Sustainable energy for whom? Build capacity, don’t just fund hardware

Dr David Ockwell and Dr Rob Byrne, STEPS Centre, University of Sussex

Studying by solar light_EEP_Flickr Creative Commons
Studying by solar light/EEP/Flickr Creative Commons

There’s a lot of talk about low carbon energy technologies providing clean energy access for poor people in low-income countries. In fact, these technologies could also do a lot to drive new economic opportunities and create sustainable capacity in new, lower carbon technological fields. But this is unlikely to be achieved unless current policy is fundamentally reframed. Our research shows that capacity building solutions are outperforming policies based on market mechanisms. To make use of this knowledge and shift climate change policies onto a path with real impact, we need to rethink the way that we promote sustainable energy investments.

At present, climate change policy tends to view the problem as one of “hardware financing”. It’s a simple rationale. New, lower carbon technologies cost more than conventional fossil fuel technologies. The idea is to generate incentives for investment in low carbon technologies by creating markets for carbon that internalize the positive externalities (climate mitigation – and the market does the rest of the work for us. Ergo policies like the Clean Development Mechanism (CDM).

But investment under the CDM has totally bypassed low-income countries. The majority has gone to China (60%), India (11%) and Brazil (6%). Africa as a whole only received 3% – only a small part of which went to sub-Saharan Africa. Looking at the kinds of technologies that have been funded under the CDM, it becomes even clearer that it is failing to deliver the low carbon technologies that can transform livelihoods and economies. About two-thirds of the investment has gone to five technologies, only one of which, wind, could be considered vaguely “new” – and none of which are useful in providing sustainable energy access to the rural poor. Even when we look at more targeted, nationally focused hardware financing policies, we see similar failures. The Photovoltaic Market Transformation Initiative (PVMTI) in Kenya, for example, made USD 5 million finance available in an attempt to overcome high upfront costs of off-grid PV. But by the end of the 13 year programme, PVMTI had only managed to help finance 170 solar home systems (SHSs) – hardly transformative in a country that by 2013 was estimated to have 300,000 SHSs installed.

So what’s going wrong? How can we reframe the problem to move from “sustainable energy for some” towards “sustainable energy for all”, whilst promoting economic development in some of the world’s poorest nations?

Recent research by the STEPS Centre at the University of Sussex and the African Technology Policy Studies Network, ATPS (funded by CDKN) provides some answers. By constructing an in-depth history of the Kenyan market for off-grid solar (which, despite the failure of programmes like PVMTI, is the second largest globally and the largest per capita) the research identified the key factors that drove the expansion of this market, providing several insights for future policy and research in this field.

The analysis firmly rebuts the popular idea that the Kenyan solar market is a free market success story. Instead it shows that the market for off-grid PV in Kenya is the result of a long history of capacity building activities by a range of actors, often donor funded. At critical points throughout the development of the market – dating back to the late 1970s – a handful of actors and organizations engaged in a range of activities. For example: they established accredited training courses for solar technicians, conducted market research, and built a pan-Kenyan network of actors involved in solar (from policy makers to vendors to users). By focussing problem-solving on issues of relevance to all solar market actors, any lessons generated were widely and readily applicable. Moreover, because of the donor funding, many lessons were made public – through reporting and through discussion in various forums (such as workshops and other meetings, and probably by word-of-mouth through the well-integrated actor-networks in the Kenyan PV niche). These activities were separate and in addition to conventional rent seeking activities and were integral to providing the basis for long-term, sustained development of the market for off-grid solar in Kenya. Private sector actors were able to use this knowledge in activities of their own that helped to grow the market.

These lessons echo the findings of research by the University of Sussex in other countries, including China and India. They add further force to calls for policy to move away from a focus on financing hardware and to look instead to capacity building activities. Particularly in low-income countries where technological capabilities tend to be weak, these activities are critical to establishing the bedrock upon which sustained future uptake of low carbon technologies must be built. Initiatives such as the emerging Climate Innovation Centres (CICs – pioneered by infoDev, DfID and DANIDA – and the Climate Technology Centre and Network under the UNFCCC) provide the kind of institutional architecture that could deliver this. But, in light of the capacity building emphasised by research like this, their activities require careful consideration in order to avoid becoming talking shops for elite actors.

Despite Ban Ki-moon ’s laudable SE4All intentions, until such time as policy discourse undergoes a fundamental reframing, the question remains – sustainable energy for whom?

For more information visit the project web page at http://steps-centre.org/project/low_carbon_development/

STEPS_logo_RGBWe are seeking funding for a programme of research which builds on the current study to apply the conceptual approach developed here across a range of different countries, low carbon technologies and energy services. Please contact d.g.ockwell@sussex.ac.uk for further information.

Dr David Ockwell is a Senior Lecturer in the Department of Geography  at the University of Sussex and Deputy Director of Research at the ESRC funded STEPS Centre. He’s also affiliated to the Sussex Energy Group and the Tyndall Centre for Climate Change Research. David’s research focuses on low carbon development with particular emphasis on the implications of international policy in terms of poverty and social justice.

Dr Rob Byrne is a Research Fellow in SPRU (Science and Technology Policy Research) at the University of Sussex. He co-convenes the STEPS Centre’s energy and climate domain with David and is also affiliated to the  Sussex Energy Group and the Tyndall Centre for Climate Change Research.  Rob’s research focuses on low carbon development with a particular empirical focus on off-grid solar electrical services in East Africa where he has worked both as a practitioner installing solar home systems as well as conducting academic research on this issue.

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