Power to the people

HÉLÈNE PELOSSE, Interim Director-General of the International Renewable Energy Agency (IRENA), tells Making It about the new intergovernmental organization and its plans to help extend the use of renewables in both industrialized and developing countries.

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IRENA’s Hélène Pelosse meets UN Secretary-General Ban Ki-Moon in New York

What do you see as the particular importance of IRENA for the increased use of renewable energy across the globe?

Until IRENA was founded in January 2009, there was no single international governmental organization that was mandated solely with the promotion of renewable energy. The fact that 75 countries established IRENA, and that this number has risen to 137 only six months later, shows that countries all over the world felt the need for such an agency.

Renewable energy production has increased sharply during the last decade. Last year, both the United States and the European Union added more power capacity from renewables than from conventional sources. In the four years from the end of 2004, total power capacity from new renewables increased by 75% to 280 GW. Renewables are clearly a success story, but obviously the global use of renewable energy has to be scaled up further. We are faced with numerous challenges such as rising energy prices, climate change, and energy poverty in many regions of the world. Renewables are the answer to these challenges, and have to be introduced more quickly and used more extensively than before.

This is where IRENA comes in. Unlike other institutions that only partly deal with renewable energy, IRENA has been founded as a one-stop-shop. The agency will advise its members on implementing suitable policies, programmes, and regulations to stimulate the introduction of renewable energy. The right framework conditions are crucial in this respect. Countries have to create a favourable environment for renewables, and IRENA will assist them with this. Moreover, the agency will facilitate access to financing for renewable energy projects and technology transfer. I know that these two issues are of special importance for developing countries. And last, but not least, IRENA will help its members with training and capacity building – because the most sophisticated technology is worthless if a skilled workforce is missing.

Do you think developing countries have realistic ambitions of meeting the growing demand for renewable energy equipment, and, if so, how can policy-makers help this happen?

I am absolutely positive that developing countries will take part in the global development and production of renewable energy technologies. From solar home systems in Ethiopia, to cook stoves in India, to grid connections in Colombian slums, market-based solutions developed by entrepreneurs within their respective economies are delivering safe and affordable energy to customers. These market-based projects are either targetting the 1.6 billion people worldwide with no access to electricity or the three billion people using traditional biomass – fuelwood, charcoal and animal dung – for cooking. Companies all over the world are increasingly aware that these markets – that at first glance appear to be unprofitable – are huge. Estimates indicate that there is a US$500 billion market for safe, clean, and affordable modern energy – and it is increasingly serviced by entrepreneurs from within that market itself.

A good example is Grameen Shakti in Bangladesh, one of the largest and fastest growing rural-based renewable energy companies in the world. As of March 2009, Grameen Shakti had installed 220,000 solar home systems in rural areas, each one turning a house into a small power plant. Their business model is very convincing, and I do not see why similar enterprises should not be possible in other countries.

During recent visits to Morocco and India, I learned about their plans to create preferential zones for renewable energy technology production. The United Arab Emirates is, at this very moment, setting up such a zone in Masdar, the sustainable city project outside the capital, Abu Dhabi. I would highly recommend the establishment of such zones in countries all over the world. With fast-track administrative procedures, lowered or zero import tariffs and taxes, and additional benefits, they create a favourable environment for the development of renewable energy technologies. In the past, many countries have successfully established such zones to support specific sectors of their economy. Now is the time to do the same for renewable energy technologies.

The second issue of Making It will focus on energy for development. What can be done to help developing countries access appropriate financing in order to exploit their renewable energy potential?

I can see two ways in which IRENA can help in this respect.

Firstly, the experience of past years has demonstrated that investors need the right political and economic framework conditions to invest in renewable energy projects in countries all over the world. Some of IRENA’s member countries, like Germany, Spain and India, have attracted investors because they introduced effective support programmes, guaranteed stable investment environments, and offered a skilled workforce. IRENA can provide its members with advice and assistance on how to adapt such tried and tested policies to specific national conditions, in order to stimulate investment in renewable energy projects. The Agency will thus help its members to profit from the experience of other countries and, at the same time, help them to avoid making the mistakes that other countries have made.

Secondly, IRENA can provide advice about grant programmes and funding mechanisms and instruments specifically for renewable energy projects. A large number of such mechanisms already exist and IRENA will try to systematize them in order to eventually establish a permanently updated financing database. This is clearly lacking at the moment, and it will, I believe, speed up the implementation of the many renewable energy projects that are currently in the pipeline.

Interview by Cormac O’Reilly and Ralf Bredel, UNIDO