Developing New Business Models
Testing Possible Solutions
For more than a decade, we have been evaluating various options for providing energy to low-income populations, particularly in Africa. They include:
- Rural electrification via photovoltaic solar systems.
- LPG for use by remote and underprivileged communities.
- Gas-fired power generation for communities neighboring our sites.
- Diesel generators for micro-grids or groups of local artisans.
- Pilot short biofuel supply chains (biofuels produced and used locally).
Our goal is to identify the business models that will enable us to offer low-income populations a modern, reliable and affordable energy source that has a lower environmental impact and can be used sustainably and independently.
Enable As Many People As Possible to Access Energy
Energy solutions for the Most Vulnerable Communities
Energy is a basic necessity, in the same way as water or food, and access to energy is an essential driver of development. Yet more than 1.3 billion people worldwide, or 20% of the global population, have no access to power*.
To remedy this situation, Total introduced the Total Access to Energy program some 10 years ago. A project incubator designed to develop innovative, economically viable solutions, it is based on a novel, sustainable business model. The challenge it aims to meet is offering low-income households affordable, quality energy solutions that are modern, reliable, sustainable and greener than what they use now.
We can't call ourselves a global energy company and simply ignore the fact that two-thirds of the world’s population has no access to modern forms of energy. We strongly support the fight against energy and fuel poverty. Total has been involved in this since 2010, both in OECD countries and in the developing world. Our Total Access to Energy program provides solutions that are tailored to each situation.
Christophe de Margerie, Chairman & Chief Executive Officer, Total
Introduced in the latter part of the previous decade, the Total Access to Energy initiative has focused on three areas:
- Photovoltaic solar energy in non-OECD countries.
- Alleviating fuel poverty in OECD countries.
- Local use of associated gas from oil production in certain African countries.
Photovoltaic Solar Energy in Non-OECD Countries
In Africa and Haiti, some of the population, especially in rural areas, lacks access to power. We have responded to this problem by doing what we can to enable as many people as possible to access energy, through sustainable infrastructure tailored to local needs. This involves many challenges, including:
- Developing quality, affordable solutions.
- Designing an innovative, sustainable business model.
- Educating and informing consumers about solar products and their maintenance.
We have developed innovative business models and new distribution channels, including networks of local resellers.
As one of the first energy companies to explore this avenue, we still have much to learn. That’s why we enlist the help of various partners, including development experts such as Germany’s GIZ and the International Finance Corporation (IFC), micro-credit institutions, distribution networks, NGOs, local non-profits and community-based organizations.
Solar energy now gives the low-income populations of Dakar in Senegal, Yaoundé in Cameroon and Port-au-Prince in Haiti a genuine engine of development.
Democratizing Energy Access Through Photovoltaic Solar Technology
Our solar energy access project kicked off in January 2011 in four countries, Cameroon, Kenya, Indonesia and the Republic of the Congo. Its primary goal is to help provide lighting and charge communication devices in low-income communities.
The project markets reliable, affordable photovoltaic solar products, plus a number of related services such as two-year warranties and the pickup and recycling of end-of-life products.
They are available through our network of service stations and local distribution channels, with the help of local resellers that we train ourselves.
At end-2012, we rolled out the Awango by Total brand and deployed since the project in twelve more countries (Senegal, Haiti, Burkina Faso, Uganda, Myanmar, Niger, Nigeria, South Africa, Tanzania, Zambia, Bangladesh and Pakistan). Our goal is to sell a million solar lamps, to provide access to lighting and mobile phone charging to about 5 million people by 2015.
Fighting Fuel Poverty in OECD Countries
Some 15 to 20% of the population in developed countries is considered "fuel poor," meaning that they can no longer meet their twin needs for heating and transportation. In Europe they number 50 million to 125 million according to a 2009 report by the European Fuel Poverty and Energy Efficiency project (EPEE).
With that in mind, Total has launched the "Fuel Poverty" project in France, implemented by Marketing & Services, to achieve two goals: to develop innovative, more affordable, accessible solutions and to meet the growing expectations of stakeholders such as public authorities and civil society.
Total has committed more than €3 million over three years (2013-2015) to combat fuel poverty. We will use three metrics to gauge our success:
- Socioeconomic impact (number of insulation and heating system upgrades, number of people assisted or helped back into the labor market).
- Innovation as a driver (practices or innovative solutions transferable to our business lines).
- Stakeholder satisfaction levels (a changed perception of Total as someone helping to devise solutions to end fuel poverty).
So the Fuel Poverty project aims both to:
- Gain recognition for Total as a key partner in fighting fuel poverty, by:
- Providing access to efficient energy for all.
- Facilitating transportation to help people find jobs and a secure place in society.
- Innovate and adapt our businesses, by:
- Modifying our solutions to make them accessible to our poorest customers.
- Helping to nurture and grow new services.
Cutting the Energy Bills of Low-Income Households to Combat Fuel Poverty
Fuel poverty — which is when households spend more than 10% of their income on heating and transportation — is a growing problem in France. Responsibly providing energy to as many people as possible is the foundation of our vision. To achieve it, we have joined forces with the government to assist fuel-poor households, working through a French national program dubbed Habiter Mieux that provides insulation and heating system upgrades. The program cuts spending on heating fuel and is based on an agreement signed with French national housing agency ANAH in September 2011. Between now and end-2013, Total will help renovate 100,000 housing units. Funding for the program amounted to nearly €3 million in 2012.
Total is also implementing a host of transportation-related measures. We are partners with Voiture & co on a project being conducted in France's Hauts-de-Seine and Metz regions, offering personalized coaching and affordable access to vehicles to the unemployed. It aims to assist 20,000 people over a five-year period, to get 50% of them back into the paid labor force or keep them there.
Local Use of Associated Gas From Oil Production in Certain African Countries
Several E&P affiliates, including in Nigeria, the Republic of the Congo and Yemen, are currently involved in access to energy projects for local communities based on the development and use of gas produced at our sites.
In several countries, such as Nigeria, the Republic of the Congo and Uganda, we are now looking into the possibility of developing more participatory business models that bring together various stakeholders, including the host government, local power distribution companies and residents’ associations. By involving our stakeholders in these issues, we are making the local development and use of associated gas a sustainable, socially responsible way to promote access to energy.
* International Energy Agency (IEA), 2011