Goal 7: Ensure access to affordable, reliable, sustainable and modern energy for all

Goal 7 targets energy access, energy efficiency and sustainability. Individual MSMEs generally have low environmental footprints mostly due to their lack of size. Due to the number of MSMEs in the economy, though, their combined contribution to energy demand is large. MSMEs may produce more pollution than big businesses because of their informal nature and the resulting lack of regulations and supervision.44 Studies have estimated that these businesses can contribute up to 60-70 per cent of pollution levels in developing economies.45 Encouraging MSMEs to adopt green technology and other environmentally-friendly strategies are therefore essential to achieving Goal 7. A study in India showed that an estimated 26 million MSME enterprises account for about 45 per cent of India’s industrial production and 40 per cent of exports; out of 400 manufacturing clusters, nearly half comprise energy intensive sectors (metallurgy ceramics, glass, textiles, etc.).46 According to the study, a majority of the MSME clusters use conventional and inefficient technologies. The total energy saving potential of MSMEs in 36 clusters was identified as about 16 per cent of their total energy consumption. Uptake of energy efficiency measures remains low and is attributable to non-availability of technologies, lack of local service providers, poor technical capacities of MSMEs, and limited access to credit. Box 2 introduces an MSME providing an innovative model for rolling out renewable energy infrastructure in India.

Box 2. Simpa Networks in India

Simpa Networks provides a basic, portable solar home system in an off-grid utilities model to primarily rural customers in India through a lease-to-own model. The system includes a low-cost meter connected to a cloud-based software that enables Simpa to track customer usage. Customers make an initial down payment for the installation and then select how much energy credit to purchase. A portion of this payment covers the repayment cost of the system, while the rest goes to Simpa as profit and to cover operational costs. Once fully paid (typically within two to three years), the system unlocks permanently and continues to produce electricity for the customer for free. Simpa has installed over 15,000 solar home systems in India and is rapidly growing.

Source: http://www.simpaenergy.in

Policy measures to support Goal 7:

  • Establishing energy efficiency certifications and education for MSMEs to reduce energy emissions.
  • Reducing the use of polluting transport by MSMEs employees, such as cars and planes, by prioritizing telecommunications and low-energy modes of transport.
  • Investment in local infrastructure to ensure that MSMEs, particularly in underserved and rural areas, can access sustainable energy rather than unsustainable and inefficient traditional fuel sources.
  • Supporting MSME investment in R&D related to sustainable energy services to accelerate the energy transition.
  • Ensure that government programmes to incentivize green initiatives and renewable energy are applicable to MSMEs that would take advantage of them, and not unduly limited to only non-commercial participants, or alternatively, only large commercial participants.

44 Asia Pacific Economic Cooperation (APEC) Policy Support Unit (2018). Identifying Green, Sustainable and Innovative MSMEs in APEC. Policy Brief No.19.

45 Ibid.

46 Agence Française de Développement (AFD), Bureau of Energy Efficiency (BEE) French Environment & Energy Management Agency (ADEME) and The Energy and Resources Institute (TERI) (undated). Benchmarking and Mapping Indian MSMEs Energy Consumption.