The private sector has been a main target from the beginning due to its relevance on the project development level, but also due to its capacity to bring-in the required additional financial resources to achieve the 2030 universal access, renewable and energy efficiency targets.
The off-grid renewable energy sector, including the PV industry, will be crucial to reach more than half of the 1.5 billion people who will need to be electrified by 2030. If many documents have been published highlighting the strengths and opportunities offered by the initiative, little has been written about its threats and weaknesses. Although the initiative has provided the private sector with some guidance regarding how it could participate in its implementation, there are no clear guidelines on how the private sector could get involved in the entire process.
Therefore, in addition to giving an overview of SE4ALL, the following article will provide the reader with a full analysis of the initiative and give tips on the different possibilities for the private sector to take part in the formulation and implementation processes.
SE4ALL at a Glance
The SE4ALL was officially launched during the UN General Assembly (UNGA) of September 2011 by the UN Secretary General (UNSG) Ban-Ki-moon and is currently being supported by the entire UN apparatus. Back in February 2011, the UNGA had already decided to designate 2012 as the International Year for SE4ALL . The inter-agency coordinating mechanism UN-Energy, UNIDO and UNDP have been leading the process together with the UNSG’s Advisory Group on Energy and Climate Change (AGECC). Noteworthy, the AGECC was a key body in the initiative’s conceptualisation .
The High-Level Group (HLG) was created as a multi-stakeholder body gathering personalities from all constituencies created by the UNSG to design of the initiative’s implementation framework in line with the “UNSG’s Global Vision Statement” of November 2011. The HLG was subdivided in Taskforces which were responsible for the preparation of reports which subsequently led to the formulation of the “Framework for Action” . Based on the latter, the “Global Action Agenda” was then prepared and presented during the Clean Energy Ministerial in April 2012. In parallel to the HLG, the UN Foundation (UNF) through the Energy Access Practitioner Network (EAPN) , and UN Global Compact (UNGC) have also been supporting the formulation process by compiling the input from part of the private and not-for-profit sectors .
Structure of SE4ALL targets UN Structure of SE4ALL formulation process
The SE4ALL targets cover the three major topics in the energy field: (i) Ensuring universal access to modern energy services, (ii) Doubling the global rate of improvement in energy efficiency, and (iii) Doubling the share of renewable energy in the global energy mix. The “Global Action Agenda” has added more concrete sub-targets (Action Areas and High-Impact Opportunities).
Ideally, all countries can participate in SE4ALL as donors or beneficiaries as long as they commit to the objectives of the initiative. However, depending on the state of the energy sector in a given country, the order of the objectives will be re-prioritised. For instance, while the first objective represents the priority for those developing countries with low electrification rates, the second objective is rather targeting at industrialized countries with high energy intensity levels. As of June 2012, more than 50 countries had already committed to the initiative . A number of NGOs and private companies had also made their commitment .
During the HLG meetings, it was decided to fast-track the initiative’s implementation in a small group of developing countries. In 2012, the UNDP, the WB (Energy Sector Management Assistance Program – ESMAP) and the European Commission (Directorate General for Development and Cooperation) have been leading scoping missions to a few targeted countries and prepare rapid assessments of the country’s energy sector that will then form the basis of the country strategies, first step towards the initiative’s implementation.
The preliminary results of the initiative were presented during a side event at Rio+20 in June 2012. The next milestone in the process will be the submission to the UN General Assembly by the UNSG of the initiative’s progress report in September 2012 . A baseline report establishing the monitoring system will also be prepared at the end of 2012 and will be published early 2013 . It has been recently decided to give a permanent structure to the initiative that will be composed of a Steering Committee and a permanent Secretary. We expect that additional information on the above mentioned issues will follow shortly.
Lights and shadows over SE4ALL
The initial steps of the initiative’s formulation process have been characterised by their strong focus on communications thereby contributing to set energy high on the international political agenda.
The publication of the already mentioned SE4ALL documents was accompanied by a number of roll-out events in all the continents and the organization of a side-event at Rio+20.
If successful, the initiative’s implementation will lead to the establishment of a coordinating mechanism for the energy development interventions of a significant number of actors (i.e. EU, WB and UN). This would be particularly beneficial for the highly fragmented off-grid renewable energy sector. A stronger coordination would help identify and upscale successful initiatives and build confidence amongst private investors thereby contributing to attract additional private funds.
However, establishing a solid coordinating mechanism will require the development of a more elaborated implementation framework (including a monitoring system with measurable indicators) than the one contained in the “Global Action Agenda”. More involvement from non-state stakeholders will be crucial at this stage of the formulation process.
As it is often stated, the initiative will necessitate quick-wins in order to generate enough confidence amongst the energy sector stakeholders. Maintaining political momentum will require proof of the initiative’s concrete results on the ground. It is therefore necessary to ensure that the implementation of the initiative at country-level successfully builds on existing donor-local energy programmes thereby avoiding delay in its implementation, but also duplications.
So far, the strong involvement of high-level political figures in the formulation process has raised concerns on their capacity to conceive a sustainable system that functions practically. The strong top-down nature of the process has also pushed many stakeholders to ask for a stronger participation from the authorities of the targeted countries in order to ensure the required ownership.
In spite of the multi-stakeholder nature of the initiative, no public consultation process has been carried out at the international or country level preventing a wider direct stakeholder participation in the formulation process. Hence many have called for a broader participation for the initiative wants to ensure its long-term survival.
The initiative should also be carefully planned to avoid creating distortions on the local market trends. From the 952 terawatt hours that will be necessary to achieve universal electricity access by 2030, 40% will be grid connected and 60 % will be off-grid (18% stand alone systems and 42% mini-grid) thereby making a strong case for the involvement of the off-grid renewable energy sector . The off-grid renewable energy sector, particularly PV, has experienced significant progress during this last decade. However, the grid connected sector is generally more visible and involved bigger player. It is therefore necessary that the initiative develops an implementation framework supporting a shift from an approach that runs the risk to be focused predominantly on grid-connected system to a more inclusive process associating more closely the off-grid sector . Designing such a system will require a stronger involvement from technicians and private sector representatives.
Substantive financing resources will also have to be further allocated to the initiative’s concrete actions in order to achieve its ambitious targets. The International Energy Agency has estimated that, only to achieve the first target of the initiative, $700 billion will have to be invested over the 2010-2030 period ($33 billion per year) .
Powerful actors in the development field such as the European Commission are currently restructuring their own fund schemes according to the UN SE4ALL targets, but, as stated above, no consultation process has been launched in this regard yet. The Commissioner for development Andris Piebalgs, has been strongly involved in the initiative since its inception as a member of the HLG.
Furthermore, energy has been highlighted as a focus area in “Agenda for Change” , the latest European Commission’s Communication on Development.
In this context, one would expect the European Commission to allocate more cooperation funds to energy in the future. The timing is particularly interesting as the 11th European Development Fund will start in 2014. Existing instruments such as the ACP-EU Energy Facility for instance, which directly focuses mainly on financing small and medium-scale energy projects in the ACP countries and has also allocated funds to the Africa-EU Infrastructure Trust Fund for large scale projects should be strengthened.
Other instruments, such as the Renewable Energy Cooperation Programme developed in the framework of the Africa-EU Energy Partnership (AEEP) could also become another important channel of SE4ALL EU-led funding. The AEEP could become an important dialogue platform for all EU SE4ALL stakeholders. Finally, it is also foreseeable that the DCI-ENRTP which depends entirely on the Commission’s budget gets more funding to launch new calls for proposals.
However, in spite of the l increase in public funds that the initiative will result in, additional private investment will be necessary to meet its objectives. The establishment of solid coordination, implementation and financial mechanisms will be crucial to convince the private sector to take a step further from commitment to the allocation of financial resources. In this line, a stronger involvement from the private sector in the entire process will be crucial.
Opportunities for the private sector (focus on off-grid)
The initiative’s focus on the private sector has created a new direct channel of dialogue between the public and selected private actors thereby representing a unique opportunity for industry representatives to showcase innovative technology solutions and successful business models that can accelerate the achievement of the SE4ALL targets. As a side-result, all selected private actors involved in the process have benefitted from a substantive improvement of their visibility within the energy sector.
The rest of the private sector that is not taking directly part in the initiative’s formulation has two main channels to get involved. On the international level, reaching the UNSG, UNIDO, UNDP; the EU, more particularly the Directorate General for Development and Cooperation, and the World Bank, particularly the Energy Sector Management Assistance Program (ESMAP) have become the main leaders of the SE4ALL formulation process and its implementation on the country level.
On the EU level, for example, one possible channel of dialogue with the African authorities, European Commission, several member states, the European Union Energy Initiative - Partnership Dialogue Facility would be the AEEP. We, the Alliance for Rural Electrification, as the AEEP focal point for the private sector, would be more than happy to channel specific requests from the European and the African private sectors.
On the country level, SE4ALL Local Taskforces have been created in those countries where scoping missions have already taken place. However, from our experience, the mentioned taskforces have only led to very limited participation from the local private and not-for-profit sectors. It is therefore necessary that companies that want to get involved in this process contact the EU Delegation, the UNDP and the WB country offices in order to push for the inclusion of non-state stakeholders.
As previously mentioned, the off-grid renewable energy sector will play a key role in the achievement of the initiative’s targets. In this line, the UN Foundation has established the Energy Access Practitioner Network (EAPN) which is focussed on rural energy projects. Among others, a working group on micro-grids has for instance been created to facilitate knowledge and technology exchanges and networking.
The private sector can make commitments to the initiative thereby officially getting involved in the process and benefiting from all the marketing possibilities that the initiative offers. For instance, the participation in organisation of SE4ALL related events that are currently receiving wide media coverage is a good opportunity for the private sector to network, and promote its services and products. In this context, the Alliance for Rural Electrification is for instance organising the first International Off-grid Renewable Energy Conference in Ghana together with IRENA and ECREEE .
As a following step, the companies could also earmark funds and projects as SE4ALL related. This will allow them to be better positioned and informed once SE4ALL funds are allocated thereby increasing the possibilities to perceive additional funds.
Conclusion
Though, there is still much work to be done to complete the framework of SE4ALL, the initiative is advancing very rapidly and its implementation is even being fast-tracked in some countries. If the private sector wants to benefit from the future opportunities offered by the initiative, a strategy based on “wait and see” might not be enough.
The private sector, more particularly the off-grid renewable energy sector, must get involved in the initiative’s implementation on the international and country level to ensure that its framework takes into account the crucial role that the sector will play in the achievement of the SE4ALL targets.
It is therefore key that companies and industry representatives enter in direct contact with the initiative’s leading agencies’ (UN, EU and WB) headquarters and country offices, through the Local SE4ALL Taskforces. The indirect involvement through platforms such as the EAPN represents as well a chance to advocate and network. The earmarking of funds and projects will also allow companies to be better positioned once SE4ALL funds are approved by the leading agencies for the initiative.
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