Role of Clean Energy in Creating a Greener Economy

Clean energy is an important constituent of clean technology and is increasingly entering the discourse of policy and technology solutions to deliver both environmental and economic benefits. While the environmental benefits have always been known, it is lately seen that clean energy is being viewed as economically viable too. Primarily due to better climate change policies and rising fossil fuel prices across the world, investments in clean energy have grown considerably in the past decade. With larger production margins and economies of scale, clean energy is becoming increasingly cost competitive. The best demonstrated example of this trend is solar energy, which has an increased presence in global markets and is also creating green jobs at local levels¹.

Development of local clean energy can be a driver of economic diversification, presenting long term opportunities for creation of green jobs². Grameen Shakti is an excellent example of a fast growing rural-based company in the field of solar energy doing just that. It was founded in 1996 and provides electricity to rural communities in Bangladesh through a market-based approach. Grameen Shakti provides micro-credits through different financial packages to make solar home systems available and affordable to rural populations. Having already installed over 13,12,478 solar home systems by 2013, the enterprise has been simultaneously generating local employment by training the necessary technicians and users³.

The example of local energy sources upscaling and benefitting the global economy is best represented by the recent growth in solar energy deployment and increasing stock prices of solar photovoltaics (PVs). Last year, the world installed 36.5 gigawatts new solar photovoltaic generating capacity. First quarter of 2014 alone saw 9 gigawatts of capacity added worldwide – 35% more than last year’s record. As the installed cost of solar is expected to fall by around 7% annually over the next decade, it is projected that by 2021 the global cumulative installed solar PV capacity will surpass even that of wind power and reach 715.8 gigawatts⁴. As innovations in solar PV make them more efficient, economies of scale make solar systems more affordable than before. The figure here shows the growing billion dollar global solar PV market juxtaposed with the dropping prices of technology⁵.

Smart Power for Environmentally-sound Economic Development (SPEED), an initiative that the DA Group is involved in, provides decentralised renewable energy (solar or biomass) to underserved regions. The model encourages local private entrepreneurs to provide reliable self-sustained clean energy to households as well as local micro-enterprises. By providing access to electricity and energy services, the model also promotes socio-economic development. Increased energy access has led to adoption of drudgery reduction machines like flourmills, oil presses and other farm equipment which in turn has increased per day output, enhanced income generation and reduced workload of women working in the fields.

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