding another Frankenstein-machine together. I got the impression he had 3 or 4 separate enterprises at various stages. His home seemed a bit wealthier than those of his neighbors.
We asked him about his interest in getting back into the charging business through purchasing a solar system. He said he would be interested, but that obviously the upfront costs posed a challenge, especially in Cambodia, where government corruption can add 60% to the costs of bringing any equipment into the country (currently no solar panels are manufactured in Cambodia, though this may change in the coming years). And still, the battery technology and delivery problems would remain.
Despite the challenges Chet’s charging business faced, Anya and I found him to be incredibly inspiring. Here is a local entrepreneur hungry for success in the energy supply business. We have since talked about many different models that might work for Chet to supply energy services to his village.
Rather than simply swapping solar for diesel, I think Chet’s village needs to entirely rethink its electricity supply strategy. Anya and I are interested in working with people like Chet to figure out a sustainable power solution for their communities. With other partners who can bring microfinance, vocational training, and community organization to the table, we think Chet’s village could be sustainably powered, with many benefits to the community and the planet.
Then again, if Cambodia’s planned large hydroelectric dam projects are built on the Mekong, Chet’s village will be under water, and relocation will be unavoidable (see previous post). With so many forces dislocating traditional communities and drawing villagers to big cities, another layer of complexity is added to the problem of powering villages and empowering people.
One businessman working on biomass-liquefaction projects in Cambodia suggested to us, “Look at a map and think about current trends. Before you commit to a village or community, you’d better be able to convince yourself that it’s going to still be there in twenty years.”
This stark warning reminded Anya and me that part of what we are trying to do is empower people to preserve and enrich their traditional ways of life. Perhaps if Chet’s island village were also an “energy island”—not reliant on expensive fuel from the mainland for insufficient power supply—the draw to the urban slums and factories would be dampened and the case for relocation would be weakened.