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Monday, Apr 25, 2005

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Call to promote entrepreneurship in renewable energy sector

G.K. Nair

Kochi , April 24

A TURNAROUND in policy in favour of renewable energy (RE) as a tool for enterprise development' rather than as an end in itself is essential , according to experts who are participating in the International Workshop on Energy related Businesses in Asia here .

Renewable energy policy in most Asian countries, has undergone a qualitative change during the past two decades. However, the end use efficiency of the RE products and services depends upon providing the necessary linkages which are helpful to provide a complete value chain of products and services, Dr J.M.I. Sait and Dr P.M. Mathew, Director, Institute of Small Enterprises and Development (ISED), which is hosting the workshop, told Business Line.

They said that RE programmes of today needed a shift in emphasis in the Asian countries. This shift should take place by presenting the RE sector as one of new opportunities, rather than as a solution for energy and environment related issues. This involves a more integrated approach.

According to them the message emerged from recent studies in South Asian countries was that "the track of renewable energy development we are used to need a `U' turn, especially for addressing the new challenges under globalisation. Unleashing renewable energy entrepreneurship rather than promoting renewable energy per se holds the key for sustainable development of this sub-sector".

The field studies show that inadequate understanding of the usefulness of the public programmes for renewable energy development, and the role and relevance of public agencies executing the programmes has slowed down enterprise development in RE.

It is important to note that, programmes, which have targeted the masses, such as, the biogas programme of the KVIC, have attracted the attention of a much larger number of respondents. A similar experience is reflected in the responses relating to local economic development as well.

Panchayati raj in India, and especially in some States like Kerala, has opened up enormous opportunities of making use of local resources and peoples' initiatives for enterprise development.

"While the majority of the respondents were too critical of the existing programmes for enterprise development and employment generation, they were unclear about alternative strategies for local economic development," they pointed out. This lack of clarity pervades the negative entrepreneurial responses relating to collective initiatives on the renewable energy front.

The process of globalisation, which got intensified in the 1990s, however, implied some major changes, which were largely out of compulsion. Policies influenced through aid and trade became increasingly unsustainable.

The subsidy schemes relating to renewable energy became unsustainable and illogical in a context of a rule-based trade regime. The various promotional agencies, failed to justify the prevailing renewable energy policies, based on such rationality, they said.

Energy use is a subject close to the cultural ethos of local communities. It is something more than mere economic rationality, which guides energy behaviour of people. Therefore, the sustainability of the energy sector as a whole, and a sub-sector such as renewable energy, needs to be examined in terms of the aspirations of local economic development. While, most of the development programmes targeting the poorer sections of the community today, have almost common strategies, such as community organisation, technical skill up-gradation, community channels of credit etc, there are also several missing links, which are often difficult to identify and act upon.

The constraints are often systemic rather than individual-oriented, and therefore, corrective strategies focused on individuals per se, are not likely to yield significant results in the long run.

In many developing countries both the public and private sectors are equally inefficient or the prevailing policy regime does not permit them to come out of this inefficiency syndrome. Hence, the experience of public-private partnership has not proved to be significantly rewarding.

The evolution of public policy in South Asian countries show that while a number of entrepreneurs were attracted into the renewable energy sector as manufacturers, assemblers or as providers of solutions through various government programmes, their activities have not been properly tuned to a sustainable policy environment.

A crucial problem faced by most Asian countries is a wide gulf between knowledge relating to renewable energy, attitude towards its adoption, and adoption per se.

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