Comparing the costs of cooking with different fuels – mini-grids in Tanzania

By Dr. Nigel Scott (Gamos Ltd.)

There is a common misconception in many countries that electricity is too expensive for cooking. Cost effectiveness of cooking with electricity has been discussed in some detail in ESMAP (2020), but the scenarios presented illustrate how the relative costs of cooking with different fuels depend on the local context. In a recent paper, we took one of the most challenging contexts for electric cooking – mini-grids in rural Tanzania – and found that even at the high tariff rates charged on mini-grids ($1/kWh), using an energy efficient electrical appliance is the cheapest option for some foods.

The paper builds on work previously undertaken on an electric pressure cooker (EPC) pilot programme convened by the Access to Energy Institute (A2EI) and addresses three questions:

• What are the relative costs of cooking with different fuels?
• What mini-grid tariff would enable electric cooking to be cost competitive with traditional fuels?
• How do relative fuel costs (electricity and charcoal) affect adoption of electric cooking?

The analysis is based on fuel and energy data from a Cooking Diaries study, which is combined with fuel price data from two separate surveys conducted during the study.

The cost of cooking is largely dependent on the price paid for fuels. The paper shows that households buying charcoal in small amounts can pay up to twice the price paid by those buying in bulk. The cost of cooking has, therefore, been based not only on the individual cooking practices of each household (the amount of energy used will vary according to individual cooking styles), but also on the specific prices paid by each household. The original mini-grid tariff was 1.00 USD/kWh, but during the project, a change in regulation required tariffs to fall in line with national grid prices, which were 0.04 USD/kWh, so both tariffs have been used in the analysis.

At the national tariff, the cost of cooking with an EPC is cheaper than using any of the traditional fuels commonly used in these communities. Even at the higher, mini-grid tariff, it was cheaper to cook some foods using electricity rather than charcoal (see Figure 1). This is a result of the high efficiency of the EPC, which means that for certain foods like beans and rice, a charcoal stove uses 40 times the amount of electrical energy used by an EPC. This energy ratio is smaller for other foods so overall, cooking with charcoal requires approximately 20 times the electrical energy used.

The electricity price that would enable a household to cook with an EPC at the same cost as they currently cook with charcoal is different for each household. This electricity parity price depends on the charcoal measure that the household purchases. This means that the parity price for poorer households that typically buy charcoal in smaller amounts will be higher. The parity price doesn’t fully reflect willingness to pay because customers may be willing to pay a premium for other benefits of electric cooking such as convenience, cleanliness etc.

The cost ratio is the cost of cooking with electricity at the mini-grid tariff divided by the cost of cooking using charcoal (C_elec/C_char). A high cost ratio suggests cooking using electricity is more expensive than charcoal. There is a weak link between the cost ratio and the adoption of EPC use (represented by the percentage of cooking events in which an EPC was used), such that adoption is weaker among households where the cost ratio is higher, i.e. (C_elec/C_char>1). A few households that used the EPC mostly to cook beans and rice showed a cost ratio less than one. This illustrates how some households had quickly assessed cooking costs and adjusted their cooking practices to make best use of the EPC.

One of the key takeaways is that the relative cost of cooking is highly context specific – not only the national context (e.g. tariffs) and the local context (e.g. availability and price of fuels), but right down to the household context, e.g. the measures in which fuel is bought, cooking styles. The main conclusions reached are:

• At the national tariff, cooking with an EPC would be cheaper than using traditional fuels;
• At the mini-grid tariff, it can still be cost effective to cook certain foods with an EPC;
• Households varied in their ability to figure out how to make best use of the EPC.

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Featured image, top: Figure 1. EPCs used in the A2EI pilot, Tanzania (from Kweka et al. (2021)).