This is according to new research from the Stockholm Environment Institute – an international non-profit research institute that tackles environmental and sustainable development challenges.
The paper highlights findings from a review of the literature on financing of renewable energy and clean cooking interventions. It focuses on sub-Saharan Africa but examines issues that may also warrant consideration in low- and lower-middle-income countries more generally.
The report focuses on findings which emerged from the review and outlines key areas for interventions in the renewable energy sector. The areas include:
Zooming in on transmission and distribution, the paper stated that the interventions tend to be more challenging than generation.
“They represent a significant bottleneck to clean energy expansion, to the overall viability of the energy system (due to large energy losses in networks that are not adequately maintained), and to the economy (due to reliability issues).
“Transmission and distribution require long-term support via grants and loans for operational improvements of the utility to effectively connect new-generation assets, enhance reliability, and improve efficiency.
“Innovative solutions such as externally financed transmission projects with independent operators may play an important role, offering a way forward for struggling utilities.”
On on-grid electricity access, the report states that efforts to expand access by extending grids or connecting new households to existing grids have succeeded in sharply increasing connection rates, which have reached 75% in Kenya and 85% in Ghana.
“However, expansion efforts face hurdles: high connection costs, low consumption, and a limited willingness to pay among potential customers.
“Addressing these challenges requires targeted subsidies (both on the demand and supply sides) and improvements in utility performance to enhance the value proposition of connections,” it said.
Touching on off-grid electricity access, the report states that these remain essential for remote communities, as demonstrated in some markets in East Africa (such as Kenya and Uganda). “High costs and market inefficiencies pose barriers to their adoption and sustainability. Making these solutions viable and suitable for different contexts will require financial support, market reforms, and risk-reduction measures.”
Looking into clean cooking, the paper states that while more people have gained access to clean cooking in recent decades, expansion has failed to keep pace with population growth in Sub-Saharan Africa.
“There are many different types of stoves with unique challenges, but, at present, there remains a fundamental trade-off between the efficiency and affordability of stoves. Donors’ approaches differ, with some prioritising efficiency and others affordability.
“Stove designs often do not cater to users’ preferences or cooking habits, hindering uptake.”
On knowledge production and capacity building, the paper states that while the evidence on such interventions is limited, measures can and should focus on policymakers and regulators as key enablers for a functioning energy sector.
“Such interventions aim to facilitate access to research, technology, and know-how for clean energy and energy efficiency and on enabling scaling up, coordination, and management of renewable energy and energy access. Successful interventions require long-term efforts that are adapted to local needs and situations.”
Lastly, on policy reform, the report emphasises the need to prioritise long-term, trust-building approaches which are key to securing significant and sustainable change.
“Understanding the political and economic contexts behind sector weaknesses is essential for crafting effective interventions.
“Independent regulators can be both targets of reform interventions to develop ‘islands of good practice’ and enablers of further reforms in the sector to improve performance.”
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