Leveraging Employment Potential of Renewable Energy in MENA Region
The MENA region faces high unemployment rates, necessitating the creation of millions of new jobs annually. Sustainable energy technologies can play a vital role in job creation, but empirical data shows a significant gap between forecasts and actual job creation in renewable energy and energy efficiency sectors.
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LEVERAGING THE EMPLOYMENT POTENTIAL OF RENEWABLE ENERGY AND ENERGY EFFICIENCY FOR THE MENA REGION: HIGH HOPES, UNCERTAIN OUTCOMES Dr. Steffen Erdle, Head of Project RE-ACTIVATE: Promoting Employment through RE/EE in MENA In-House Expert Workshop: Optimizing Local Employment & Value Creation of Renewable Energy & Energy Efficiency Technologies Eschborn, 14.10.14 Page 1
Why does the subject matter? MENA: macro region with the highest unemployment rate worldwide Direct backward-forward linkages with recent socio-political unrest Need for Arab countries to generate 4-5 million new jobs annually just to maintain the status quo of regional unemployment Promoting social inclusion and specifically youth employment has become a key priority of public policy in the region Sustainable energy technologies attributed a major role: serving as key driver and catalyst for new jobs and value creation 11/03/2025 Page 2 Expert Dialog: Fostering employment: Innovative approaches for the MENA Region
Where is actually the problem? Most available figures concerning the employment potential of RE/EE in MENA are (more or less realistic) forecasts and hypotheses; many of them are very optimistic and/or highly politicized The actual availability of empirical data is very weak: very few robust and systematic data collection and assessment activities appear to have been carried out by either public or private bodies The available evidence to date suggests that the actual number of jobs created by RE/EE in MENA is lagging far behind the official targets and forecasts, and is far below its job creation potentials and needs 11/03/2025 Page 3 Expert Dialog: Fostering employment: Innovative approaches for the MENA Region
How can we explain this gap? Incipient character of sustainable energy markets in most countries; installed RE capacity less than 1% of total capacity (with hydro 6%) Emerging/still incomplete frameworks in legal-regulatory/institutional terms; many elements still need to be put into place and effect Few clear and sound arrangements to incentivize investments; high state subsidies for fossil fuels are still a major impediment for RE/EE RE/EE investments in MENA still in the build-up phase and so far concentrated in some large projects mainly driven by foreign money Most RE/EE companies in MENA are still few and small and not prepared to gain a significant foothold in these large projects 11/03/2025 Page 4 Expert Dialog: Fostering employment: Innovative approaches for the MENA Region
What are the root causes to be addressed? Sometimes unfortunate choice of objectives and priorities, exacerbated by an insufficient alignment of activities and resources Priorization of generation over conservation, although energy efficiency measures have a higher labor intensity and larger employment effects Focus on centralized, large-scale approaches although decentralized approaches offer greater benefit-sharing and local ecosoc effects Emphasis on local manufacturing / industrial development, despite a larger job creation potential of the up- & downstream services sector Insufficient preparation of local workers and suppliers for these new markets and business opportunities: skills & quality are paramount 11/03/2025 Page 5 Expert Dialog: Fostering employment: Innovative approaches for the MENA Region
Which conclusions can we draw from this? Prioritize energy efficiency: esp. construction sector (new builds, retrofits), industry/commerce (quick wins with lighting and cooling) Promote distributed generation (in conjunction with the former): roof-top PV, SWHs, small wind, solar pumps, micro-grids Promote human capacity building: encourage cooperation between education and private sector at academic and TVET levels, enhance applied research, strengthen TVET+LLL, consider informal sector Key: analyze strengths and potentials, create inter-sectoral synergies and cross-fertilizations, align sector policies and state interventions Reach out for the low-hanging fruits, and make sure you reach for the same ones: you will not only save money, but also reap jobs! 11/03/2025 Page 6 Expert Dialog: Fostering employment: Innovative approaches for the MENA Region
Technology in SEMC available (local; potentially local; to be imported) CO2 Technology complexity (h; m; l) Employment potential (h; m; l) abatement potential per invested (l, m, h) Hassle factor/ barriers 3 is good, 1 is bad 1 Job pro 5.000 invested: 1.32 Mio jobs per 132 bn invested in 20 years Insulation of new buildings 3 3 3 3 1 Thermal renovation of buildings 1 job pro 4.900 invested: 500 000 jobs per 49 bn invested in 20 years 3 3 3 3 1 1 job pro 15.000 invested: 10 000 jobs per 3 bn invested in 20 years 3 2 1 2 3 Efficient lighting 2 2 2 2 1 Efficient H&C 40 bn invested in 20 years - Job creation is possibly concentrated on installation and maintenance 2 2 2 2 3 Appliances 1 job pro 20.000 invested: 95 000 jobs per 38 bn invested in 20 years Solar water heaters 2 3 1 2 2 11/03/2025 Page 7 Type presentation title here
Scenario#2 10.1 Mtoe savings by 2020 Building Envelope (Retrofit Residential) Roof-top PV (Residential) Roof-top PV (Tertiary) Building Envelope (New - Residential) Air-conditioners (Residential) Refrigerators (Residential) Domestic Solar Water Heaters Lighting (tertiary) Public Street Lighting Lighting (Residential) 11/03/2025 Page 8 Type presentation title here
