COSTS AND BENEFITS OF CLEAN ENERGY TECHNOLOGIES IN TANZANIA'S MILK VALUE CHAIN

In Tanzania, where grid electricity does not reach many rural areas, off-grid renewable energy (RE) solutions to cool milk can be a viable option. Biogas domestic milk chillers and solar milk coolers have been identified as attractive solutions from a financial perspective and have socio-economic and environmental net co-benefits. Approximately 37 percent of the 1.68 million households in Tanzania own cattle, and approximately 60 percent of rural households derive 22 percent of their income from livestock. The milk sector is based on traditional farming systems consisting of extensive grazing on mostly communal land by nomadic pastoralists and the more sedentary sometimes transhumant, agro-pastoralists. Improved dairy cattle farms are more intensively managed in mixed farming systems. However, only about 20 percent of small-scale dairy farmers have access to extension services, which could help improve productivity of the cows. Raw milk is usually transported to milk collection facilities without any form of cooling, with high probability of being rejected at milk collection centers (MCCs). Most rural households do not refrigerate milk on farm, as just 11 percent of them have access to electricity. This particularly compromises the quality of evening milk. Out of 183 official MCCs, only 30 percent have cooling facilities. Cooling technologies can improve milk quality and add value. However, farmers have few incentives to improve milk quality and hygiene as there is no price premium. Moreover, the relevance of the informal milk sector has a significant negative influence on the development of a market for cooling technologies. Biogas domestic milk chillers are suitable solutions for off-grid households with few zero-grazing cows. The technology can cool two milk cans of up to 5 liters each and power a biogas cookstove for one household. Benefits arise from additional milk revenue, slurry, and digestate that can be applied on farm and the biogas cookstove, which allow savings on traditional fuelwood and charcoal and reduces indoor air pollution. At country level, the technical potential for this technology was estimated to be 153,000 systems. Solar milk coolers can be installed at existing MCCs without cooling facilities and owned and managed by dairy cooperative societies or processors. The financial attractiveness of a solar milk cooler depends on who makes the investment, as processors are able to keep a large part of the value added along the chain.