Access to energy - Schneider Electric

Access
to energy
BipBop Programme

Contents
Access to energy
Message from Jean-Pascal Tricoire ........................................................................ 3
The issues at stake ................................................................................................... 4-7
The requirements .................................................................................................... 8-9
The players ............................................................................................................ 10-11
Schneider Electric’s commitment ................................................................. 12-19
Schneider Electric | Special May 2010 Feature: | Access Sustainable to energy Development | N°1 - May 2008 | Access to energy

Message from Jean-Pascal Tricoire
Promoting access to energy for all,
without endangering the climate – this is
today’s major challenge.
We are at a turning point in the history
of our planet. Today, both public and private
energy is at the very heart of Sustainable
Development issues. 1.6 billion people
throughout the world do not have access
to energy and legitimately aspire to having
the same equipment and services as the
inhabitants of developed areas. Energy is
everywhere, in transport, services, industry,
education, health and housing. It irrigates
our mature societies. Therefore, access
for all to this resource remains one of the
essential keys to sustainable economic
development that is wellbalanced
between mature and emerging countries.
But increasing the world’s consumption of
energy means endangering another collective
resource: the climate. How can we face up
to this paradox? How can we produce
better, improve our energy efficiency and
promote access to energy for all?
This is the major challenge facing us today.
Schneider Electric’s different professions,
its world-wide set-up and the exceptional
cultural diversity of its teams endow it with a
special responsibility in this regard. It is our
ambition to become an actor in a virtuous
circle that links business, innovation and
responsibility. The emerging countries are
our markets of tomorrow. Today, imagining an
offer suited to people at “the base of the
pyramid*”, means contributing to their
development and preparing our common
future at the same time. As far as innovation
is concerned, it is now more essential
than ever that we succeed in inventing new
technologies and new services adapted
to different realities, capable of reconciling
performance and environmental respect.
Lastly, the responsibility dimension of our
action goes back a very long way. With the
Schneider Electric Foundation, we have
been involved for many years in educational
activities and integration of young people
throughout the world.
This special feature aims to go even further
and introduce you to all the issues
related to energy access, and the
sustainable solutions we are deploying
to face up to them.
Jean-Pascal
Tricoire
Chairman of the
Management Board
and CEO
* The expression “base of the pyramid” is often used these days to refer to people with the lowest income on a global scale
in a given country.
2-3

Access to energy,
a challenge for our
global village
Schneider Electric | May 2010 | Access to energy

The issues at stake
Access to energy is already an issue for countries
in the Southern hemisphere. It is also a real collective challenge
closely related to the question of pollution and global warming.
Today, almost a quarter of the world’s
population does not have access to
electricity, despite all the progress made in
certain regions. Certain countries, which have
a high proportion of “poor”, such as China,
are capable of supplying the majority of their
population with electricity. Others have
successfully launched rural electrification
programmes, such as Bangladesh where
some seventy electrification cooperatives
have been created over the last twenty years
and which now supply electricity to 40 million
people, or Brazil, where new innovative
projects have enabled new generators
operating on palm oil to be introduced into
rural communities. But requirements are still
considerable, especially in sub-Saharan
Africa and Southern Asia. Furthermore,
these requirements are evolving. Today,
4 out of 5 persons without access to
electricity live in a rural area, but tomorrow
the question will also arise in urban areas.
During the next thirty years the major part
of the world’s demographic growth will take
place in large urban agglomeration in
developing countries.
Due simply to their size and their increasing importance in world energy
markets, China and India are transforming the world’s energy system. Rapid
economic growth will undoubtedly continue to sustain the demand for energy in
these two countries and really contribute to improving the quality of life of over
2 billion people. This is a legitimate aspiration that the rest of the world must
integrate and support.
Nobuo Tanaka, IEA executive director
>60%
This represents the increase in the
demand for electricity in developing
countries by 2030.
Source : IAE 2007.
>47%
This is the amount of CO 2
emissions that
can be attributed to developing countries
by 2030.
Source : IAE 2007.
4-5

Energy, the key to development
Since the Rio de Janeiro summit, access to
energy has been considered as an essential
element for mankind’s sustainable
development. It is a fact that providing
modern energy services (heat for cooking,
refrigeration, lighting, etc.) not only enables
people’s quality of life to be improved,
but it also destroys the circle of poverty by
improving the efficiency of health and
educational services, by developing mobility
and by promoting the development of local
crafts, industry and urban services. Access
to these services, no matter how modest it
may be, has positive direct and indirect
consequences, which contribute significantly
to development. For example, a community’s
or a region’s simple ability to pump water
by means of electric pumps gives access to
drinking water, improves crop yields and
increases food supplies. Women and girls
can devote the time they used to spend
going to and from the well to learning
a professional activity. In other words,
favouring more equitable access to energy
means taking an extra step towards
attaining the Millennium Development Goals
defined by the United Nations’ General
Assembly in 2000 for solving problems
of extreme poverty.
Developing countries should not be condemned by the weight of
tradition or their poverty to repeat the same errors as their predecessors,
especially when other solutions are available. We cannot refuse them the right
to become industrialised and, in fact, they will need to practically double
their production of electricity in the coming years if they want to progress and
attain Millennium Development Goals.
Kofi Annan, at the 14 th session
of the UNO Sustainable Development Commission in 2006
Schneider Electric | May Special 2010 Feature: | Access Sustainable to energy Development | N°1 - May 2008 | Access to energy

The issues at stake
The base of the pyramid, a growth reservoir
The base of the pyramid represents the 4 billion people on our planet who live on less than
2 dollars a day. In his book “The Fortune at the base of the pyramid: Eradicating poverty through
profit”, C.K. Prahalad, a university professor and influential international consultant, proposes
that this population is not considered as a burden but as an immense potential reservoir of
consumers and entrepreneurs. And to meet the requirements of this target,
he suggests t hat major companies should work hand-in-hand with Non-Governmental
Organisations and local government authorities.
Rapidly increasing requirements
The other major issue for the coming years is
that of the sudden increase in requirements.
According to a scenario drawn up by
the International Energy Agency (IEA) in the
report it published in early November 2007
(World Energy Outlook 2007), developing
countries with the fastest economic and
demographic growth should account for
74% of the increase in the world’s primary
energy consumption, 45% of which will be
attributable to China and India. As a result,
the IEA is urging all countries to undergo
a transition, whose goal is to “decarbonise”
energy in order to reduce CO 2
emissions and
to preserve the planet from the disastrous
consequences of global warming.
Therefore, a new balance must be found
between goals that are often contradictory:
human development, economic growth and
environmental respect. Without any doubt,
this will involve a profound and “virtuous”
modification of the living pattern of the people
who inhabit the Northern hemisphere and
a search for alternative energy production
solutions in the Southern countries.
6-7

Today, 1.6 billion persons throughout the world,
or 300 million families, do not have access to electricity.
World map with captions showing the regions where requirements
are greatest.
Source : International Energy Agency, 2006.
2002 2030
Africa
Less than 10% of the population living
in West Africa has access to electricity.
In rural and peri-urban areas, electricity
connection rates rarely exceed 5%
compared with 35% in North Africa and
45% in Eastern Asia.
> In sub-Saharan Africa, 526 million
people do not have access to electricity.
Schneider Electric | Special May 2010 Feature: | Access Sustainable to energy Development | N°1 - May 2008 | Access to energy

The requirements
Asia
Primary energy requirements in Asia should increase by
8% to 10% over the first 30 years of the 21st century. In 2004,
the continent already represented 62% of the world’s growth
in energy consumption (source: Enerdata).
> Almost 900 million people still do not have access to
electricity, particularly in South-East Asia.
>$15
This the average monthly energy budget for the poorest families,
which represent 30% of their overall income.
8-9

The players
In every area of the world, there are programmes,
non-governmental organisations and private companies
endeavouring to promote access to energy.
Non-governmental Organisations
A certain number of NGOs are working, more
or less exclusively, on questions related to
energy. Electriciens Sans Frontières was
created in 1986 by employees in the Design
and Research Department of EDF (Electricité
de France). Today, this NGO has federated
a dozen regional associations with over
800 voluntary workers, mostly from EDF.
Over 20 years, more than a million people
have benefitted from the association’s actions.
The E8 was created just after the Rio summit
in 1992. This NGO has united 9 of the largest
electricity concerns in the G8 countries.
Since 1992, together with UN experts and local
partners, it has completed five projects and
is at present developing several programmes
on renewable energy in the poorest areas in
the world. Another example: the Habitat for
Humanity NGO, which works on housing
for the most poverty-stricken, is integrating
notions of energy efficiency in its programmes
and is developing solutions based on
renewable energy in certain countries,
such as Armenia, where it has equipped
homes belonging to poor families with solar
water heaters.
Schneider Electric | May Special 2010 Feature: | Access Sustainable to energy Development | N°1 - May 2008 | Access to energy

The players
International institutions
For a number of years, numerous
international programmes have been
endeavouring to reduce the world’s energy
“divide”. With the support of 24 European,
American and Asian countries, the African
Development Bank (ADB) works in
53 African countries. Notably, it has launched
the Finesse programme (Financing Energy
Services for Small-Scale Energy Users)
intended to promote deployment of
renewable-energy-based services in Africa.
The objective of the World Bank’s ESMAP
programme (Energy Sector Management
Assistance Program), managed in
partnership with the United Nations
Development Programme, is to increase
people’s access to modern energy sources,
especially in isolated rural areas.
The EUEI, the European Union Energy
Initiative for “the eradication of poverty and
sustainable development”, was launched
in 2002 at the Earth Summit and obtained
a joint commitment from the member states
and the commission. Lastly, the United
Nations Environmental Programme REED –
Rural Energy Enterprise Development –
acts as an incubator for enterprises and as
a business angel. It supplies funds to
companies in the form of a debt or shares,
enhances the value of the most profitable
projects and withdraws once the company
has become viable. It also acts as an advisor
by making qualified personnel available to
entrepreneurs.
Private companies
In the context of their social responsibilities,
certain large companies in the energy sector
also endeavour to promote access to energy
for people living in developing countries.
A member of the E8, EDF is participating in
several projects piloted by the E8 NGO
throughout the world. Its EDF Access
programme is a long term programme for
creating and running local companies for
selling energy services to rural populations in
developing countries, far away from power
grids. In 2003, in partnership with the WWF,
ABB launched an “access to electricity in
Tanzania” programme, whose aim is to
equip rural villages with installations that run
on biomass fuel. In India, General Electric
is deploying a rural electrification programme
that incorporates a certain number of
technologies from the GE renewable energy
portfolio. This year, the American giant has
set up a partnership with USAID and has
committed itself to giving support to two
initiatives made by the Indian government:
“Electricity for all by 2012” and “Rural
electrification / Rural business clusters”.
For more
www.iea.org
www.ademe.fr
www.un.org/french/millenniumgoals/
www.ckprahalad.com
www.electriciens-sans-frontieres.org
www.e8.org
www.habitat.org
www.afdb.org
www.esmap.org
www.areed.org
www.panda.org
10-11

Schneider Electric’s
commitment
The "BipBop*" programme
Business
Partner with
investment funds
to create
companies
dedicated to the
electrical business
for the Base of the
Pyramid.
B
BOP
P
I
Innovation
Build adequate
offers/solutions to
be a champion in the
electrical distribution
field fot the Base of
the Pyramid.
Support from
Schneider Electric
Foundation
People
Train young people from the Base of the
Pyramid in electrical skills, sponsor them.
BOP for “Base of the pyramid“. It is the expression commonly used to name
those with the lowest income in each country.
* BipBop is the name of an internal Schneider Electric programme.
Schneider Electric | May 2010 | Access to energy

Schneider Electric’s commitment
For many years, Schneider Electric has been committed
to a sustainable development approach. Today, the Group is passing
a new milestone by linking business, responsibility and innovation even
more closely together.
By incorporating Sustainable Development
objectives and indicators in its successive
company programme, Schneider Electric
had already placed Sustainable Development
at the heart of its strategy. “But today,
we are going even further”, explains
Gilles Vermot Desroches, Sustainable
Development Senior VP, Schneider Electric,
“by treating three problems, Business,
Innovation and People at the base
of the pyramid, in an integrated way, in
other words, by creating an offer adapted to
the requirements of populations at the base of
the pyramid (the innovation dimension),
by investing in innovative companies
(the business dimension) and by increasing
the levels of qualification
of base of the pyramid populations”
(the people dimension).
Virtuous dynamics
Associating these three dimensions together
means creating “virtuous dynamics”.
In this approach, increasing populations’
technical skills enables us to find better
qualified labour, to improve servicing and
maintenance and to distribute offers for
the base of the pyramid market more rapidly.
Also, acquiring administration and
management skills enables us to minimise
financial risks, to optimise company strategy
and to increase return-on-investment levels
(which can then be reinvested elsewhere
and thereby accelerate the “access to energy”
process). Improving the quality of an offer
(and its appropriateness to the demand)
enables us to generate the resources
needed to finance a training programme and
to train populations on an offer that is suited
to them (easy to use, to service, to exploit, etc).
Lastly, investment in innovative companies
stimulates the emergence of new ideas
and offers that are increasingly accessible,
approachable, and viable for the base of
the pyramid”.
>Over $430 billion
Per year, this is the estimated size of the “household” energy market in the base
of pyramid consumer segment, where annual income is less than 3,000 dollars.
Source: International Finance Corporation, “The next 4 billion, market size and business strategy at the base of the pyramid”, World
Resources Institute, 2007.
12-13

Innovation
Low-income markets, pretty unattractive?
Taking an interest in it today means preparing for the future.
>1
million:
households at the
Base of the Pyramid
have access to
energy thanks to
Schneider Electric’s
solutions at the end
of 2011
Prepayment, a solution suited
to the requirements of developing
countries
Today, the Group’s offer in terms of access to
energy is mainly borne by Conlog, it subsidiary
set up in South Africa, a company that joined
the Group in 2000. In many emerging
countries, electricity operators have difficulty
in managing payment of their invoices.
Conlog’s prepayment solutions (installing
counters in homes, setting up a network of
prepayment card sales points and a
management system on the energy operator’s
premises) provide an efficient solution to this
problem. There are numerous advantages to
this system: the operator obtains significant
cash flow and can save the cost of a
traditional invoice management system. On
the consumer side, access to energy is
simplified, without any extra cost for
subscriptions or cancelling subscriptions, and
managing energy budgets becomes easier:
you only consume what you can pay for. In
the Sudan, Conlog has installed a million
counters of this type for the national
electricity operator. In South Africa, the same
number of counters has been installed for
Eskom, a local electricity production and
distribution company.
The low cost housing market
The offer developed by Schneider Electric
in South Africa follows the same logic. Since
1994, with the “A home for all” government
programme, 1.4 million low-cost homes have
been built, putting a roof over the heads of
some 5 million people, amongst the poorest
in the country. Schneider Electric has set up a
partnership with a local company, Sonoco,
created by the former South-African football
star, Jomo Sono, for equipping these homes
whose technical characteristics are all very
similar. Sonoco installs kits which include
everything required by a basic household
electricity installation; it sells prepayment
cards to the occupants, operates prepayment
services and handles system maintenance.
The kits developed by Schneider Electric are
very easy to fit (one hour’s fitting on average),
which also provides a solution to the problem
of local installers’ technical skills.
Schneider Electric | May 2010 | Access to energy

Schneider Electric’s commitment
In-Diya LED-based lighting system in
India
As part of its commitment towards the BipBop
initiative, Schneider Electric unveiled its
In-Diya LEDbased lighting system in New
Delhi in February 2010. In-Diya aims to
provide lighting to people living with no or
unreliable electricity in India. It is a specially
designed LED-based lighting system that can
operate on main supply and/or solar, and
provides backup ranging from 8 to 15 hours
for indoor applications. The innovative offer
will play a key role in providing access to
reliable lighting to more than 500 million rural
people, thereby enabling them to take part in
the exclusive growth story in India.
In-Diya is a high-quality, affordable product
offering the following benefits:
> consumes 50% less power than an
11-watt compact fluorescent lamp (CFL)
and 90% less power than two 60-watt
incandescent lamps for the same light
output
> illuminates a 3.65m x 3.65m (12’ x 12’)
room for all normal activities and is
wall-mounted
> in its high-end version, costs less than
any CFL-based solar home lighting
system
> provides 50 000 hours of lighting
Half of the net profit earned from the sales of
In-Diya in India will be put back into the
Schneider Electric India Foundation to further
the cause of BipBop.
Also in India, the Schneider Electric
Foundation contributed to project iLead
(Institute for Livelihood, Educations, and
Development). The project consists of skill
development, training, and employment for
disadvantaged young people, as well as
entrepreneurship training for poor youth. A
pilot class of electricians started training in
2009. The goal is to train 4000 professionals in
six different locations by 2012, after which
they will be encouraged to launch their own
small business and deploy lighting solutions
in poor villages throughout the country .
LED lamp with battery backup
The innovative offer will play a key role in providing
access to reliable lighting to more than 500 million people.
Abhimanyu Sahu, Programme Manager, BipBop India, Schneider Electric
14-15

Business
Schneider Electric Energy Access Fund
The establishment of the Schneider Electric
Energy Access fund marked an innovative first
for a major industrial company in the area of
corporate social responsibility. Created with
the backing of Crédit Coopératif and PhiTrust,
the fund supports the development of
entrepreneurial initiatives worldwide that will
help the poorest among us obtain access to
energy. With an initial capitalization of ¤3
million, Schneider Electric Energy Access
provides financing for projects that are
designed to:
> help jobless individuals create
businesses in electricity
> promote the development of businesses
that provide energy access in rural
orsuburban areas
> support the deployment of innovative
energy access solutions that use
renewable energies for the Base of the
Pyramid
Schneider Electric Energy Access fund works
within the company’s BipBop Programme to
provide safe, green energy to disadvantaged
individuals. The structure of the fund, which is
designed to promote responsible
development, represents anoriginal and
innovative response to the latest French
legislation on employee savings. It is a new
societal commitment for Schneider Electric,
shared with our entire corporate community.
By supporting the development of businesses
involved in electricity and renewable
energies, Schneider Electric Energy Access
reflects our commitment to creating a
virtuous circle combining business,
innovation, and social responsibility.
Schneider Electric | Special May 2010 Feature: | Access Sustainable to energyDevelopment | N°1 - May 2008 | Access to energy

Schneider Electric’s commitment
People
The Schneider Electric Foundation supports projects all over the world
to promote access to energy and professional integration into electrical
trades.
Over the past 10 years, the Schneider Electric Foundation has supported hundreds of
children and young people in all of the Group’s host countries. The most ambitious projects
combine financial and human resources with a link to Schneider Electric’s businesses.
Jobs in electricity
The Group has decided to focus more fully
on jobs in electricity to give its commitment
more meaning and make its programs
more effective. Around the world, wherever
disconnected people are looking for job
opportunities, the Foundation will support
projects that provide training and an on-ramp
to long-term employment, especially in areas
related to electricity.
Access to energy
In today’s world, 1.6 billion people do not
have access to electricity. The Foundation
wants to help shrink this gap by providing
access to energy—a move that will also
provide access to development and
improved healthcare.
>10.000
young people at the Base of the Pyramid
trained in the electricity professions at the
end of 2011
In India, from
village to school
In India, Schneider
Electric is involved
in a project with
the Kanyare Colony,
a village located
in the province
of Kernataka.
The project’s initial
objective is to provide
electricity to the
village, which is the
home of 150 families
mainly earning their
living by gathering
fruit and vegetables
and producing honey.
The project’s second
phase consists of
training 20 young
people in electrical
trades; a training
programme that will
be extended to
a technical college
located at Misore,
the closest town.
16-17

The Foundation in action
Training future electricians in Brazil
In Brazil, the national industrial training
service (SENAI) is deploying an 80-hour
training programme in close cooperation with
Schneider Electric Brazil. Taught on nights and
weekends, this initiation to the basics of
residential electrical work gives low-income
youths an opportunity to learn the electrical
trade. Because the courses are offered free of
charge and outside working hours, both
attendance and the completion rate are high.
In 2009, 1200 young people participated in
the programme at 26 centres across the
country.
Hands-on experience in Nigeria
From December 3-7, 2007, students at Yaba
college of technology applied the electrical
engineering lessons given by Schneider Electric
team members in a hands-on workshop.
Participants were asked to verify and optimize
the electrical installations at Child Life Line,
a centre for the disadvantaged supported
by Schneider Electric Nigeria, its employees
and the Foundation.
Afterwards, a training session on installation
was offered that attracted nearly
400 students and 70 professors from
four Nigerian universities.
Schneider Electric | Special May 2010 Feature: | Access Sustainable to energyDevelopment
| N°1 - May 2008 | Access to energy

Schneider Electric’s commitment
Around the world
> Algeria
Atelier sans
frontières
Train disadvantaged
young people
to acquire the basic
knowledge
in electricity and
electronics.
> Brazil
Sociedade
Benfeitora
Jaguaré
Build a new
classroom, renovate
another one, propose
on-product training
for the teachers a
nd train 60 young
disadvantaged
people a year
in electrical
engineering.
> Costa Rica
Fundación
Cedes don
Bosco
Train 38 young
disadvantaged
people and
their teachers in
electromechanical
engineering,
bringing brand
new electrical
equipment.
> Egypt
Galal Fahmi
School
Renovating a
technical school,
training the teachers
and developing
a training program
for the pupils.
> France
Adie
Providing financial
assistance
to 50 long-term
unemployed
persons to help
them create
their own companies
in the field
of electricity.
> Indonesia
2 Vocational
schools et
Nurani Dunia
Renovate and equip
the laboratories
at the technical
schools in Banda
Aceh.
> Lebanon
Seeds of Hope
Partnering with the
European Institute
for Cooperation and
Development (IECD)
to upgrade training
capacity at
six technical schools
specialized in
electrical,
electronic and
electromechanical
studies.
> Central
Africa
The Feron Vrau
foundation
Giving social and
financial support
for the training
of engineers and
technicians
(recruiting and
training teaching
staff, purchasing
technical, scientific
and classroom
equipment).
> Russia
University for
Handicapped
people
Create a University
for handicapped
people, with
courses, selection
and exams and
delivery of a
Schneider Electric
diploma.
> Turkey
Cagdas Yasami
Destekleme
Dernegi
Provide financial
support for
50 young women
to enable them
to continue their
studies in electrical
and electronic
engineering.
18-19

Schneider Electric SA
Sustainable Development Department
35, rue Joseph Monier
92506 Rueil-Malmaison - France
Tél : +33 (0) 1 41 29 70 00
Fax : +33 (0) 1 41 29 71 00
Schneider Electric | Special Feature: Sustainable Development | N°1 - May 2008 | Access to energy
Butterfly - Crédits photos : Agence VU, Etienne Eymard Duvernay, Christian Rausch, Schneider Electric.