Introducing ATEC: Pay-as-you-go electric cooking for low-income customers in Bangladesh

ATEC provides sustainable, affordable, and accessible clean cooking products for bottom of the pyramid communities. ATEC have developed an electromagnetic induction stove – the ‘eCook’ stove – that provides clean and affordable cooking. These stoves are available on a pay-as-you-go (PAYG) basis, making them affordable even for those on the lowest incomes.

Globally, four billion people lack access to clean cooking. The particulate matter (PM) 2.5 emissions and smoke inhalation resulting from dirty cooking methods cause multiple health issues, particularly for women as they’re the most exposed. In Bangladesh, 65 per cent of households still use biomass for cooking. For households, earning less than $10/day, 1.5 days per month are spent on collecting wood, while three hours per day are spent on household chores due to inefficient cooking.

The GSMA is working with ATEC to develop and launch an Android mobile application that will be integrated with an eCook stove. The mobile app will show users real-time electricity usage data, payment status, and any carbon offset data, enabling them to pay as little as $5 a month. In addition, the mobile app will also enable time-bound control of the stove, which will help to solve the current ‘shared kitchen’ issue within slum areas where multiple families dwell in one house and share a kitchen. The eCook stove will also use a mobile data SIM that is connected to an IoT server, which will automatically mint Gold Standard certified carbon credits. These credits can be sold to ATEC’s international corporate partners, and on carbon markets. The benefits arising from the sale of carbon credits will be shared with the users by subsidising the monthly instalments.

We caught up with Ben Jeffreys, CEO of ATEC International, to discuss his expectations for how their solution will evolve in the coming years.

What need does your product cater to?

ATEC’s induction stoves are a PAYG smart device that deliver a superior, affordable cooking experience that simultaneously generates digitised carbon credits for sale to global net zero partners. These portable stoves provide real time data collection through GSM connectivity on cooking use, time and kWh, GPS location, stove unit health and tampering. Our patented PAYG electric cookstoves make switching to clean cooking easy, cheap, and effective. The IoT generated data will generate carbon credits for sale on international markets which then finance further scale and cost reductions.

Through the GSMA Innovation Fund grant, ATEC is currently developing an app that will deliver real time data on Kwh usage to the customers. This will enable them to know their expenditure on cooking energy and they will have improved control over their usage and cost. This system will also develop the behavioural change in adapting electric cooking systems, which is a cleaner solution for cooking and will reduce carbon footprint massively. We will then look to leverage this app interface to push further features which enhance user experience into the future.

What are the challenges you expect to encounter in deploying the solution and with digital adoption?

While deploying the electric cookstove nationwide in Bangladesh, ATEC faces challenges in making consumers understand that the cooking device will not cost them more, rather it will reduce the costs compared to the LPG and wood usage by up to 50 per cent. This perception of customers hinders them from adapting cleaner fuel for cooking, and increases pressure on natural gas and LPG usage, and in turn, decarbonisation.

To address the perception around the cost of maintaining the electric cookstove, the ATEC app will show them their usage data. ATEC’s internal estimation shows that the electricity consumption bill is low compared to LPG usage. Customers will also be able to pay the monthly instalment through this app, with it having the payment gateway system in place. The app will show the usage data of the stoves for each customer, which will later be used as a real time value indicator to determine the carbon footprint and carbon credit revenue.

A customer who works as a domestic labourer in Dhaka using ATEC’s Induction Stove eCook

What are you expecting to learn through the GSMA project?

The GSMA Innovation Fund grant will enable ATEC to deploy the app along with the stoves to capture the impact data more accurately through usage parameters. The usage data will be the real time data validity for carbon credit revenue generation, which in turn will be used as climate finance and will also be a vast source of gauging the progress towards achieving SDG 7 by 2030. This is a key point for the cooking sector – to truly solve the cooking problem we must have 100 per cent verifiable usage. Just having the stove is not enough to confirm behaviour change and severely hampers the ability to leverage carbon markets. To date we’ve sold over 4,000 eCook stoves across multiple markets within the last 12 months, building a solid base of users and usage data to which this app can be added to.

How do you see your business model evolving?

The GSMA Innovation Fund grant will enable ATEC to deploy the app along with the stoves to capture the impact data more accurately through usage parameters. The usage data will be the real time data validity for carbon credit revenue generation, which in turn will be used as climate finance and will also be a vast source of gauging the progress towards achieving SDG 7 by 2030. This is a key point for the cooking sector – to truly solve the cooking problem we must have

ATEC is working in Bangladesh and Cambodia and is also in the process of scaling to Sub-Saharan Africa and other South Asian countries. We are focusing on the combination of a high quality, smart cooking solution seamlessly integrated with carbon markets, then working on the B2B side through existing last-mile distributors across Asian and African countries.

The project with the GSMA is providing a lot of learnings around deploying an app along with integrating the customer preferences. As the project aims for reaching out to the urban underserved population, our marketing strategy has also been developed in multiple aspects to reach out to the target customers.

ATEC is now expanding our smart ‘product+carbon’ technology across Asian and African countries in partnership with net zero companies and last-mile distributors. With rapid expansion over 2022 and into 2023, we’re aiming to have over 56,000 active customers in the next two years, and we are currently raising $6.5 million in Series A funding to support this (see our one pager here, and the deck here).

What partnerships have you formed, and what partnerships do you hope to form in the near future?

We’ve been working and partnering with bKash, an MNO-based payment gateway service, app developers and the Gold Standard for registering as a digital carbon credit generating project. The electric cook stove product is how we’re expecting to develop and scale our digital carbon credit and PAYG partnerships. The product has successfully rolled out in Cambodia and Bangladesh and currently working to reach six more countries with the help of distribution partners. At the moment, we have confirmed distribution partnerships in Zambia and Rwanda and will soon be ready to launch them. The phase 2 product development includes enabling automated data and payment flow between household product and carbon/capital markets, building on our verification with Gold Standard.

What needs to happen to make this service scale and become sustainable?

The main part of ATEC’s success is our continuous growth strategy built on small successes over time. Through using innovative technology, we are able to provide high quality but affordable products to customers, then build up an annual recurring revenue base of carbon credits that compound in growth up to 15 years and fund future scaling.

In cookstove markets, bringing modern, sustainable technology to the base of pyramid customers in an affordable way is challenging due to high costs and tight margins. The carbon credits will improve our margins and incentivise usage. The total addressable market (TAM) for modern cooking in the next 20 years is about $40 billion, with 10 per cent of this TAM in the countries in our Series A expansion.

Cookstove credits have a TAM of $16 billion per year on current pricing. Over the next 15 years this represents a five times larger market than solving cooking alone. However, the market scale is currently constrained by low trust in the verifiability of the credits to scale investment. ATEC’s eCook is the world’s first usage-data generated carbon credits, providing 100 per cent verifiable Gold Standard credits in real-time. Overcoming two of the most significant problems to taking cookstove credits to scale, we are already over-subscribed in credit demand from our net zero partners.

Utilising technology to solve the current problems in both markets is ATEC’s unique market approach. Being able to bring together low-income households with global carbon markets through a seamless full-stack technology solution is not just ATEC’s defensible position, but the compounding effect that sits behind ATEC’s Impact Flywheel in generating social, economic and environmental impact at scale.

THIS INITIATIVE IS CURRENTLY FUNDED BY THE UK FOREIGN, COMMONWEALTH & DEVELOPMENT OFFICE (FCDO), AND SUPPORTED BY THE GSMA AND ITS MEMBERS.