How investment can drive sustainable energy progress
How investment can drive sustainable energy progress
Progress on affordable and clean energy has slipped because of the Covid-19 pandemic, but experts speaking at Uniting Business Live argued that the time is right for investments to drive a recovery that centers on sustainable energy.
The COVID-19 pandemic has made achieving the Global Goals even more of a challenge. Sustainable Development Goals #7 concerning affordable and clean energy, and it’s is no exception. Before COVID-19 struck, 789 million people worldwide lacked electricity. The pandemic revealed that a quarter of health facilities are not electrified in many developing countries.
But the pandemic does provide an opportunity to rethink and renew efforts for achieving SDG #7. These will require significant investments. A panel at the UN Global Compact’s Uniting Business Live event was optimistic that positive changes are coming.
Changing investment strategy
Introducing the panel, Damilola Ogunbiyi, Special Representative of the Secretary-General for Sustainable Energy for All and co-Chair of UN-Energy, said the world has a “unique, once-in-a-generation opportunity to recover better” by investing in renewable energy, energy efficiency, clean cooking and local value chains.
Central to this is the need to move away from fossil fuels and reduce the carbon produced by energy generation. This is needed to meet not only SDG #7 but also the terms of the Paris Agreement, which aims to keep the global temperature this century below 2 degrees celsius. According to Jim Hempstead, Managing Director of Moody’s Investors Service, the necessary work has already begun. He said: “What we see is that the pace of decarbonization is accelerating.”
That is being driven by a changing investment strategy. In 2019, for example, Danish pension funds agreed to invest $52bn - over a tenth of the industry’s wealth - in sustainable energy over the next decade. Dewi Dylander, Head of Sustainable Investments at Danish pension fund PKA, said: “We believe that private investments are key if we are to reach the goals of the Paris Agreement.”
A greener energy sector
Investments like those are helping to drive change in the energy industry and, according to Mr Hempstead, are already having an impact on decarbonization. He said: “Utilities are probably having the biggest impact on this, in terms of driving out greenhouse gas emissions from the stack.”
An indication of how that is happening came from Francesco Starace, CEO and General Manager of Enel, the Italian energy giant. The company originally set a goal of a 25 percent reduction in greenhouse gas emissions by 2020 but the goal was actually reached in 2019. “We decided to be more ambitious,” he said. The new goal is a 70 percent reduction in emissions by 2030.
Enel has three focus areas: 1) adding clean and affordable energy on the generation side of the business; 2) digitizing and reinforcing transmission and distribution infrastructure to make energy secure and resilient; 3) making electricity pervasive in the areas that currently rely on fossil fuels - everything from manufacturing to cooking.
Cooking energy is easily overlooked as vitally important, panellists agreed. About a third of the world’s population have no access to clean cooking energy, which is a dire health risk in addition to being environmentally damaging.
Kenyan renewable energy startup BrightGreen recycles post-harvest agricultural waste and turns it into environmentally friendly briquettes. Chebet Lesan, BrightGreen’s CEO, said that her team quickly realised they were tackling an issue that could bring positive change to a number of the SDGs.
She said that some families spend more on cooking energy than on food, so providing a sustainable alternative can help tackle both poverty and hunger. She said: “Our work is impacting the most basic human right.”
This is just one example of how affordable clean energy can improve other aspects of life in developing countries. Sustainable energy creates three-times more jobs than fossil fuel equivalents, said Ms Ogunbiyi, which in turn increases GDP.
All the panellists agreed that there is much work to be done. Ahmed Badr, Director of Project Facilitation and Support at the International Renewable Energy Agency, said that a $3 trillion investment would be needed each year - more than double the amount invested in renewables and other energy transition technologies worldwide in 2019.
There is a will to drive change - and the money will follow..
