Linking the energy transition and economic development

The current expansion of large-scale wind- and solar technologies in the global South takes place in a time, context and way that is very different from how renewable energies initially developed in European countries such as Denmark and Germany.

In this collaborative article DIIS researcher Mikkel Funder joins colleagues from Stellenbosch University, University of Cape Town and Technical University of Denmark to point out four key institutional processes that are shaping the energy transition in the global South and its links to economic development:

• The emergence of a global policy regime that favours competitive auction mechanisms as the best way to procure renewable energy, which has meant that multinational energy companies have become key players in financing and operating renewable energy projects in the global South
• The interests and efforts of governments in the global South to link international investments in renewable energy projects to national economies, including job-creating “local content” programmes
• The role played by subsidiaries of international energy companies in diffusing technology solutions and shaping value chains, which is not always the one-way street that one might expect
• The development impacts of large renewable energy power plants on local communities and the actors and institutional dynamics that influence this

The authors examine these four processes in the context of South Africa, but suggest that they are also important for researchers and policy makers who wish to understand the energy transition in other countries of the global South.

The article is based on joint research within the wider TENTRANS project, funded by the Ministry of Foreign Affairs of Denmark and administered by Danida Fellowship Centre.

Further publications and information on the TENTRANS project can be found here:  https://unepdtu.org/project/tendering-sustainable-energy-transitions-tentrans/