{"id":53037,"date":"2020-11-05T14:21:34","date_gmt":"2020-11-05T14:21:34","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=news&p=53037"},"modified":"2024-08-16T10:18:47","modified_gmt":"2024-08-16T09:18:47","slug":"the-case-for-scaling-up-renewable-energy-investments-in-fragile-and-conflict-affected-situations","status":"publish","type":"news","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/news\/the-case-for-scaling-up-renewable-energy-investments-in-fragile-and-conflict-affected-situations\/","title":{"rendered":"The case for scaling up renewable energy investments in fragile and conflict-affected situations"},"content":{"rendered":"\n

The impressive drop in the cost of clean technologies and the local practical potential of solar PV are making renewable energy an increasingly viable option from an economic perspective in fragile settings. Clean energy investment<\/path><\/svg><\/a> also has direct implications for tackling climate change, improving the socioeconomic inclusion of marginalised groups, and state-building – through greater legitimacy, resilience, and commitment to peace. These elements highlight the great potential that investments in renewable, reliable, and affordable energy hold to help countries escape state fragility.<\/p>\n\n\n\n

Access to renewable, reliable, and affordable energy is a key enabler of sustainable, social, and economic development. However, global inequalities in this respect are great, and gaps appear to be especially wide and persistent in fragile and conflict-affected situations (FCS) (see Figure 1). Estimates show that one-third of the approximately 790 million people across the world who did not have access to electricity in 2018<\/path><\/svg><\/a> lived in FCS.<\/p>\n\n\n\n

Figure 1. Average access to electricity (% of the total population)<\/strong><\/p>\n\n\n\n

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Source: World Bank (2020). Tracking SDG 7.1.1 Electrification Dataset.<\/path><\/svg><\/a><\/em><\/figcaption><\/figure>\n\n\n\n

Traditionally, conventional interventions such as the delivery of humanitarian assistance have been preferred to renewable energy investments, with state-building being regarded as a prerequisite for investments in energy systems (see Figure 2). This thinking entails limited effort towards clean energy investments in fragile environments from development agencies, including multilateral and bilateral development finance institutions, and local authorities affected by poor governance, lack of resources, and perverse incentives. As a consequence, there is limited penetration of renewables in FCS.<\/p>\n\n\n\n

Figure 2. Median international financial commitments per capita to developing countries in clean energy, R&D, and renewable energy production (US$)<\/strong><\/p>\n\n\n\n

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Source: World Bank (2020). Tracking SDG 7.a.1 International financial flows dataset<\/path><\/svg><\/a><\/em><\/figcaption><\/figure>\n\n\n\n

Here, we argue that there are strong reasons to think differently about these issues: investing in clean energy systems and technologies, through fragility-sensitive approaches, is just as urgent a priority for FCS as it is for more stable environments. In addition, the positive feedback loop between securing access to clean energy, state-building, and peace, explored at the end of this blog, makes a strong case for pursuing renewable energy investments in tandem with other interventions that tackle state fragility and to do so in a committed, long-term fashion.<\/p>\n\n\n\n

Fighting climate change through clean energy investments is a priority for FCS<\/h1>\n\n\n\n

Climate change is among the greatest global systemic shocks threatening FCS, with recent forest fires in Angola and the Democratic Republic of Congo<\/path><\/svg><\/a>, and locust swarms hitting East Africa<\/path><\/svg><\/a>, being indicative examples of the range of possible impacts. Above all, climate change matters for FCS<\/path><\/svg><\/a> because these environments are highly exposed to its negative consequences. Today, three out of five people living in conditions of fragility<\/path><\/svg><\/a> live in settings which are vulnerable to climate change, and of the 20 least-electrified countries over the period 2010–18, over half are on the World Bank’s Harmonized List of Fragile Situations<\/path><\/svg><\/a>, including the Central African Republic, Democratic Republic of Congo, and Somalia. The challenges of poverty and vulnerability to climate change converge in those FCS whose populations are highly reliant on climate-dependent sectors, such as rain-fed agriculture, where processes of desertification could push millions into hunger.<\/p>\n\n\n\n

Moreover, conflict, poor governance, and vested interests in fossil fuel-based energy slow down efforts in implementing climate change mitigation policy and investments in renewable energy that would help drive reductions in emissions and thereby mitigate climate impacts.<\/p>\n\n\n\n

Climate change is a threat multiplier that will magnify existing fragilities<\/path><\/svg><\/a> unless international- and national-level action is undertaken with urgency. For instance, growing climate change-driven poverty, food insecurity, and water scarcity are likely to ignite social resentment, protest, and even conflict over the control of scarce resources.<\/p>\n\n\n\n

Renewable energy investments make economic sense<\/h2>\n\n\n\n

Technological progress has driven a remarkable drop in the cost of clean energy technologies, such as those for solar and wind power, which are therefore becoming increasingly affordable products for poorer households. Achieving greater affordability is critical for FCS, where high poverty incidence constrains the purchasing power of the population. In addition, renewables are not only becoming cheaper<\/path><\/svg><\/a> in absolute terms but are increasingly outcompeting traditional fossil fuel-based alternatives. This is especially relevant for FCS where fuel costs are often prohibitive. For example, Mogadishu, Somalia<\/path><\/svg><\/a> offers some of the most expensive electricity in the world, as the cost of one kilowatt of electricity from diesel generators is four times higher than in neighbouring Kenya and ten times higher than in the US. On the other hand, lower energy costs from renewables could stimulate investment, enterprise growth, and the creation of productive private-sector jobs.<\/p>\n\n\n\n

Moreover, thanks to favourable geographical characteristics – including land availability, sunlight, soil configuration, and air temperature – several FCS have among the world’s highest practical solar photovoltaic potential, or the output achievable by a photovoltaic system. This makes solar energy an especially promising opportunity in fragile locations such as Afghanistan, Libya, Yemen, and Sudan.<\/p>\n\n\n\n

Figure 3. Photovoltaic electricity potential<\/strong><\/p>\n\n\n\n

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Source: https:\/\/solargis.com\/maps-and-gis-data\/download\/world<\/path><\/svg><\/a><\/figcaption><\/figure>\n\n\n\n

Finally, renewable energy systems have another favourable feature for fragile settings: scalability. Photovoltaic systems in particular rely on modular solar panels, which, at a small scale, can provide affordable electricity to remote, off-grid households. For instance, in East Africa<\/path><\/svg><\/a>, the off-grid, pay-as-you-go market is now able to offer systems in the 0–150-watt peak range that are attractively priced, often requiring no down payment, and are capable of running appliances such as radios, televisions, and fridge-freezers. At the commercial level, the modularity of solar panels can be exploited by expanding initially small investments incrementally to develop larger solar energy plants over time, as conditions on the ground allow.<\/p>\n\n\n\n

Renewable technologies can be deployed through resilience-enhancing decentralised systems<\/h2>\n\n\n\n

Fossil fuel-based power generation lends itself to large, centralised systems because it relies on long supply lines and is associated with significant economies of scale. Instead, wind and solar energy are well-suited to a decentralised power system architecture, since they are available everywhere, do not require long supply lines, and exhibit much more modest economies of scale and smaller capital requirements for cost-effective power generation.<\/p>\n\n\n\n

Decentralisation is an important characteristic in contexts of fragility as it strengthens the resilience of individual power systems, but also enhances wider economic and political resilience. This is because decentralised systems:<\/p>\n\n\n\n