International Good Practices for Employment Through Sustainable Energies

THE SE4JOBS PROJECT: INTERNATIONAL GOOD PRACTICES FOR EMPLOYMENT THROUGH SUSTAINABLE ENERGIES Dr. Steffen Erdle, Head of Project RE-ACTIVATE: Promoting Employment through RE/EE in MENA IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy Abu Dhabi National Exhibition Center, World Future Energy Summit, 20.01.2016 Page 1

The Regional GIZ Project RE-ACTIVATE Interregional & cross-sectoral project focusing on the nexus between Sustainable energy (both renewable energy & energy efficiency) Socio-economic development (esp. local jobs & value creation) Supporting market development, knowhow transfer, and strategy building for employment-intensive applications at the regional (MENA) level plus in three focus countries (Morocco, Tunisia, Egypt) Network structure with teams in Rabat, Tunis, Cairo, and Bonn Duration: 4 years (2014 2017), budget: 5 million EUR 12/03/2025 Page 2 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

SE4JOBS: A Key Activity of RE-ACTIVATE Launched in 2014 by 6 GIZ Projects dealing with the linkages between sustainable energy and socio-economic development as an expert group and work platform; supported by experts from adelphi and FFU Organization of 6 in-house + in-country workshops & trainings so far 12/03/2025 Page 3 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

What are the objectives of SE4JOBS? Help examine and exploit the many forward and backward linkages between RE/EE deployment and local socio-economic development, esp. as regards the optimization of employment and value creation by identifying and analyzing worldwide good practices and success models, especially in developing and emerging countries by distinguishing key variables and causal relationships that explain best the trajectories and results of the reference cases by translating these insights into new, customized tools and formats for technical assistance and capacity building: SE4JOBS Toolkit, SE4JOBS Good Practice Studies, SE4JOBS Training Modules 12/03/2025 Page 4 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

What are the expected outcomes of SE4JOBS? The interdependencies and tradeoffs that exist between the various technology pathways and policy options are better understood. This leads to more informed and more coherent policies and processes. Complementarities and synergies can be recognized and harnessed more effectively, incl. via new avenues of stakeholder engagement, a stronger exchange and cooperation across sectors and institutions, a better pooling of resources, and a smarter alignment of policy tools. The quality of the roll-out of RE/EE is supported, which leads to stronger benefits for and a greater acceptance by local populations. 12/03/2025 Page 5 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

The policy cycle approach of SE4JOBS 12/03/2025 Page 6 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

A Seminal Shift in RE/EE Deployment RE/EE deployment and associated manufacturing & ancillary services are quickly shifting from OECD to developing and emerging countries. Some of the latter have gained a key position in these new markets and generate strong socio-economic benefits for their populations. The lion s share of new local value and job creation is however still heavily concentrated in a relatively small number of countries. At the same time, these new RE/EE tigers feature very different framework conditions and pursue very different approaches. The number and range of experiences and approaches that have proven successful and can serve as examples has strongly increased. 12/03/2025 Page 7 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

The Key Requirements of Co-Benefit Catching Although there is neither a silver bullet nor a one size fits all solution, some recurring issues have proven crucial and should be considered. Only functioning domestic markets trigger the necessary investment. These depend on sound framework conditions and adapted support instruments that stimulate market actors and correct market failures. A critical mass of local stakeholders must be involved & support the process. These must have the capacities to organize & implement a large-scale, cost-effective, reliable and adapted deployment of RE/EE. Successful approaches are strongly contextualized. Key: strategy, implementation capacities, capacity building, stakeholder inclusion. 12/03/2025 Page 8 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Assessment, Strategy and Framework Building 1 Functioning markets require sound policy frameworks. Policies are needed to organize the investment-driven RE/EE roll-out and provide for the necessary system integration and stakeholder inclusion. Ideally, these policies are based on a strategy that connects the potentials and preferences of a society, organizes a roll-out pathway, and mobilizes the needed political, financial and technical support. Identifying and communicating socio-economic co-benefits for local populations is key to foster social acceptance and political support. Recognizing and addressing trade-offs and conflicting interests and objectives is also key for designing the right strategies and policies. 12/03/2025 Page 9 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Assessment, Strategy and Framework Building 2 Good policies are ambitious & visible, yet also realistic & adapted. They are based on a thorough assessment of one s potentials and challenges as well as on the strengths and weaknesses one has. They are translated into clear and sound goals and targets that are endorsed by the main stakeholders and communicated to the public. They are supported by a broad coalition of relevant stakeholders in politics, business, the media, and civil society. They are accompanied by a corresponding alignment of a country s policies, instruments, resources, and activities. 12/03/2025 Page 10 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Assessment, Strategy and Framework Building 3 Available tools for assessment and strategy support: from GIZ: ELMA, EQUIP, PRODUSE, CADRE; from others: AILEG, HELIO, IRENA toolkit Good practice options for domestic assessment approaches: China, Mexico: using ILO methodologies to estimate RE/EE employment with input-output-tables; South Africa: using a system dynamics model to estimate employment effects and environmental impacts All 6 SE4JOBS reference countries: using integrated, comprehensive, regularly reviewed multi-annual RE roll-out plans; EE strategies developed and implemented to differing degrees Good example for a regional approach: Arab NEEAP & NREAP Process 12/03/2025 Page 11 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Support Instruments and Business Development 1 A larger participation of the local workforce & business community, esp. of MSMEs, is crucial for stepping up the pace and scope of RE/EE deployment, while bringing down delays and costs linked to it. Actual or prospective local economic actors (investors, developers, manufacturers, service providers, off-takers ) should be pro-actively supported in correctly identifying and capturing market niches. Market segments which exhibit comparatively low entry barriers and offer over-average job effects should be specifically focused Tried-and-tested instruments from other policy fields, like PSD, local supplier development & business linkage programs, can be used for it 12/03/2025 Page 12 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Support Instruments and Business Development 2 Good support instruments incentivize RE/EE investments in a non- discriminatory and cost-effective way. They strike a balance between both demand and supply support. They target key market failures (awareness, externalities/freeriding, coordination problems) and those groups with the greatest potential. They help businesses to become competitive and deliver quality. They limit rents in time/scope and base them on performance. 12/03/2025 Page 13 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Support Instruments and Business Development 3 Available tools for demand and supply support: from GIZ: EQUIP, PRODUSE; from others: CLIFIT, AILEG Good practice options for effective support instruments: Large-scale revolving financial support mechanisms: fossil taxes in India and Mexico; utility levies in Brazil and Mexico; electricity consumption surcharges and carbon trading schemes in China Very heterogeneous financial sector involvement: prominent role for public banks in Brazil and China: commercial banks in lead position in South Africa and Turkey Capacity auctions with local content premiums in Brazil, South Africa, Morocco; RE FiTs with local content premiums in Turkey, Egypt 12/03/2025 Page 14 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Capacity Development and Skill Building 1 The larger the share and the greater the role of local actors, the more important become the notions of performance and quality and the need for the state to pro-actively support and secure them. Skill and capacity building at both individual and institutional levels are particularly crucial: performance gaps need to be overcome, and quality issues need to be resolved, so that the necessary longevity and profitability of the installations can be guaranteed. A clear priority should thus be given to human capital development: this should include encouraging cooperation between education and business at both academic and TVET levels, enhancing applied research and TVET+LLL, while always considering the informal sector. 12/03/2025 Page 15 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Capacity Development and Skill Building 2 Employment-enhancing HCD policies foster a sufficiently large local work-force with the right skill sets. Their focus, scope and sequencing is in phase with the expected market development in different areas. The private sector is closely associated. Standards used are transparent, consistent, labor market-oriented They are effectively enforced and regularly updated. 12/03/2025 Page 16 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Capacity Development and Skill Building 3 Good practice options for skill building policies: China: ILO-based skill needs assessment for RE/EE employment China, Turkey: integration into existing university & research programs as well as the normal vocational training system South Africa, India, Brazil: creation of RE/EE specific training institutions & programs to rapidly build up the necessary skills 12/03/2025 Page 17 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Inclusion and Coordination 1 The successful implementation of RE/EE strategies and policies needs cooperation from a broad range of actors, even more so if they aim to maximize the socio-economic co-benefits of these technologies. A substantive consensus should be reached on the direction of the process, the main outcomes/milestones, as well as sharing of tasks. Concerns must be taken seriously, checks and balances (and arbiters) are introduced), and both the substance and the implementation of the process should be open to evaluation and amendment. The readiness to engage depends on the reliability of the framework, the awareness of opportunities, the possibility to mobilize resources, and the feeling to have a stake and a says in the process . 12/03/2025 Page 18 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Inclusion and Coordination 2 Successful stakeholder inclusion and coordination policies allow for a targeted and customized broadening of the social support base: They correctly identify the most concerned/relevant stakeholders and assign clear responsibilities (+necessary means) to different actors for defined areas (esp. for planning/permitting, financing, and training). They provide for appropriate horizontal and vertical coordination mechanisms (among different govt. departments and across different govt. levels) with a stake in RE/EE and its socio-economic benefits. They allow for appropriate coordination mechanisms with other concerned state and non-state actors (utilities, SOEs, parliaments, business representatives, civil society, consumer protection bodies)? 12/03/2025 Page 19 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Inclusion and Coordination 3 Good practice options for stakeholder inclusion & coordination: China, India: horizontal and vertical policy coordination through energy and climate change coordination bodies Brazil, South Africa: effective participation of civil society and business in energy and climate policy through public consultations; close public- private collaboration especially in the RE training sector Turkey: effective centralization and coordination of energy and climate policy making at the highest level of national government 12/03/2025 Page 20 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Conclusions 1 Employment effects of RE/EE applications vary strongly: - Depending on the technology and the size of the project - Differing in terms of the duration and the location of the effect - Differing in terms of the kind of inputs and the level of skills required - Distributed over time and along the supply chain in different sectors - Varying significantly between countries, especially between OECD & emerging economies / developing countries - Need to distinguish direct, indirect and net (induced) effects 12/03/2025 Page 21 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Conclusions 2 Successful countries share certain features: They develop strategic approaches to their RE/EE goals, based on an assessment of their status quo and future potentials They mobilize state and non-state actors and stakeholders They implement policies to develop markets and create jobs They invest in HR development and capacity building to accompany the development of markets & employment Enabling a co-evolution of policies, markets and technological capacities with benefits for employment and local value creation 12/03/2025 Page 22 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Conclusions 3 Even successful countries still lack certain elements: The availability and quality of data linked to production, turnover, employment etc. in RE/EE sector, although it is key for sound strategy development and policy implementation. The provision of rigorous quality management and quality assurance through public authorities or economic intermediaries, focusing specifically on small-scale installations. The availability of financial and technical support mechanisms targeted at private households and small-scale businesses, helping them to start up/access the new markets. 12/03/2025 Page 23 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

and last but not least Local value and employment through RE/EE is not the end result of a unilinear process, it is part of a cycle that can turn virtuous or vicious: A high share of local participation is needed to secure the necessary socio-political support, ensure private sector participation and investment, and allow for the development of the necessary skills and capacities to deliver quality and ensure the security and affordability of supply (plus curb demand growth and boost energy productivity). A marginalization of local actors is incompatible with the notion of sustainability: it undermines the credibility of policy, drives up the costs of deployment, and endangers the security of the system. 12/03/2025 Page 24 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Backup Slides 12/03/2025 Page 25 IRENA GIZ RCREEE Workshop on Socio-Economic Benefits of Renewable Energy

Annual Net Additions of RE Capacity Worldwide 12/03/2025 Page 26 Source: IRENA

RE Employment Worldwide by Technology (in 1000s) 12/03/2025 Page 27 Source: IRENA

RE Employment Worldwide in Leading Countries (in 1000s) 12/03/2025 Page 28 Source: IRENA

RE Employment Factors by Technology and Project Phase 12/03/2025 Page 29 Source: Cameron & Van der Zwann

RE Employment Factors by Technology and Project Phase 12/03/2025 Page 30 Source: Cameron & Van der Zwann