Ambitions for increasing renewable energy integration must translate into implementation on the ground, and stakeholders such as the private sector are crucial in this endeavor. This was one of the perspectives shared, among many more, when the Climate Investment Funds (CIF) brought together a range of experts for “Unlocking Opportunities for Private Sector Participation in Renewable Energy Integration” focused on how the private sector can support country-level programs on renewable energy integration.
In opening the discussion, Joseph Mouanda, the Chief Evaluation Officer at Independent Development Evaluation (IDEV) of the African Development Bank Group (AfDB) outlined several lessons from a recent evaluation of the AfDB’s financing for renewable energy integration projects. Key among these was the importance of bridging the gap between the high-level vision for renewable energy integration and how projects are implemented on the ground. He said that while the strategic intent may be clear, the lack of concrete action plans can hinder the deployment of renewable energy solutions and interest from private investors.
As he noted, “To attract private sector investment to renewable energy in emerging markets, investors need predictability and clarity when it comes to procurement … Having an action plan empowers stakeholders by giving them specific tasks and responsibilities as well as a concrete roadmap to follow, thus encouraging greater commitment and participation.”
The private sector does more than just provide much-needed capital or opportunities for public-private partnerships (PPPs), says Caroline Otonglo, Senior Infrastructure Finance Specialist at the World Bank. While the World Bank marshals more financing through capital markets, she sees an even bigger opportunity to mobilize even more through attracting private investment.
“I would like to encourage the audience to move away from this thinking about PPP [public-private partnerships] because, remember, there is a whole continuum of opportunities for the private sector to participate with the government”, she said. “Also, just to bear in mind: the private sector brings more than just capital. The private sector also brings expertise, operational discipline, and other benefits.”
Lori Bird, Director of US Energy and Polsky Chair for Renewable Energy at the World Resources Institute noted that policy at government level is critical to facilitating private investment in public RE integration infrastructure. She identified five key actions to help facilitate grid integration, ranging from planning to new technology that could accelerate private sector participation. “[These] are some of the key roles and types of actions that are really needed, along with bringing projects online,” she explained. See her list in the image below:
Ending the round of presentations, Barbara O’Neill, Grid Integration Manager for the U.S. Department of Energy’s National Renewable Energy Laboratory, took a deep dive into some of the longer-term challenges countries face in managing and sustaining RE integration with existing grids. Drawing on examples from the United States, Brazil, and Australia, she explained that a key challenge to sustainable renewable energy integration management is managing the supply and demand of the clean energy generated, and where it can be stored for later use.
As she noted: “There are two pieces to the equation—supply and demand. You either move your supply or your demand. And I think this is basic but people [tend to] jump to solutions that don’t consider all the levers you have to make your system work with the clean resources that you have.”
The overriding message from these discussions is that integrating clean energy into existing power grids relies on harmonizing an array of processes, whether in policy planning, infrastructure investment, or technical capacity development. And while solutions may differ depending on a country's approach or context, a common factor, and actor, is the private sector and its critical role in unlocking opportunities in renewable energy integration.
This event forms part of CIF’s Renewable Integration Program Learning Platform, launched in June 2023 to facilitate the sharing of emerging knowledge among countries looking to accelerate renewable energy integration. For more information on the program or the learning platform, contact Jimmy Pannett.
Watch a recording of this session: