Energy transition in a developing economy: Challenges, prospects and policy considerations

Abstract

Energy transition as a process of decarbonizing energy systems is considered a key mitigation strategy in the global effort to curb rising temperatures stemming from greenhouse gases. The main challenge with the energy transition process has to do with the social, economic, political and technological capacities of a country to undertake this transition process for which developing countries globally are lagging behind. The purpose of this study is the present a policy discussion paper looking at the pertinent social, economic and institutional challenges that developing countries need to consider in its energy transition process. As a case study, the paper also looked at the economy of Guyana, a country that is experiencing an oil and gas boom and also has committed to developing a low carbon development strategy. The paper implemented a narrative literature review and constructed the case study for Guyana utilizing secondary information on policy positions and directives for the energy sector in Guyana. Several pertinent issues within developing countries were identified including centralized and state dominated markets, poor infrastructure to support the transition process, availability of technology, energy justice and energy bullying and a lack of policies that foster community energy systems, energy sensitization and energy investments. These issues also reverberated with Guyana with policy recommendations emphasizing on collective actions needed to address the policy needs of developing countries in their transition process. The issues identified within the policy discussion of this paper can be used by policy makers globally as a potential framework for identifying the research gaps and priority areas to channel resources and technical skills to enhance the energy transition process in developing countries.