Download Socio-economic Impacts of Renewable Energy

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Socioeconomic Impacts of
Renewable Energy
EGX 2015
Ayman Shehata
PwC CSR Strategy Manager
Introduction
• This presentation tries to bridge the gap between Renewable Energy
as an environmental and economic tool and as a societal and
community tool
• Socio-economic impacts of Renewable Energy
• How RE can be used as a tool for rural development
• How RE can be used as a tool for rural development and community
empowerment
• “how” the implementation process can lead to much wider societal
impact through Community-owned Renewable Energy projects
Socioeconomic effects of renewable energy :
Macroeconomic effects
• Value added
• GDP
• Employment
• Welfare
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Socioeconomic effects of renewable energy: The employment
opportunities for value creation along the segments of RE value
chain
• “From a sustainable development perspective, the term value
creation goes beyond the traditional economic definition, to include a
vast array of socio-economic benefits to society. These include job
creation, improved health and education, reduced poverty and
reduced negative environmental impacts (IRENA, 2045).”
• Worldwide, there were about 6.5 million direct and indirect jobs in
the renewable energy sector in 2013, of which more than 3.1 million
were related to solar PV, CSP and wind technologies
segments of RE value chain
• Socio-economic effects can be traced along the different segments of
the value chain, including project planning; Manufacturing, grid
connection, Operation and maintenance, Decommissioning.
• Further opportunities for value creation exist in the supporting
processes such as policy- making, financial services, education,
research and development and consulting in the fields related to
Renewable Energy
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Policy Insights
• Depending on the maturity of a country’s renewable energy sector,
more or less value may be created domestically.
• Accordingly, a broad range of cross-cutting policy instruments may
influence value creation from the deployment of large-scale solar and
wind energy.
• These policies can stimulate deployment and aim at building a domestic
industry by encouraging investment and technology transfer,
strengthening firm-level capabilities, promoting education and training,
as well as research and innovation.
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Policy Insights
• Maximizing value creation requires a long process of researching the
different tradeoffs between the different policies and their impacts
along with their interrelated causality in order to reach the right policy
mix, which is crosscutting and tailored to country-specific conditions
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Welfare
• The measure of GDP can be complemented with various welfare-related
indicators developed to quantify economic performance. These indicators
range from the concept of welfare in conventional economics to alternative
measures of well-being, such as the Human Development Index
• “In conventional economics, welfare is an indicator of material economic
well-being, measured as an aggregation of the utility that consumption or
other activities/goods/services (for example, leisure) provide to a group of
people
• It is used in economic modelling and analysis to assess the changes in wellbeing of a society, which are not necessarily reflected in other variables such
as GDP
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Wellbeing
• Renewable energy deployment can affect many such indicators of wellbeing. Possibly the most important dimensions are environmental and
health-related.
• For example, power generation and road transport are two of the main
sources of air pollution.
• Subjective wellbeing is influenced by the quality of the local
environment, which also affects environmental health.
• Plenty of environmental policy instruments try to internalize a the
pollution harmful externalities on the welfare state through an estimate
equivalent cost.
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Sustainability& the Poor
• “In March 2014, the WHO reported that 7 million premature deaths
annually are linked to air pollution; by comparison, the AIDS pandemic
killed 2.3 million people globally in 2005, its worst year”(WHO, 2014).
• Research shows that is the poor who bear most of the ill-health and other
costs of environmental problems.
• Their houses and neighborhoods are the worst served with water, sanitation,
garbage collection, paved roads and drains.
• It is almost always the poorer groups who live in the places where the
pollution levels are worst
• poorer groups often choose such places because these are the only locations
where they can find affordable land for their housing close to sources of
employment
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Community Ownership and Community Power
• “Community ownership” covers RET projects that are completely in
the hands of a community, and those that are only partially
community owned (“co-ownership”).
• Different legal and financial models of community ownership include
co-operatives, community charities, development trusts and shares
owned by a local community organization
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“A project can be defined as Community Power if at
least two of the following three criteria are fulfilled:
• 1. Local stakeholders own the majority or all of a project
• 2. Voting control rests with the community-based organization
• 3. The majority of social and economic benefits are distributed locally”.
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CRE projects as those which do the following:
• Decarbonize – Use renewable energy and other low carbon
technologies (the environmental dimension);
• Decentralize and localize energy supply (the technical dimension); and
• Democratize energy governance through community ownership and/or
participation (the socio-political dimension)
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