The Human Capital Investment: SDG7 and the Renewable Energy Generation

Smart Power for Rural Development - The Rockefeller Foundation

Smart Power for Rural Development - The Rockefeller Foundation

Solving energy poverty is not a technology issue. With affordable new services, performance improvements, and the ability to pay-as-you-go on mobile money platforms, decentralized renewable energy (DRE) can enable the delivery of basic Tier 1 and Tier 2 energy access (e.g., light and mobile phone charging) to everyone by 2030). While many countries are fighting a losing battle using business-as-usual approaches to reach electrification goals, the DRE sector—ranging from micro-hydro to mini-grids and mobile solar farms—is providing energy to more customers than many of the largest global utilities today. Not only is DRE a viable energy option, but evidence suggests that DRE can deliver a basic level of universal energy access in a fraction of the time and cost of conventional approaches

However, the challenges that limit the DRE sector’s ability to accelerate adoption of environmentally-friendly technology to achieve energy access—last mile-delivery, adoption at scale, leveling the playing field, financing—requires creativity, ingenuity and tenacity across the ecosystem to solve. In short, it takes human capital—the collective skills, knowledge, and intangible human assets—that will make or break SDG7—the sustainable development goal to ensure access to affordable, reliable, sustainable and modern energy for all. Despite the importance of human capacity supporting the spread of DRE technology, there has yet to be a coordinated global effort to develop a DRE-specific human capital pipeline to meet the needs of this rapidly growing sector.

Mostly commonly referred to as capacity-building, workforce development for decentralized renewables is not just about the DRE value chain, but also relates to capacity within a broader ecosystem: banks (commercial and development), utilities, technical assistance, advocates, financial professionals, engineers of all kinds, lawyers and entrepreneurs. The impact potential is enormous: Today, there are an estimated 170,000 jobs in the solar-powered lighting sector alone. And in the future the entire DRE value chain--including sales, installation, service, appliances, O&M—is projected to create 4.5 million jobs globally by 2030 (IRENA).

According to the Miller Center for Social Entrepreneurship’s Universal Energy Access: An Enterprise System Approach (2015) these millions of jobs are likely to spread across thousands of small and medium-sized businesses—up to 20,000. The more DRE companies there are, the more likely the nearly bottomless market of 2 billion people without reliable access to energy will have their needs met. Bloomberg New Energy Finance is bullish on the prospects for the sector: they predict off-grid solar technologies will firmly establish themselves in the mainstream over the next five years, generating sales of around $3.1 billion by 2020.

All of this potential for DRE to be a jobs creation engine and transform the lives of billions will go unrealized unless the global community prioritizes the human capital needs for a creative, empowered, educated entrepreneurs and workers. The energy sector globally is experiencing challenges getting good personnel. Industry hiring managers often report  that lack of candidate training, experience, or technical skills are major problems. The 2017 Deloitte Human Capital Trends Report identified the key people-related issues that keep energy executives up at night: organizational structure, careers and learning, performance management, talent acquisition, and leadership. More, many of the jobs in clean technology and renewable energy needed to address the access problem are not in the 50 countries that suffer the most from energy poverty. Notably, Africa has a paltry 62,000, or 0.6%, of those jobs, and just 15,000 of them are in sub-Saharan Africa (not including South Africa).

We need to focus the global community today on developing the knowledge and interest in the sector to create a workforce that can build tens of thousands of companies (to get 20,000 to succeed many more will try and fail) that will deliver over 4 million jobs in next 13 years. While there are some excellent examples of DRE training and mentoring—Schneider Electric’s Access to Energy training programs or Free Electrons’ utility-backed cleantech accelerator that connects startups with utility companies to co-create the future of energy—we need a wholesale effort to collaboratively develop the human capacity pipeline needed to accelerate universal access to energy. Partnerships with universities and utilities, vocational schools, student organizations, and Workforce Development Boards are all tools that have been used for successful transitions for similar sub-sectors of the energy field, including energy efficiency and utility-scale solar.

Globally, future generations must be prevented from simply defaulting to fossil fuels for energy. If kerosene, diesel, and coal continue to be prioritized energy sources, climate change impacts will be exacerbated and universal energy access will not be achieved. As the global community rallies around SDG7, we must also develop a specific focus on training, workforce and ecosystem development and exciting the next generation about distributed renewable energy—or we will fail to achieve one of the most important and ambitious goals of this century.

 

 

Video: 1 million technicians by 2025

Schneider Electric has pledged to train 1 million people as renewable energy technicians by 2025. This video explains their Access to Energy effort and their success so far in training more than 100,000. In October last year, Schneider signed an MoU with India to establish a center to train trainers and to setup not less than 100 vocational centers to train, in particular, unemployed youth in the field of energy management and solar energy. In April 2017, they also set up a training center in Ivory Coast. For more perspective, also check out our previous interview with Schneider's Thomas Andre on the need for capacity building.

Also, below is a great snapshot that highlights some of the successes of the Schneider Electric program, including work in Brazil, Nigeria, Vietnam, Togo, Cameroon and Egypt:

 

Infographic: Creating DRE Companies & Jobs in India

Renewable energy currently employs 9.8 million people globally. While we still need better data on the jobs potential of DRE, there are encouraging signs that the future is bright for employing the next generation in sub-Saharan Africa, South Asia and beyond. Below is an infographic for India, the world's largest DRE market, and still home to 269.8 million unelectrified rural Indians. 

Download and share the infographic 'Decentralized Renewable Energy, India: Creating DRE Companies & Jobs PNG (188KB)

 

In conversation with... Jane Ebinger, SEforALL

Sustainable Energy for All (SEforALL) is developing an action-plan for a public-private initiative focused on gender equality and women's empowerment and it wants your input. This according to Jane Ebinger, SEforALL's director of policy, who had a wide-ranging conversation with Power for All, during which she also highlighted the critical need for supporting human capacity more broadly in order to achieve SDG7, the leadership of India and a need for greater country-level and regional coordination.

"There's a great need to build capacity for markets to expand," Ebinger said, citing both technical skills as well as the "need to build capacity and awareness with local financial institutions, so that they are able to both understand and invest in small-scale project opportunities at the local level." CSOs, she added, can also play a critical role in helping to socialize best practices at the local level.

In particular, the role of women in energy access growth will be a top priority for SEforALL, which will host a workshop this month to develop a plan that will accelerate gender equality, inclusion and women's empowerment. The initiative aims to offer women full participation in developing energy access solutions as well as to find ways to unlock finance (both public and private) to support solutions for social inclusion. The goal is to formally launch the action plan at COP23 in Bonn, Germany in November.

"By being an agent within the energy service and delivery and energy businesses, it allows women's position in society and the household to change and gives them a voice in decision making," Ebinger said. 

Calling on countries to "put access considerations at the heart of their energy policy", she said SEforALL was stepping up its work to coordinate with development banks and national governments through its regional and knowledge hubs, with the goal of growing markets and closing access gaps. "This interaction keeps access at heart of national discussion," she said.

Ebinger also pointed out a less publicly known part of SEforALL's work -- that it takes requests from governments to be a "collaborative agent", helping to highlight what's working with access, including new business and financial models. One key for achieving energy access, Ebinger said, was integrated energy planning, yet only 44% of low energy access countries currently apply it. 

India could play an important role in this dynamic, Ebinger said, noting that the country has made huge advances in connecting its population to power, while also having "many of the elements that you'd expect to see" related to market development. 

Ebinger said the access community should tap India's experience and help transfer it to sub-Saharan Africa. "India could play a critical role in proving the viability of mini-grids in the ability to deliver access," she said. (For more on that topic, see this recent CNBC Africa interview).

Listen to the entire interview below:

 

FACT SHEET: WONDER WOMEN

Energy poverty is not gender-neutral: women bear the heaviest burden. Distributed renewable energy can not only empower women economically and socially as end users, but the sector itself can hugely benefit by integrating women across the value chain as designers, educators, trainers, managers, and entrepreneurs. Learn more below.

 

SELCO: Scaling rural electrification via bank capacity building

The biggest frustration voiced by enterprises looking to deliver last-mile electricity connections to the rural poor is lack of finance. To solve this major roadblock to scale, SELCO Foundation has developed an innovative program that has nothing to do with money. It focuses instead on people and process. Sound boring? Not at all, and it may be a key to fully unlocking the distributed energy transition sweeping the world.

SELCO Foundation and SBI training of the trainers program in Patna, Bihar (credit: SELCO Foundation, March 2017)

SELCO Foundation and SBI training of the trainers program in Patna, Bihar (credit: SELCO Foundation, March 2017)

Since 2011, SELCO Foundation built on previous efforts of the energy enterprise SELCO India to sensitize bankers to distributed renewable energy (DRE), focusing on building capacity within the Indian banking sector, especially at the village level, in order to create more end-user and enterprise lending. SELCO India had conducted over 1,000 banker training programs since the late 1990s in order to stimulate access to credit for the poor to purchase household clean energy systems. These efforts led to partnerships with over 30 financial institutions, of which many were first-time lenders for clean energy systems.

 However, with 44,000 bank branches in India, each with 10 employees, it was clear that this initiative had to be able to scale and be replicable. Thus SELCO Foundation, which was set up in 2010 to develop the conditions needed to scale energy access for the poor, tweaked the existing program to build institutional knowledge by tapping into existing capacity-building programs within banks, and train the trainers already employed by the banks themselves

SELCO Foundation, in partnership with Shakti Foundation and Bharitya Vikas Trust (BVT), is already engaging in seven regions — Bihar, Assam (North East India), Odisha, Karnataka, Maharashtra, Uttar Pradesh and Delhi. It has conducted 6 trainings so far, with 25 bankers in each class. SELCO is already getting positive feedback from banks, according to SELCO Foundation Program Manager Swathi Murali. “Bankers are calling us to find out next steps on how to take it forward,” she told Power for All. Ultimately, SELCO Foundation wants to activate the trainings in market by developing financial programs with the banks that turn knowledge into practice. Based on these trainings, banks in Odisha, Karnataka, Bihar and Northeast India are already initiating or strengthening their clean energy financing portfolios.

Banks like State Bank of India (SBI) have introduced a clean energy financing component into their internal training programs. Moreover, since the beginning of this year, Syndicate Bank, Odisha Gramya Bank, Narmada Jabua Gramin Bank and Bihar Gramin Bank have undertaken innovative financing activities in Madhya Pradesh, Odisha and Bihar for solar home solutions and livelihoods, while banks in the north-eastern states and Odisha are in the process of developing circulars and schemes in an effort to establish renewable energy as an important portfolio for bank financing in rural areas.

“The end goal is not to do training programs, but to use training to convert into loans. Training is just the first step to get there,” Murali said. “Our goal is to make the process institutionalized.”

Training only has the desired impact, however, if a comprehensive support network for the banks is available on the ground. In order to ensure that happens, SELCO Foundation is also working to build partnerships with local entrepreneurs, NGOs and policy makers to develop an ecosystem on the demand and supply side that can not only issue, but absorb loans. This means helping banks build technical knowledge, outreach capacity to borrowers, and financial literacy amongst consumers and entrepreneurs, as well as guidance on how to do proper due diligence on technology.

Moreover, this ecosystem is able to advise banks on creating saving schemes for villagers, and convert those savings into comprehensive, integrated loans that not only include electrification and lighting, but also livelihood, housing and agricultural production. This allows banks to do group lending, and reduce the transaction cost of supporting rural electrification.

In order to scale the deployment of access to electricity for the poor in a manner that is sustainable it is critical to focus on developing an enabling environment that can enhance affordability, allowing the end user to have more choices of what suits their need without being restricted by a price point that in turn limits their choices. Local financial institutions by virtue of their proximity to customers are a critical channel that can link financial inclusion via energy access. Besides Shakti Foundation, this work is also supported by SELCO Foundation  partners GIZ India and USAID India.

Campaign Update: June 2017

Find out about recent activities and the up-coming events where Power for All will be profiling decentralized renewables—and get involved!

June Highlights: Access Dividend, India and more

Power for All, in partnership with SEforALL, has launched the development of the Energy Access Dividend. This framework will enable decision-makers to assess the affordability, cost-effectiveness and impact of energy access solutions, incorporating the value of time, and answering the question: What social and economic benefits are gained from early access to energy, when communities and households don’t have to wait 7-9 years for the grid to come? The Overseas Development Institute (ODI) is leading the data gathering  and developing an approach to the underlying methodology and framework design, with inputs from a broad range of stakeholders, including DFID, the World Bank, Acumen, GOGLA and Power for All’s PEAK research team. Stay tuned, as the Energy Access Dividend project begins to bring clarity to the value of distributed renewable energy solutions in delivering the SDGs.  

In India, Power for All has kicked off work to help align DRE sector messaging and narrative, curate supporting evidence, and tell the amazing stories of the companies, individuals, CSOs and others advancing the DRE sector in a country with 269.8 million unelectrified.  Working closely with the CLEAN Network and other key actors, we have established a communications secretariat, developed a sector messaging guide, and started to implement a communications strategy. As part of a desire to “own the narrative”, we created a Medium.com channel - “Powering Rural India: a Chronicle of India’s Quest to Electricity 269.8 Million Rural Poor”.  Readership is strong and growing, so please follow the channel to receive updates. At the same time, we started global media outreach, with some highlights including a Reuters story on Simpa Network’s new Magic TV service, and an interview on CNBC Africa regarding increased collaboration between India and Africa in DRE. We also worked with several sector leaders to respond to a recent negative report in The Economist, and will be continuing to engage media on both a proactive and reactive basis.

Our Sierra Leone and Nigeria campaign leaders have also been representing market activation work globally. Ami Dumbuya attended the Women Entrepreneurs and Sustainable Energy in Africa workshop held in Gabon, held on the back of the  African Ministerial Conference on Environment (AMCEN), where over 75 women entrepreneurs in sustainable energy across the continent participated.  She presented during the Access to Finance working group session, developing recommendations to address the prevailing challenges on the issue of finance for women. Meanwhile, Ify Malo attended the AE4H Innovation Lab: Accelerating Energy Access Solutions Forum held at the institute for Advanced Sustainability Studies in Potsdam, Germany where over 50 leading thinkers from research institutions, the private and public sector, and NGO and finance organizations across the continent participated. The forum was focused on developing practical ideas to empower participants to drive solutions in the energy access challenge space.   

Inside Nigeria, congratulations are in order to the Power for All campaign team, which has been named recipient of the 2nd edition of the Nigerian Green Economy Award, in recognition of the benefits the campaign brings to the DRE space in Nigeria. This award is given annually by the Sustainable Energy Practitioners of Nigeria (SEPAN) in collaboration with Global Legislators Organization for a Balanced Environment (GLOBE) to honor deserving Nigerians and businesses who are contributing substantively towards entrenching development advocacy initiatives and sustainable clean energy in Nigeria.  

Launch of the Ajima Farms Waste-to-Watts project

Launch of the Ajima Farms Waste-to-Watts project

Power for All, in collaboration with USAID Power Africa and other stakeholders in the renewable energy sector, paid a courtesy visit to the newly appointed management of the Rural Electrification Agency (REA). The visit was to set a pace for partnership dialogue with REA to streamline donor and development partner investment and support towards operationalizing the rural electrification master plan and Rural Electrification Fund. Power For All is will be supporting and working closely with REA to integrate DRE into its work and facilitating action-oriented collaborations between the REA and other stakeholders.  The Nigeria team also attended the launch of the Ajima Farms Waste-to-Watts project, an off-grid electricity project in rural community Rije, in Kuje Area Council of Abuja supported by the United States African Development Foundation (USADF). The project provides clean water and biogas cooking fuel produced from locally sourced agricultural waste. Ajima Farms is one of Power For All’s many industry partners in Nigeria.  

July: Campaign Events Calendar

Paris, 12 July: Identifying Technology Innovation Needs and Opportunities: Off-Grid Access to Electricity

Deputy director for advocacy Aaron Leopold will attend this stakeholder workshop hosted by IEA with Mission Innovation, which will focus on identifying R&D gaps and opportunities regarding off-grid access to electricity and serve to highlight successful existing projects, allow participants to share best practices. It will also see to  build further consensus on priority actions, discuss targets and possible metrics to measure progress against implementation and identify stakeholders for the implementation of innovative solutions and products.