Investment in renewable energy systems creates 30 times more jobs and saves 4 billion tons of greenhouse gas emissions compared to fossil fuel alternatives. This is according to a new study by The Rockefeller Foundation.
The study found that investing in distributed renewable energy systems could end energy poverty and create 25 million direct jobs in the power sector in Africa and Asia by 2030, while saving 4 billion tons of greenhouse gas emissions.
By comparison, investing in fossil fuels over the same period creates less than half a million direct jobs, the great majority of which would be temporary. The report, Transforming A Billion Lives: The job creation potential from a green power transition in the energy poor world, calculates that this could be achieved with an annual investment of $130 billion in distributed renewable energy systems.
In addition to these direct jobs in the power sector, this new clean power would also create nearly 500 million new jobs in agriculture, health care, education, and small and medium-sized enterprises and set in motion a green transition across energy-poor countries over the next decade.
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Link between just energy transition and energy poverty
President of The Rockefeller Foundation, Dr Rajiv J. Shah stated: “The world is at a crossroads. Fortunately, technological advances have given humanity the tools for transformative change, so for the first time in history, we can address the climate crisis while empowering people with the jobs and electricity they need to care for their families, pursue opportunities, and thrive. We must now find the courage, and the resources, to come together and change how the world works and how people live. Nothing less will do.”
Currently, there are 3.6 billion energy-poor people – nearly half the world’s population – who either don’t have access to electricity, or have access to unreliable power, or are underserved, and the vast majority live in Africa in Asia. At the same time, significant breakthroughs in technology over the last decade have made renewables the cheapest option for new power in more than two-thirds of the world.
The report explores a “what if” scenario – looking at what it would take to significantly scale up access to distributed renewable energy (DRE) systems to end energy poverty and set in motion a green power transition across the energy-poor world. This new research, which was conducted by Catalyst Off-Grid Advisors and reviewed by IKEA Foundation, International Renewable Energy Agency(IRENA), International Solar Alliance, and Sustainable Energy for All (SEforAll), underlines how the economic and investment case has flipped in favour of renewable technologies.
Transformative impact of investment in renewable energy
The report combines qualitative case studies with predictive economic modelling to map the job creation potential that would flow from a rapid increase in investment in DRE across all 63 energy-poor countries in Asia and Africa.
This includes scaling up renewable energy minigrid systems to power solar lanterns, ice-making factories used by fishing communities, milk chillers and irrigation pumps for farmers, refrigerators and life-saving medical equipment in clinics and hospitals, and more.
Based on a detailed assessment of 75 “productive uses” (or electricity that is aimed at enhancing income generation opportunities and productivity in key sectors of the economy), the report examines eight economic sectors: agriculture production, animal production and preservation, food and agriculture processing, essential goods and services provision, mobility, heavy industry, large and medium enterprise, and small and micro-enterprises.
Key findings include:
Ending energy poverty in energy-poor countries in Asia and Africa through scaling access to DRE could create 25 million direct jobs, 61% of which would be related to modest grid-tied systems that could service a medium-sized business or a cluster of small enterprises engaged in activities like milling, carpentry, or tailoring.
This is 30 times the number of jobs that would be created by a comparable investment in large, centralised fossil fuel assets, with the great majority of these jobs being temporary and focused on the construction of power plants.
491 million additional new jobs could be created in an array of downstream applications, and 671 million existing jobs could be improved by the availability of clean, reliable power.
Almost half of these jobs are located in South Asia, the majority in India; a quarter in the sub-Saharan Africa region; and a quarter in the East Asia & Pacific region.
4 billion tons of CO2 emissions could be saved – equivalent to the electricity use of 726 million homes for one year, compared to a fossil fuel-dependent development pathway.
Distributed renewable energy is a more cost-effective electrification pathway for emerging markets, compared to a fossil-fuel-led path, when capital expenditures (funds used by a company to acquire or upgrade physical assets such as property, buildings, or equipment) and fuel costs are considered.
Per Heggenes, CEO of IKEA Foundation, said: “Over the past decade, distributed and renewable energy technologies have been rapidly replacing fossil fuels as the most cost-effective building blocks for powering economic development.”
“DREs, in particular, have become a faster, nimbler, and more cost-effective solution for driving inclusive growth and reaching under-served populations. As the report highlights, they also have the potential to be at the heart of a global energy transition, which is urgently required.”
Earlier this year, The Rockefeller Foundation and IKEA Foundation announced a partnership to lay the groundwork for a global energy alliance to combat the climate crisis and energy poverty. Committing $500 million each, this billion-dollar collaboration marks the largest philanthropic initiative to scale renewable energy for an equitable energy transition and global economic development.
CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy, Damilola Ogunbiyi said: “Access to energy transforms every facet of life, with reliable electricity often the first step toward helping a community lift itself out of poverty. Decentralised Renewable Energy solutions are a particularly powerful engine for economic development creating jobs and opportunities to empower women and girls.”