Impact of Just Energy Transition (JET) on the Value Chain Market

The global developments in the just energy transition (JET)are expected to have a significant impact on the value chain market. As more countries and industries shift towards cleaner and sustainable energy sources, there will be a growing demand for green technologies, products, and services throughout the value chain. Companies that can adapt quickly to this changing landscape and offer solutions that support the just energy transition will likely see growth opportunities. This may include companies involved in renewable energy generation, energy storage, energy efficiency, and sustainable transportation, among others.

Additionally, as companies and consumers become more conscious of their environmental footprint, there may be an increased focus on transparency and sustainability within the value chain. This could lead to changes in supply chain practices, product design, and overall business strategies to align with the goals of the JET.

Overall, the JET is expected to reshape the value chain market by driving innovation, creating new business opportunities, and promoting sustainability across industries.

Dhevan Pillay, the immediate Past President of EASA (ESCo Association of Southern Africa) and the current Vice President of the Southern African Energy Efficiency Confederation (SAEEC), stands as an example of innovation and dedication in the energy sector. He shared his thoughts on JET and how greater collaboration is required to make this transition a success at the ‘Future of Sustainability’ event as per the following links: LTM Energy Group CEO, Dhevan Pillay, Advocates For Sustainable Growth Through Just Energy Transition And Regional Cooperation – Business Media MAGS and https://www.youtube.com/watch?v=yfxBY2YOBm8

Impact of regional and continental cooperation to accelerate progress on global sustainability themes.

Shared Challenges, Localised Solutions: Many sustainability issues, like climate change, water scarcity, and biodiversity loss, transcend national borders. Regional cooperation allows countries to tackle these challenges collectively, sharing best practices and resources that might be limited individually. For instance, countries in a river basin can cooperate on water management strategies or collaborate on developing renewable energy grids.

Strength in Numbers: By working together, regions and continents can exert greater influence on international agreements and negotiations. A united front can promote ambitious goals and hold each other accountable for implementation. Imagine the European Union pushing for stricter carbon emission regulations, or African nations advocating for increased funding for climate adaptation in developing countries.

Knowledge Sharing and Innovation: Regional collaboration fosters knowledge sharing between countries with different experiences and expertise. A developed nation with advanced clean technology can partner with a developing nation rich in natural resources to co-develop sustainable solutions. This cross-pollination of ideas can lead to faster innovation and more effective sustainability strategies.

Economic Benefits: Regional cooperation can unlock economic opportunities through trade of sustainable goods and services. Think green technologies, organic produce, or eco-tourism initiatives. This fosters regional economic resilience and incentivizes further investment in sustainable practices.

Examples of Existing Cooperation:

The European Union is a shining example of successful regional cooperation on sustainability. They have implemented ambitious climate targets, created a circular economy action plan, and set high environmental standards.

The African Union’s Agenda 2063 outlines a vision for a sustainable and prosperous Africa. It emphasizes regional collaboration on climate change, food security, and renewable energy.

Challenges and Considerations:

Political will and differing national priorities can hinder cooperation.

Effective communication and institutional frameworks are crucial for successful collaboration.

Ensuring equitable benefits for all participating countries is essential.

Overall, regional and continental cooperation offers a powerful way to address global sustainability challenges. By leveraging shared resources, knowledge, and a united voice, regions and continents can accelerate progress towards a more sustainable future.

Despite the immense potential for renewable energy in Africa, several hurdles hinder African entrepreneurs from accessing seed funding for their projects:

Perceived Risk: Seed funders typically deal with early-stage ventures with inherent uncertainties. Renewable energy projects in Africa face additional perceived risks due to factors like:

• Unstable political environments in some regions.
• Lack of established track record for some renewable technologies.
• Perceived challenges in grid integration for off-grid projects.

Limited Track Record: The African renewable energy sector is still relatively young. Seed investors often seek a history of successful projects in the region before investing, creating a catch-22 situation for new ventures.

Lack of Awareness:  Many potential seed funders might not be fully aware of the opportunities and growing potential of renewable energy projects in Africa.

Inadequate Financial Infrastructure:  Compared to developed regions, Africa has a less developed financial infrastructure for early-stage ventures. This includes a shortage of angel investors, venture capital firms specializing in renewables, and limited access to incubators and accelerators that provide financial and mentorship support.

High Transaction Costs:  The legal and administrative processes for setting up and financing renewable energy projects can be complex and expensive, especially for smaller ventures, further straining their limited resources.

Local Currency Fluctuations: Currency fluctuations in some African countries can pose a challenge for investors seeking stability in their returns.

These barriers make it difficult for promising African renewable energy projects to secure the initial funding needed to move from concept to development.

The Myth: Furthermore, renewable energy is deemed to pose risks to the utility grid, but it’s also not the whole story. Renewable energy sources like solar and wind are intermittent, meaning they generate power only when the sun shines or the wind blows. This variability can create challenges for grid stability and reliability.

However, certain renewable energy sources, such as:

• Waste-to-energy
• Conduit hydro
• Green hydrogen
• Quad Generation (multigeneration facilities producing electricity, heat, cooling, and water)

Can provide baseload power, which can help stabilise the grid. These sources can generate power consistently, complementing the variable loads from solar and wind. Moreover, advancements in grid management technologies, energy storage solutions, and smart grid infrastructure enable better integration and management of renewable energy sources, mitigating potential negative impacts on the grid.

Renewable energy can benefit the grid as follows:

• Renewable energy reduces greenhouse gas emissions, supporting a cleaner and more sustainable energy mix.
• Diversifying energy sources with renewables enhances energy security and reduces dependence on fossil fuels.
• Grid modernisation and smart technologies enable efficient integration of renewable energy sources.
• Baseload renewable energy sources like Waste-to-Energy, Quad Generation, Green Hydrogen and Conduit Hydro power can stabilise the grid.
• Energy storage solutions help manage variability and ensure a reliable energy supply.

Renewable energy can bring significant benefits to the grid, supporting a successful transition to a more sustainable energy future.

There are positive developments:

Rise of Impact Investors:  There’s a growing interest from investors focused on social and environmental impact alongside financial returns. This is creating new funding opportunities for African renewable energy projects with a strong social impact component, such as providing clean energy access to underserved communities.

Focus on De-Risking:  Initiatives like the Sustainable Energy Fund for Africa (SEFA) provide technical assistance and grants to de-risk renewable energy projects, making them more attractive to seed investors.

Regional and International Support:  Organisations like the African Development Bank (AfDB) and the World Bank increasingly provide financial and technical support for renewable energy development in Africa.

By addressing these barriers and fostering a more supportive ecosystem, Africa can unlock its vast potential for renewable energy and create a more sustainable future.