Background

Operating centres

As of today, the Global Network of Regional Sustainable Energy Centres (GN-SEC) comprises ten operational centres across the Arab and African regions (ECOWAS, SADC, EAC, ECCAS, and the Arab League), Asia and the Pacific (SPC, ICIMOD, ECO), and Latin America (CARICOM, SICA). The centres are officially endorsed by more than 120 Ministers of Energy and/or Heads of State, and together serve 41 out of 46 Least Developed Countries (LDCs) and 35 out of 39 Small Island Developing States (SIDS). To further broaden its geographic reach, a joint declaration on GN-SEC cooperation was signed between the Latin American Energy Organization (OLADE) and UNIDO in 2021.

Transitioning towards a new global business model

In line with the SDGs, the GN-SEC works towards a new global business model that enables the production of more goods and services required by a growing world population while using fewer resources and producing less waste and pollution. There is a growing trend towards circular economy policy concepts in response to the increasing scarcity and price volatility of raw materials, including fossil fuels, as well as the need to internalize the costs of environmental externalities such as air, soil, and water pollution and climate change caused by global greenhouse gas emissions.

The deployment of sustainable energy technologies is considered an effective tool to simultaneously and comprehensively address economic/industrial productivity and competitiveness, energy security, energy access/affordability, and the negative externalities of conventional energy systems (e.g., GHG emissions, local pollution). In this context, developing countries have also introduced far-reaching targets for scaling up renewable energy and energy efficiency technology markets (e.g., NDCs) over the coming decades. Most of these efforts are closely aligned with economic, industrial, and environmental policies targeting increased competitiveness, productivity, inclusiveness, sustainability, and resilience to climate change impacts.

Despite growing investments over the past decade, sustainable energy markets have not reached economies of scale, particularly in low-income developing countries. In the energy sector, the deployment of renewable energy and energy efficiency solutions remains hindered by a broad range of barriers and shortcomings related to policy and regulation, fiscal and non-fiscal incentives, technical limitations, economics, finance, capacity, quality infrastructure, R&D and innovation frameworks, knowledge, and awareness.

Moreover, in many developing countries, the inability of the domestic private sector to supply quality sustainable energy products and services at competitive prices has become a bottleneck for market uptake. The domestic manufacturing and servicing sector remains weakly developed, and the growing demand remains underserved by international suppliers and supply chains due to high market entry costs and risks. Furthermore, policies and technology transfer programs tend to focus on creating demand for sustainable energy products and services while neglecting supplier-oriented actions focused on strengthening domestic innovation systems, productive industrial capacities, and entrepreneurship.

Such trends raise concerns regarding the inclusiveness of technology transfer processes. While this situation offers opportunities, it also bears the risk that the local value creation and employment effects of such investments remain low and are not sustained in the long run. Particularly in least developed countries (LDCs), even basic equipment and services (e.g., consulting, energy auditing, installation, maintenance) continue to be imported. The absence of domestic suppliers and service providers calls into question the long-term sustainability of renewable energy investments already undertaken in various developing countries. Furthermore, the lack of domestic R&D and entrepreneurship hinders the commercialization of sustainable energy solutions adapted to the specific realities of LDCs and Small Island Developing States (SIDS).