24 March 2012 -  2012: International Year of Sustainable Energy for All

Dr. Kishan Khoday, Deputy Resident Representative
United Nations Development Programme (UNDP), Riyadh

Recognizing the pivotal role energy plays for development, the UN General Assembly has designated 2012 as the International Year of Sustainable Energy for All, formally launched by the UN Secretary General at the World Future Energy Summit on 16-18 January 2012 in Abu Dhabi. This presents a unique opportunity for the international community and the UN system to advance the efforts towards universal access to modern energy services by 2030 as called for by UN Secretary General’s Advisory Group on Energy and Climate Change. 

In June 2012, world leaders are expected to come together at the UN Conference on Sustainable Development (UNCSD or the Rio+20 Earth Summit) to agree on three global energy goals for 2030: (i) achieving universal access to modern energy services, (ii) improving global energy intensity through improved energy efficiency and related measures by 40 percent and (iii) producing 30 percent of the world’s energy from renewable energy. The expected outputs are: international political commitment in a Global Strategy; national plans to achieve the goals; implementation through national coordinating committees and public-private partnerships; and innovative financial mechanisms to fill current gaps. 

The way we manage and use energy resources will affect the way we address the challenges of climate change, poverty, and the global financial crisis. The world’s energy challenges are critical, with serious development implications. First is the challenge of energy access. Three billion people still rely on traditional biomass and coal to meet household energy needs. Second, is the challenge of energy security with global energy prices and import dependence often unbearable for many countries. Finally is the challenge of energy sustainability and climate change with a global transition to low emission pathways holding hope to reduce social and economic vulnerability.

Towards these goals, the Green Economy concept has arisen as a way forward, as a means of turning the energy challenge into an opportunity for new solutions driven by policy innovation, market-based mechanisms and new markets for clean technology. One of the pillars of next June’s Rio+20 Earth Summit, the green economy is defined by the UN as an economy “that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.”  Rather than new clean technologies being a drag on the economy, studies show that green investment can help achieve higher growth rates within 5-10 years of investment. Clean energy has been a particularly important focus for such investments in recent times, with countries turning to renewable energy and energy efficiency as a way of reducing dependence on energy imports while setting the foundations for a high-tech, knowledge-based green economy of the future. 

Global clean energy investments in 2010 were 630% over 2004 levels, with overall investments, public and private, increasing to a record $243 billion, of which solar energy accounted for 40%. In addition to investments in clean energy firms and technology development, investments are also going into clean energy assessments and mapping, infrastructure for transmission and distribution, and research and development. This applies to energy importing and exporting countries alike with the latter seeing it as a means of conserving oil for future exports by reducing energy intensity of growth at home. 

Year 2010 saw record $386billion market capitalization in clean tech (Cleantech Group 2011)

As noted by UN Secretary General Ban Ki-moon in his recent 2011 report to the UN General Assembly on Promotion of New and Renewable Sources of Energy, renewable energy is at the center of efforts to induce a paradigm shift towards a Green Economy. This included $94.7billion in wind power and $26.1 billion in solar power in 2010. From 2005-2010, Solar Photo-Voltaic (PV) saw 72% average annual growth rate globally, while Solar PV Grid saw 81% growth and Wind Power saw 25% average annual growth. This global expansion of renewables is also leading to market efficiencies with solar PV modules have dropped in price globally by 60% since 2008 and further technological innovations expected in coming years. 

Countries around the world are now establishing sustainable energy policies and strategies to engage global trends. Over 115 countries have now enacted policy support to promote clean energy including regulations, fiscal incentives, public and private finance mechanisms, or target-based policies. By 2010, about 100 countries have also set new renewable energy growth targets. Countries are using a menu of policy options and public-private partnerships to establish national frameworks for research, development, deployment and commercialization of new and renewable energy. 

Sustainable Energy and the Arab Region

The International Year of Sustainable Energy for All has strong resonance in the Arab region, aligned with the Riyadh Declaration on Energy for Sustainable Development issued in 2008 at a global summit of energy producers and consumers. Energy remains central the Arab region’s economy, with the sector making up approximately 40% of the regions total GDP and up to 60% of the world’s oil reserves. The International Year of Sustainable Energy for All serves as impetus to reorient the region’s world-leading energy sector expertise, take advantage of its world leading solar radiation levels, and set the foundations for a future as a leader of clean energy expertise, technology and finance. In response to drivers of energy security and climate change, countries around the region are now enacting new policies and actions plans to expand clean technology as a means of reducing energy intensity of growth, preserving scarce energy reserves for future generations, and supporting the rise of new high-tech, knowledge-based industry and future jobs for youth. 

National policy reforms can support market transformation to a sustainable energy economy, removing regulatory barriers that sustain fossil fuel use and hinder development of energy efficiency and renewable energy options. Examples include: enhancing regulatory policy frameworks, tariff structures and market incentives, stimulating business innovation and private sector participation, enhancing design and targeting of energy subsidies to remove barriers to expansion of clean technologies, and phased introduction of low-emission technologies. National targets have been set in several Arab countries in recent years. 

Technology Needs Assessments are an important starting point, undertaken by several Arab countries in recent years such as Egypt, Jordan, Lebanon and Tunisia, all of which have also launched implementation measures for expanding renewable energy and energy efficiency in industry, buildings and other sectors. Key to commercialization of sustainable energy measures is the process of establishing standards and certification systems. Algeria, Tunisia, Lebanon and Morocco for example all have energy efficiency standards for consumer appliances along with targeted campaigns for retailers and consumers to make green purchasing choices. With buildings accounting for up to 40% of global energy consumption and up to 35% of carbon emissions, the building sector also hosts the largest, most cost-effective opportunities for energy efficiency. Progress has been marked in introducing such measures into construction and buildings in places like Egypt, Mauritania, Morocco and UAE. 

Arab countries hold large potential for solar and wind energy given natural endowment of strong solar radiation and wind currents. But the installed capacity of renewable energy in the region remains low, at about 7% of overall energy mix, largely from hydropower capacities in Egypt, Syria, Iraq, Lebanon, Sudan, Algeria, Morocco and Tunisia. One of the largest examples of solar technology use for sustainable development is in Morocco, where 160,000 solar home systems have been installed covering 8% of rural households. Examples of national policies are in Algeria, where a National Action Plan sets goal for clean energy to rise to supply 5% of local energy demand by 2017 and a 20% share by 2030, in Tunisia where a National Energy Programme seeks to achieve 13% of energy from renewable resources by 2011, in Morocco with its goal of 20% renewable energy share by 2012, in Jordan with a target of 10% renewable share by 2020, and Egypt where great attention was placed in recent years to exploring the country’s vast potential for solar and wind power with a goal of 20% renewable energy by 2020. 

Renewable energy opportunities are also on the rise in the Gulf. The United Arab Emirates plans to establish Masdar City as a model in the region for the low-carbon city of the future, while the country has made progress in developing CDM initiatives for mobilizing foreign investments into new clean energy initiatives, including a new large-scale solar power facility, while Qatar moves ahead with plans for Energy City and Bahrain integrates clean energy into its World Trade Center. In the Kingdom of Saudi Arabia, new institutions have been launched including the King Abdullah City for Atomic and Renewable Energy, a new Solar Energy Research Center in King Abdullah University for Science and Technology, and a new Climate Change Center for Excellence at King Abdul Aziz University. 

An important example of future opportunity is the proposal for a pan-Arab solar network stretching across the region’s deserts to capitalize on the region’s world-leading levels of solar radiation. A private initiative led by EU investors, the Desertec project would generate 550 gigawatts (GW) of electricity up to 2050, and would service both local demands within Arab region as well as export markets in the EU by 2025. Initial solar capacity would be hosted across North Africa, from Morocco to Egypt with possible expansion to the Arab Gulf. A particular focus is on concentrated solar power (CSP), which is set to expand globally by a factor of ten times in coming years. CSP is one of the few renewable technologies with capacity for scaling up to fulfill significant proportions of energy demand, with a need for global financing, investments into research and development activities. Thus far, CSP projects have been proposed by Algeria, Egypt, Jordan, Libya, Morocco and Tunisia.

Meanwhile the Arab region successfully won the right to host the International Renewable Energy Agency (IRENA) in UAE. This holds the opportunity of bringing world leading policies and practices to the region’s efforts. The Arab Regional Strategy for Sustainable Consumption and Production also calls for greater cooperation among Arab countries in areas of energy efficiency and renewable energy, with the Regional Center for Renewable Energy and Energy Efficiency in Cairo could help lead such an effort in the future in concert with emerging centers of excellence across the region including in the Gulf. Scope exists for technical cooperation among Arab countries to share expertise and resources given the world-class energy facilities and expertise in the region that could now be directed towards the goal of a sustainable energy future. Key issues of common concern include: energy subsidy reform, solar power feed-in-tariffs and PV technology development, incentives for technology transfer and foreign investment including through venture capital, and end-use efficiency policies for industry, consumer appliances and buildings.

At the national level, capacities need to be strengthened in sustainable energy policy formulation, in the proper targeting of measures like energy subsidy reform, and providing an enabling environment for private sector investment in the transition to clean technology pathways. Market incentives are a key benefit of clean energy policies and regulatory frameworks, setting an enabling environment for rise of market opportunities and new foreign and domestic direct investments. Unless the right to energy access and related issues of social equity are addressed within policy and regulatory frameworks, chances are that clean energy innovations and benefits will bypass the poor and vulnerable communities who can benefit most from access to modern, low-cost and low-polluting energy sources. This is particularly important in the Arab region, where approximately 40% of the poor lack adequate access to energy services. In Egypt, the Occupied Palestinian Territories, Sudan and Yemen for example, a significant part of the population falls below the poverty line and lacks access to sustainable energy needed for basic needs. In Sudan and Yemen electrification rates are as low as 25%. 

Through an integrated development approach, the UN helps developing countries expand access to sustainable energy in order to achieve green economic growth, reduce poverty, improve the health of their citizens, and mitigate climate change. Investing in clean, efficient, affordable and reliable energy systems is indispensable for a inclusive and sustainable future. Ensuring energy security will require diversification of types and sources of energy, with increasing focus on consumer needs, and expanding indigenous energy supplies, renewable energy and energy efficiency. 

UNDP is among the UNs leading agencies supporting clean energy solutions at the national level, with over 100 projects valued at over US$1.6billion in more than 80 countries around the world. UNDP has been present in Saudi Arabia since 1966, with energy and environment standing as a key part of our cooperation in the Kingdom ever since.