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This is the dilemma we're working through with villagers from Nimei Township, an ethnically mixed Han and Yi group of communities 2000 metres up in the mountains above the Dadu River in Sichuan, China. The villages are remote from markets and grid electricty supply, average per capita annual income is about 300 Chinese yuan (about US$38). The capital investment for micro hydro power is prohibitive, and connecting to the grid even more expensive. People rely on biomass for cooking and heating - burning fuelwood at an average of about two tonnes per household per year. The area is badly deforested, largely as a result of policies pursued during the collective era following the Communist Party coming to power in 1949, especially the Great Leap Forward in the late 1950s, when people were encouraged to smelt iron in backyard furnaces.Lighting comes from kerosene lamps, families spending up to 100 yuan annually of fuel, which as you can see from per capita incomes above, represents a big outlay for the typical household of four people.
Another option is biogas - shit digesters that produce methane, but the investment is high and the cold of altitude slows the process of conversion, though livestock rearing here means raw materials are plentiful, plus the digested slurry is healthier than putting human shit straight on the fields as is the practice herabouts.
Solar power again has a high capital cost, and is not so effective as clouds gather around these high mountain peaks reducing insolation.
As well as the above energy requirements, people need motive power to provide basic processing for their crops - milling the grain and maize. There are some impressive water mills of local construction, but because these must of course be sited by a fast flowing river, some families have to carry loads of tens of kilos for hours along steep mountain tracks to gain access to this necessary service.
Sitting aound the fire chatting and singing (and in my case refusing the proferred drink) with cheerful Yi farmers it's easy to forget what effort went in to providing all the warmth and light of these hardy people's homes.

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