EarthSpark's Participant Power

Tackling energy poverty and unlocking local economic resilience through smart, community-scale, clean energy microgrids.

In Haiti, 75% of the population is without access to electricity. Reliance on charcoal and other expensive, harmful fuels has lead to deforestation, erosion, and increased vulnerability to extreme weather events. Energy poverty effectively barricades avenues for sustainable development. For many island nations at the mercy of climate change, resilience through robust and sustainable infrastructure is key. Energy access is development.

EarthSpark International is a non-profit researching, developing, and implementing market viable energy access solutions. We then spin-off and scale those solutions into clean energy enterprises like smart metering company SparkMeter Inc., and Haitian utility manager and retailer Enèji Pwòp S.A.

Our most prominent solution under development focuses on microgrid development. However, resilient, clean energy infrastructure isn’t solved by a single innovation. A feasible model is critical. By blending policy advocacy, technological and business model innovation, we launched our inaugural community-sized, hybrid solar, smart grid in rural Haiti in 2015. 

Currently, we have another 3 grids in development, effectively reducing household energy bills and harmful pollutants, enabling opportunity for education and enterprise, and empowering resilient communities. Our microgrids are “proving what’s possible” in delivering clean, reliable, affordable energy services. But the process and policy remain messy. By driving project-based change to confront this uncertainty head-on, we're able to “de-risk by doing”. 

Despite great progress, grant funded work alone will not solve energy access. Informed by thorough market research, interest from multiple municipalities, and an emerging national regulatory standard, microgrid development enabled by our public-private-partnership business model is closer to feasibility than ever before. Our grids currently under development utilizes integrated revenue streams, including grid operator use of our grids, consultation projects, and market development of super-efficient products. We’re building the foundation of a robust track record in “moving microgrids towards market”.

To that end, we propose spinning-off microgrid development company, Participant Power, to build an additional 20 grids in the next 3 years using blended finance. Each grid avoids 13.9 tCO2e of emissions per year, demonstrating the transformative potential in transitioning communities to clean energy access. Relinquishing a reliance on charcoal mitigates emissions from deforestation and its impact on reefs and agriculture, local mangroves and ecosystems can move towards stabilization, and communities can become resilient and responsive to dangerous climate change events, independent from their government’s capacity at assist. In Haiti, few communities understand this more than unelectrified, rural coastal communities as evidenced by our work in Les Anglais and Tiburon.

From households to local businesses, microgrids unlock potential for economic and environmental resilience in the face of climate change. The opportunity to implement our sustainable business model to this scale leverages future partnerships of impact across other under-served geographies. Our work in Haitian coastal communities has the potential to unlock the sustainable global transition to clean energy.

For any complex challenge, technology alone is not enough. We therefore take a wide-angle approach to solving energy poverty. Smart meter-enabled grids ensure technical efficiency and customer affordability, our PPP and blended finance model creates a feasible path towards scale, and our policy advocacy helps influence the evolving regulatory environment. We believe ‘feminist electrification’ both enhances the standing of women in the electrified communities and increases odds of success. We are not the only microgrid developers working towards energy access, however we are unique in our integrated approach: Proving what is possible; De-risking by doing; Moving microgrids towards market. 

Technological advances in solar + storage + smart meters and smart grid controls are making small-scale clean energy microgrids possible.  Combined with efficient end-use technologies like LED lighting, efficient electric cooking, and efficient small-scale industrial machinery, these microgrids can bring affordable, high-quality electricity to remote regions and unlock enormous local potential. But that a technology exists does not mean it has been adapted to rural microgrids. Indeed, EarthSpark needed to create its own smart meters – now spun out into SparkMeter, Inc. – in order to meet the needs of a rural microgrid operators. 

At the end of 12 months EarthSpark’s Participant Power will have launched 4 new community-sized smart grids to serve at least 6000 additional people. Participant Power will also have begun pre-development, including unlocking financing, for an additional 6 grids for the following 12 months. Concurrently, we will be revising and improving existing business processes, tools, and templates to further streamline future grid development and operations.

EarthSpark’s Participant Power will launch to build 20 microgrids over the next 3 years with blended financing. We will build 4 grids in Year One, 6 grids in Year Two, and 10 Grids in Year Three. Pushing project-based change under an SPV fast-tracks our ability to scale, which in turn moves microgrids closer to ‘market’, increasing our ability to do more with the same level of grant funding. In Year Two, we expect to launch a new SPV for an additional tranche of grids in Haiti followed soon thereafter with an SPV for microgrids in other geographies.

EarthSpark has so far secured LOIs from 15 mayors of promising candidate towns. Our goal is to build 20 in the next 3 years. Planning just 4 of these grids next year, we already have a 1 year backlog beyond that. We have no shortage of towns ready to go. At this point, we are able to pick the ‘best’ towns for each phase.

Our pre-development process includes extensive surveys and the formation of a PPP with the municipality followed by the construction of grid generation and distribution networks. EarthSpark spin-off, Enèji Pwòp, runs customer registration and microgrid operations.

EarthSpark is currently serving about 2000 people with the 1 grid we have in operation. We have another 3 grids in development to launch in Q4 2018. Each community-sized microgrid has a PV inverter and battery generation site and distribution system. Current projects are expected to connect to 900 households and businesses, directly impacting approximately 4,500 people and over 11,000 indirectly.

At the end of Year One, we expect our new 4 grids to connect approximately 1,800 households and businesses. This would directly benefit 9,000 and nearly 20,000 indirectly. At the end of 20 grids over 3 years we expect to make over 9,000 connections, that directly impact 45,000 and 99,000 indirectly (this does not include our current projects). These figures reflect an average town size of 450 connections as demonstrated in Les Anglais, Haiti. Savings on energy services, the elimination of fuels generating harmful pollutants, reduced deforestation, and opportunity for education, enterprise, and economic development are all possible through electrification.

The tiny EarthSpark team has been able to accomplish great things so far. Our field team has demonstrated deep knowledge and capacity to navigate technical, regulatory, and environmental risks and challenges inherent in microgrid development. Our executive team continues to contribute significant thought leadership in the emerging market space, while innovating business models necessary for sustainable scaling to market.

EarthSpark’s Participant Power will launch an SPV specifically to raise blended project finance for the next 20 microgrids. EarthSpark’s existing 4 grids will be contributed assets into this SPV, so there will be development of 20 and operation of 24 grids. With ~30% grant, 35% debt, and 35% equity, debt and equity investors should see modest returns over the 20 year project life. The low operational costs and differentiated tariffs that are possible with clean energy and smart meters require relatively high CAPEX but boast low OPEX. In our first grid, we have seen reliable revenues from electricity sales.

A multi-party PPP at the municipal level, combined with a licence built on World Bank best practices, offers a ballast against regulatory risk. Driving sector-wide change towards long-term sustainability in emerging markets is only possible by taking a project-based approach of “de-risking by doing”. Our 2015 national microgrid market study identified 80 towns for microgrid development in Haiti. With limited outreach, we already have 15 LOIs from mayors seeking microgrids. As processes continue to smooth, technologies costs fall, and operational efficiencies increase, our expanding track record in microgrid development will contribute important proof points towards investable microgrid projects around the world. 

The majority of Haiti’s population lives on or near coasts. The vast majority also lack access to electricity and other basic infrastructure, leaving communities vulnerable to natural disasters. Locked in a crippling cycle of energy poverty, people pay huge amounts of their incomes for low-quality fuels and third-party energy services.

EarthSpark’s Participant Power is committed to increasingly cost-effective infrastructure that transitions communities from charcoal to clean energy, building resilience to extreme climate events, and mitigating emissions while electrifying and increasing sustainable economic activity. A SOLVE partnership would allow ongoing thought leadership, non-technical development, and partnering with like-minded investors and organizations.

Smart metering to reduce costs was a significant gap to the operational feasibility of microgrids. EarthSpark spun off SparkMeter to address this in our own systems and beyond. Today, the primary barrier to feasibility is partnerships for financing. Regulatory clarity, process risk, community and political support, well-functioning technology with validated warranties, and the uncertainty of cost-recovery tariffs all undermine our ability to know the true costs of microgrid development. These uncertainties are not fatal to building investible relationships. With Solve’s support, EarthSpark can establish partnerships to spin-off Participant Power and build a track record to an investible future.