Powering Equitable Futures: Realizing the Promise of Decentralized Renewables

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 in service to humanity and future generations.

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. 

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

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.
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.
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.