On 5 December at COP28, a new Oxford Smith School report says that challenges faced by renewable energy developers in the Global South are holding back a once-in-a-generation opportunity for inclusive and sustainable development in the region.
In response, the report – the first in a three-part, multi-year study – sets out ten specific policy measures that could unblock progress. The report (available on request) will be launched in the SDG 7 Pavilion and you are invited to attend in-person or online.
The report’s authors surveyed 46 project developers working in the Global South. Their results demonstrate how developers’ attention has shifted from technology choices and project costs, to getting to grips with the complex new business environments they are operating in – and the associated risks these present. These risks can include public backlash against projects, planning difficulties caused by opaque planning processes, and tricky institutional and regulatory arrangements for accessing electricity grids.
“The ability of project developers to identify, structure, build and operate projects is key to unlocking finance and scaling up investment in the Global South, but until now, specific blockages in the development process have gone largely unrecognised,” affirms report co-author Tonny Kukeera.
The report also explores clean energy development opportunities in 64 countries across the Global South, highlighting the complexity and trade-offs between the different markets. For example, Vietnam has a supportive business environment and high growth in renewables, but high costs. Meanwhile, countries in Africa present the best opportunities for social impact, but have challenging business environments. “This speaks to the critical importance of development aid and concessional finance for a just energy transition,” says Kukeera.
Rolling out renewables in the Global South: A developer perspective was grant funded by SSE, a UK-headquartered business focused on developing, building, operating and investing in the electricity infrastructure needed in the transition to net zero. It was also supported by Sustainable Energy for All, an international organisation that promotes faster action towards the achievement of Sustainable Development Goal 7: affordable and clean energy, and the Climate Compatible Growth programme.
Sam Fankhauser, lead author and Professor of Climate Economics and Policy at the Oxford Smith School, comments: “The renewable energy transition is not just an environmental imperative. It is also a unique opportunity to advance inclusive and sustainable development. But it will not be successful, just or equitable unless it reaches all parts of the world. Our aim for this report, and forthcoming reports from this series, is to help light the path on this critical journey.”
Alistair Phillips-Davies, Chief Executive of SSE, commented: “Getting to net zero is a global challenge that needs global solutions. Making it easier to invest in and build clean energy infrastructure will be important for every country but the developing world faces particular challenges, as outlined in this important new report. The sooner we understand and overcome these obstacles, the sooner we can accelerate progress towards our shared goals and we hope that through this study we can make a small but meaningful contribution towards that aim.”
SSE’s purpose is to provide the energy needed today while building a better world of energy for tomorrow. We do this by developing, building, operating and investing in world-class electricity infrastructure that is vital to the clean energy transition. This includes onshore and offshore wind farms, hydro, electricity transmission and distribution networks, flexible generation, carbon capture and hydrogen storage, solar and batteries, as well as providing energy products and services for businesses and other customers.
A FTSE-100 company headquartered in the UK, SSE has a growing presence in selected international markets in Europe, Asia and North America. We employ c.12,000 talented and skilled people and are a proud ‘real Living Wage’ and ‘Living Hours’ employer and accreditee of the ‘Fair Tax Mark’. SSE was also the first company in the world to develop a ‘Just Transition Strategy’ aimed at ensuring the benefits of the clean energy transition are shared by workers and communities. Find out more at sse.com.
About Sustainable Energy for All
Sustainable Energy for All (SEforALL) is an international organization that works in partnership with the United Nations and leaders in government, the private sector, financial institutions, civil society and philanthropies to drive faster action towards the achievement of Sustainable Development Goal 7 (SDG7) – access to affordable, reliable, sustainable and modern energy for all by 2030 – in line with the Paris Agreement on climate. We work to ensure a clean energy transition that leaves no one behind and brings new opportunities for everyone to fulfil their potential.
Find out more at www.seforall.org