Ayman Shehata PwC CSR Strategy Manager Socioeconomic Impacts of Renewable Energy EGX 2015

Introduction This presentation tries to bridge the gap between Renewable Energy as an environmental and economic tool and as a societal and community tool Socio-economic impacts of Renewable Energy How RE can be used as a tool for rural development How RE can be used as a tool for rural development and community empowerment “how” the implementation process can lead to much wider societal impact through Community-owned Renewable Energy projects

PwC Socioeconomic effects of renewable energy : Macroeconomic effects Value added GDP Employment Welfare

Socioeconomic effects of renewable energy: The employment opportunities for value creation along the segments of RE value chain “From a sustainable development perspective, the term value creation goes beyond the traditional economic definition, to include a vast array of socio-economic benefits to society. These include job creation, improved health and education, reduced poverty and reduced negative environmental impacts (IRENA, 2045).” Worldwide, there were about 6.5 million direct and indirect jobs in the renewable energy sector in 2013, of which more than 3.1 million were related to solar PV, CSP and wind technologies

segments of RE value chain Socio-economic effects can be traced along the different segments of the value chain, including project planning; Manufacturing, grid connection, Operation and maintenance, Decommissioning. Further opportunities for value creation exist in the supporting processes such as policy- making, financial services, education, research and development and consulting in the fields related to Renewable Energy

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PwC Policy Insights Depending on the maturity of a country’s renewable energy sector, more or less value may be created domestically. Accordingly, a broad range of cross-cutting policy instruments may influence value creation from the deployment of large-scale solar and wind energy. These policies can stimulate deployment and aim at building a domestic industry by encouraging investment and technology transfer, strengthening firm-level capabilities, promoting education and training, as well as research and innovation.

PwC Policy Insights Maximizing value creation requires a long process of researching the different tradeoffs between the different policies and their impacts along with their interrelated causality in order to reach the right policy mix, which is crosscutting and tailored to country-specific conditions

PwC Welfare The measure of GDP can be complemented with various welfare-related indicators developed to quantify economic performance. These indicators range from the concept of welfare in conventional economics to alternative measures of well-being, such as the Human Development Index “In conventional economics, welfare is an indicator of material economic well-being, measured as an aggregation of the utility that consumption or other activities/goods/services (for example, leisure) provide to a group of people It is used in economic modelling and analysis to assess the changes in well- being of a society, which are not necessarily reflected in other variables such as GDP

PwC Wellbeing Renewable energy deployment can affect many such indicators of well- being. Possibly the most important dimensions are environmental and health-related. For example, power generation and road transport are two of the main sources of air pollution. Subjective wellbeing is influenced by the quality of the local environment, which also affects environmental health. Plenty of environmental policy instruments try to internalize a the pollution harmful externalities on the welfare state through an estimate equivalent cost.

PwC Sustainability& the Poor “In March 2014, the WHO reported that 7 million premature deaths annually are linked to air pollution; by comparison, the AIDS pandemic killed 2.3 million people globally in 2005, its worst year”(WHO, 2014). Research shows that is the poor who bear most of the ill-health and other costs of environmental problems. Their houses and neighborhoods are the worst served with water, sanitation, garbage collection, paved roads and drains. It is almost always the poorer groups who live in the places where the pollution levels are worst poorer groups often choose such places because these are the only locations where they can find affordable land for their housing close to sources of employment

PwC Community Ownership and Community Power “Community ownership” covers RET projects that are completely in the hands of a community, and those that are only partially community owned (“co-ownership”). Different legal and financial models of community ownership include co-operatives, community charities, development trusts and shares owned by a local community organization

PwC “A project can be defined as Community Power if at least two of the following three criteria are fulfilled: 1. Local stakeholders own the majority or all of a project 2. Voting control rests with the community-based organization 3. The majority of social and economic benefits are distributed locally”.

PwC CRE projects as those which do the following: Decarbonize – Use renewable energy and other low carbon technologies (the environmental dimension); Decentralize and localize energy supply (the technical dimension); and Democratize energy governance through community ownership and/or participation (the socio-political dimension)