Should developing countries prioritize renewable energy?

On 02/06/2023 0

The benefits for developing countries to prioritize Renewable energy sources are cleaner, more sustainable energy mix and a favourable impact on jobs creation and economic growth. A cleaner energy mix, as renewable energy sources produce fewer emissions than thermal energy sources, which helps to reduce air pollution and greenhouse gas emissions; improved sustainability as renewable energy sources are not limited by fossil fuel reserves, which means that they are not in danger to run out. In addition, the development and deployment of renewable energy technologies creates jobs in the manufacturing, installation, and operation of renewable energy systems. Finally, the development of renewable energy can boost economic growth by creating jobs, attracting investment, and reducing energy costs.

For these reasons many developing countries have developed ambitious targets:

  • India has set a target of generating 500 gigawatts of renewable energy by 2030.
  •  Brazil has set a target of generating 80% of its electricity from renewable energy sources by 2030.
  • Kenya has set a target of generating 100% of its electricity from renewable energy sources by 2025.

In terms of programs, successful examples include:

  • The Gujarat Solar Challenge in India: This program has helped to install over 2 million solar rooftop systems in Gujarat, India, providing financial incentives to homeowners and businesses to install solar panels.
  • The Moroccan Solar Plan: This program aimed to install 2,000 megawatts of solar power by 2020 and succeeded in attracting large investment from both domestic and international sources.
  • The Kenyan Off-Grid Solar Market: This market has grown rapidly in recent years, with over 1 million solar home systems installed, providing affordable and reliable solar power to rural households.
  • The Brazilian Proinfa program: This program has helped to finance over 10,000 megawatts of renewable energy projects in Brazil, providing long-term loans at favorable interest rates.

This clearly shows that transition to renewable energy is not exclusively a developed countries endeavour. However, even if the political will is there, some developing countries experience difficulties in prioritizing renewable energy that may be due to :  

  • High upfront costs (depending of the capital investment targets), in a context of a capital scarcity
  • Lack of infrastructure: Developing countries often lack the infrastructure, such as transmission lines and distribution networks, to support renewable energy projects.
  • Unstable political and regulatory environments: Developing countries often have unstable political and regulatory environments, which can make it difficult to develop and deploy renewable energy projects. Lack of clear and consistent regulations governing the development and deployment of renewable energy projects can make it difficult for investors to assess the risks and costs of renewable energy projects, and can discourage investment in this sector.
  • Lack of access to finance, as banks and other financial institutions tend to limit the lending of capital to renewable energy projects, due to the perceived risks involved.
  • Lack of skilled workers needed to install and maintain renewable energy projects. Renewable energy technologies are often new and complex, and developing countries may not have the educational institutions or training programs needed to produce the skilled workers required to install and maintain these technologies.
  • Public opposition, particularly in rural areas where people may be concerned about the impact of these projects on their livelihoods or on the environment.

To overcome these challenges, Governments should work in the following directions:

  • Developing clear and consistent regulations, providing  investors with certainty and predictability, and encouraging investment in this sector.
  • Stabilizing the political and regulatory environment. This will make it easier for investors to assess the risks and costs of renewable energy projects, and will also encourage investment in this sector.
  • Providing access to finance: Governments can work with banks and other financial institutions to develop more favorable lending terms for renewable energy projects and ease regulatory restrictions.
  • Reducing the upfront costs of renewable energy projects, by providing subsidies, tax breaks, and other incentives for renewable energy projects.
  • Building the capacity of skilled workers: Governments can invest in education and training programs to help produce the skilled workers needed to install and maintain renewable energy projects.

The development of renewable energy is not necessarily exclusive of investment in fossile fuel projects, especially gas, as developing countries may feel the need to take advantage of the natural resources that are available to them and that developed countries for their part have exploited for decades. However the benefits of the exploitation of fossile fuel ressources should be invested in a sustainable development model aligned with the efforts of the international community and that will offer a better life to the future generations. 



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