Powering Equitable Futures: Realizing the Promise of Decentralized Renewables

Nicole Iseppi, Director of Global Energy Innovation, Bezos Earth Fund

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The outcomes, calls to action and promises from last month's United Nations COP28 climate negotiations stand as both inspiring and discouraging developments. As the global community reflects on the events that unfolded and the pledges assumed, it’s clear that despite progress on the global energy transition, millions still lack access to electricity. This gap continues to entrench disparities in health, education, food security and gender equality in vulnerable rural communities. This trend is not just unsustainable; it is also not at the service to humanity and future generations.

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The stagnating growth and funding of decentralized renewables is alarming. As the International Energy Agency (IEA) reported, a staggering 70% of funding in countries lacking access to energy still expands fossil fuel capacity rather than embracing clean energy. The gender impacts are also concerning – women are disproportionately affected as they bear with the health consequences and time burdens from energy deprivation. Targeted investment in decentralized renewables can significantly alleviate these burdens, enabling gender equity and women’s empowerment.

While centralized grid infrastructure expansions have a role, they cannot address the profound energy deficit experienced by remote and underserved regions alone. It’s time to spotlight the transformative potential of decentralized clean energy solutions – mini-grids, off-grid solar and more – as essential complements for achieving comprehensive energy access.

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To shift the current trajectory, it's imperative we increase out focus on three critical intervention areas:

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1.???? Policy de-risking: Governments must cultivate regulatory environments that entice private investment in decentralized renewables. Strategies like guaranteeing power purchase agreements or providing financial risk mitigation mechanisms can incentivize increased capital inflow.

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2.???? Innovative business models and skills development: Rethinking traditional business models is pivotal. Innovative approaches leveraging decentralized renewables for productive uses, like powering agricultural equipment or local industries, can profoundly impact communities. At the same time, emphasizing skills development alongside manufacturing will ensure sustainable job impacts.

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3.???? Localizing value chains: Strengthening local value chains for the manufacturing, installation, and maintenance of renewable energy systems is also pivotal. This not only creates much-needed local jobs, but also nurtures economic growth within communities that need it the most.

Investing $25 billion annually into distributed solar solutions can create over 4 million jobs annually, bridging energy access for roughly 400 million individuals in unelectrified regions by 2030 according to International Renewable Energy Agency (IRENA) estimates. Universal household electrification powered predominantly by decentralized renewables can potentially generate around 60 million full-time equivalent jobs by 2050 while massively improving socio-economic outcomes for marginalized communities according to Rocky Mountain Institute (RMI) and IRENA analysis.

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Remarkable initiatives in certain regions such as Sub-Saharan Africa and South Asia showcase the potential of decentralized renewables. Community-led mini-grids power local schools, health centers, and small enterprises are all signs of progress. However, we can do more.

In the aftermath of COP28, enabling environments that prioritize decentralized renewables are pivotal to also unlocking human potential and economic prosperity. These investments constitute more than infrastructure – they represent commitments to justice, equity and sustainability for all.

If we are committed to an equitable and livable future, investing in decentralized renewables is not just an option – it’s imperative. No community should be left behind in the pursuit of energy justice and inclusive development. Together, lets make this new year of 2024 - the year to accelerate solutions and implementation & delivery of decentralized renewables.