Sunday, April 25, 2010

Comparative Cooking Costs in Developing Countries

By Douglas Barnes and Keith Openshaw

Kerosene Lamps and Stoves, Hyderabad, India by D. Barnes
Recently we have just reviewed many of programs for improved stoves in developing countries, and we were quite surprised to find that there were few analyses of comparative cooking costs. In the glory days of country energy assessments comparing the cost of cooking to enlighten energy policy makers was very common. Today we stress energy efficiency, combustion, emissions, and carbon. However, if people are going to adopt these stoves the comparative cooking costs are an obvious important place to start. Keith Openshaw who has extensive experience with improved stoves is a coauthor of this posting. 

To revive this lost art, we will explain the steps for calculating comparative cooking. The first step is to assemble the necessary data. This includes:

  • Cost of the stove;
  • Lifetime of the stove;
  • Efficiency of the stove;
  • Price of fuels used burned by the stove including wood or other biomass fuels;
  • Fuel collection hours for biomass fuels;
  • Quantity of fuel consumed in the household per month; and
  • Average wage of agricultural workers.
One caveat is that the comparative costs in this analysis are hypothetical because they assume that families cook exclusively with one fuel. Also, we use world market prices and average fuel consumption levels as defined by many different household energy surveys. Thus, these figures can be considered as typical but they do not relate to any one country due to various policies to tax and subsidize household fuels. They at least give us some perspective on the comparative costs of cooking in developing countries.

For much more continue below....

To calculate the comparative cost of cooking after assembling the data, there are several different steps. First, the quantity of fuel typically used per month should be multiplied by the price of the fuel. This gives the monthly cooking costs. Generally traditional stoves are most commonly used in developing countries making it difficult to calculate cost for improved stoves. The fuel cost for an improved stove can be estimated by adjusting the cost of using a traditional stove according to the fuel efficiency improvement of the alternative stove. If a stove involves a 50% reduction in fuel consumption, then adjust the typical fuel consumption for a traditional stove by one-half. Of course it is better to use the actual consumption for a family using an improved stove, but this is often not available.

For collected fuels, there are two ways to establish the value of fuel collection. The market price can be used if there is local market for wood or other biomass fuels. However, if there is no local market for such fuels, then it is quite legitimate to multiply the average fuel collection time per month times the local agricultural wage rate. One issue that comes up often when I mention this technique is that people question whether the agricultural wage for a typical hour can be applied to fuel collection. The underlying assumption is that people in rural areas have time on their hands. However, this is a legitimate method, because this wage rate is generally established by a market. Also, in my many travels in rural areas of developing countries I have not found women with much free time. They are generally working from dawn to dusk.

Finally, the comparative cost of cooking cost is estimated by adding together the stove costs, the fuel cash costs, and the value of fuel collection time (see figure). The results presented in the figure are quite interesting. It is pretty obvious that biomass fuels across the board are less expensive than the petroleum fuels. Some may be surprised that using a traditional charcoal stove costs about the same costs as using LPG, but this is not unusual for urban areas in developing countries. Charcoal prices often follow petroleum prices once adjusted for cooking efficiencies. We also should note that it is not too common to cook exclusively with a wick kerosene stove which is the most costly stove, and this might be the reason for its high cost. Wick kerosene stoves are mainly used for simmering and slow cooking.

Interestingly, cooking with an open fire is the most expensive form of cooking with wood. Once you spread the price of an improved stove over its lifetime, the actual stove costs are quite low and completely overshadowed by the value of saved biomass or reduced collection time. This might suggest that in addition to the value of convenience and cultural cooking practices, a key to promoting improved stoves is to spread out the relatively unaffordable initial purchase costs of the stove. Once this is done the next generation wood stove has the lowest expenses for cooking compared to all other stoves. In fact, cost savings compared to an open fire can be as high as 40%. Even biogas stoves with their large initial costs are quite competitive after spreading the costs of the stoves over their lifetime.

We know that petroleum fuels are preferred in urban areas because they are convenient and easy to use, but they are more expensive than biomass fuels. By contrast in rural areas incomes are often low so people continue to use the less expensive biomass fuels. We often discount helping such households thinking that they will eventually catch up with the rest of the developed world and switch to petroleum fuels. But the cost differentials are quite high, and we are ignoring a quite attractive alternative that involves using the same biomass fuels they collect everyday in more efficient and modern ways.

After getting several requests for the background data, please click on the attached link for the Notes and Assumptions for Comparing Cooking Costs. 
Were you surprised with any part of these findings? Would additional research and development and expansion of markets make these new technologies even more attractive and affordable?

Answer the quiz or comment below.


NCseagirl said...

very interesting figures but where are you getting the data from?? we need to know

Unknown said...

Very good analysis. I have a couple of points/questions for the authors. First, I am curious as to why the cost of cooking with electricity was not included in the analysis for comparative purposes. I assume that it would be the most expensive option, even without counting the negative load impacts on the rest of the electrical system.

Second, I think that the analysis presented does a good job of conveying the importance of market-based transactions in determining costs. Clearly, the population of urban areas always engage in market-based transactions with the result that there is the jump in costs from the market-based to the non-market based options. This is an issue worth highlighting, as is done by the colors in the graph.

Thirdly, I am confused by the biogas estimate, as it seems to ignore the value of the labor time going into the management of the system. I suspect that this requires some explanation or rectification.

Unknown said...

I also would be interested in seeing some information on where the sources come from. But extremely interesting and useful!

Douglas F. Barnes..... said...

I have included a link in the post with the assumptions. There is a note on fuel collection for biogas. We feel the improved fertilizer and the fact that people collect it anyway means we should given a zero cost for collection time. But it could be an issue.

Unknown said...

It is a great paper. I liked it very much.

At the same time looking at the data you used, it is specific to the combined situation as in India, Malawi and Kenya with some international data on fossil fuels. That is not a criticism but a caution about whether the results hold with different costs.

A very useful extension could be to add an excel sheet with your formulae and persons working in the field could add new data for new places and see how this does or does not change.

One general conclusion that may be quite robust is that the cost of equipment or "capital" cost is dwarfed by fuel costs. That suggests a stronger case for subsidized equipment and not for fuel.

I look forward to continued posts of the high calibre you have maintained. Best.


Faithful skeptic said...

You didn't find women with free time on their hands? Meaning nobody read you or spoke to you?