Key Takeaways
- The clean energy transition risks repeating extractive patterns from Global South to the North.
- Only ~15% of global clean-energy investment reaches emerging markets.
- Without local ownership and value capture, benefits flow outward.
- Community-led, transparent models can prevent a new “green land-grab.”
- Tracking investment, value retention, and land use ensures a just transition.
As decentralised energy networks, tokenised electricity markets, and clean energy DePIN models accelerate, the world faces a hidden paradox: the clean-energy transition could unintentionally recreate the same extractive patterns it seeks to replace. Without local ownership, equitable governance, and transparent value capture, the promise of renewables risks turning into a new form of “green colonialism.”
The clean-energy transition is often framed as universally beneficial, more renewables, less carbon, and wider access. Yet in parts of the Global South, this narrative hides a troubling truth. What appears as sustainable development may in fact mirror older colonial structures. The concept of energy colonialism has gained traction among scholars to describe how renewable mega-projects, mineral extraction, and investment flows can replicate the dispossession of the past under the banner of progress.
As hundreds of billions flow into renewable infrastructure, storage, and smart grids, the central question becomes clear:
Can emerging markets avoid a green land-grab and how can decentralised energy governance ensure that?
Why the Risk Is Real
- Resource endowment, limited value capture The Global South holds roughly 70% of the world’s transition-mineral reserves yet captures a small share of profits. According to Oxfam, in 2024, Latin America secured just 3% of global clean-energy investment, while Southeast Asia, the Middle East, and Africa each attracted only about 2%.
- Investment imbalances The IEA reports that of the USD 2 trillion committed to clean energy globally, only around 15% reached emerging markets outside China — a pattern reinforcing dependency rather than resilience.
- Land, territory and socio-ecological costs Large-scale wind, solar, and transmission projects require extensive land. Studies show these developments often lead to dispossession, displacement, and loss of community-managed commons, core dimensions of energy colonialism.
These numbers reveal a paradox: the language of sustainability often hides extractive geography, the same asymmetry of value capture, only this time under a “green” banner.
How Clean Energy Can Replicate Extractive Models
- Commodification of land and resource flows Renewable mega-projects often operate at scale, sited where land is cheap, regulation weak and grid infrastructure minimal – conditions reminiscent of fossil-era extraction. This pattern leads to local land rights being sidelined, community input ignored, and value siphoned off rather than retained locally.
- Ownership, governance and benefit captureWhen project ownership resides in foreign or non-local entities, host communities may provide land, labour or resources, but capture little of the upside. This dynamic perpetuates inequality: one study found that though a Sub-Saharan African country may own the resource, the majority of profits and high-value activities are exported to external entities.
- Infrastructure oriented to external demand Projects may be developed not for local energy access or grid stability, but for export, corporate off-take or remote markets. As one analysis argues: the “corporate energy transition” can serve external consumption rather than local needs.
- Labour and industrialisation gapsWhile the clean-energy economy promises jobs, the reality in many Global South countries is that the jobs are fewer and lower skilled compared to those in manufacturing hubs. For example, a study concluded less than 1% of workers in transitioning fossil sectors moved into clean-jobs in some regions.
What can be Done Differently
- Local ownership and community-centric modelsShifting from “installed by outsiders” to “owned and managed locally” is key. Community-owned micro-grids, cooperative solar farms, and local value-chain participation help align the benefits with local stakeholders.
- Value-chain integration and local industrialisation Rather than simply exporting raw minerals or siting panels, host countries should integrate local manufacturing, downstream services and local talent development – retaining a greater share of value.
- Just transition frameworks and land rights protection Robust governance around land-use, free prior informed consent (FPIC), benefit-sharing, and transparency mechanisms can guard against dispossession. The six-dimension framework of energy colonialism (geopolitical, financial, land grabbing, territory impacts, power/decision-making, resistance) provides a useful diagnostic.
- Reorient to local demand and grid integrationInstead of routing most value to export markets or corporate offtake, prioritising local electrification, grid resilience and decentralised architectures creates stronger alignment with development outcomes.
- Transparent investment flows and accountability With billions flowing into clean energy, stakeholders must insist on clarity of underlying ownership, local benefit capture, and community outcomes. Multi-stakeholder frameworks aligned to the SDGs can help.
Metrics to watch
- Share of clean-energy investment directed to Global South (currently ~15 % of global clean investment outside China). IEA+1
- Percentage of transition-minerals value retained locally vs exported (e.g., Latin America holds nearly half of world’s lithium but captures around 10 % of value).
- Proportion of large renewables/projects designated for local consumption rather than export-of-take contracts.
- Local jobs created in manufacturing, installation and maintenance per USD-1 m invested in clean energy projects.
- Land-footprint metrics: hectares per MW for solar/wind in host countries.
Conclusion
The transition to decentralised energy isn’t automatically just, it’s a choice. Unless ownership, governance, and benefit-sharing are deliberately structured to empower local stakeholders, we risk repeating colonial-era extraction under a green facade.
Building inclusive, locally governed renewable infrastructure ensures that every kilowatt generated also generates community wealth, not just corporate returns.
Let’s design a future where power is owned as well as produced and where the energy transition finally breaks, not rebuilds, extractive systems.
FAQs
Energy colonialism refers to the phenomenon where renewable-energy deployment replicates colonial-era patterns: large-scale infrastructure in peripheral regions where local communities have limited ownership, decision-making and benefit-capture.
Because many clean-energy projects are sited in regions with abundant land and minerals but weaker regulatory or ownership frameworks – making them vulnerable to external capture of value and local dispossession.
Investment is necessary but not sufficient. If investment lacks local ownership, value-chain integration or alignment with local demand, it can perpetuate dependency and extractive dynamics
Communities can take part as owners, stakeholders, co-developers, and governance participants. Models such as energy co-operatives, community shares and micro-grids can empower local benefit-capture.
By designing investment models that embed local ownership, transparent governance, value-chain participation and alignment with local electrification/demand objectives – thus shifting from extractive to inclusive infrastructure.
