The death of coal: World Bank kicking coal habit but will the world follow?

Still on a semi-sabbatical, however this article is worth noting from The Conversation:

By Colin Hunt

World Bank president Jim Yong Kim recently announced that the Bank would cut coal from its portfolio of investment projects.

New coal powered generation will now receive financial support only in “rare circumstances”. Gas will remain in the Bank’s investment mix but as a transitional fuel. But will this decision change anything?

The World Bank has led international development banks in its embrace of coal over the last five years, according to Oil Change International. The overall portfolios of the major development banks as well as the European Investment Bank and the European Bank for Reconstruction and Development, have been heavily weighted towards fossil fuel development rather than renewables.

The World Bank’s change in focus favouring renewable energy won’t have a great impact on the spending priorities in the near future because its last loan to a coal-fired plant was in 2010. Much larger will be the impact on other lending institutions. A reasonable expectation is that the decision to spurn coal will also permeate the domestic policies of countries continuing to build coal-fired power plants.

The new president Dr Kim has managed to get the no coal policy through the Bank’s board. In the past the strategy has been blocked by China, India, and Saudi Arabia.

Civil society has been pressing for change. No doubt the bank’s board was also influenced by the late 2012 report it commissioned from the Potsdam Institute. This describes what the world would be like if it warmed by 4°C – an almost unanimous prediction by scientists by the end of the century without serious policy changes: “The lack of action on climate change not only risks putting prosperity out of reach of millions of people in the developing world, it threatens to roll back decades of sustainable development.”

Nighttime from space. Only about 30% of households in Sub-Sahara Africa and northern India have electricity and outages are frequent. However solar power is changing that. NOAA

The International Energy Agency might also have been influential in the Bank’s change. The agency is emphasising the need to keep most coal in the ground to avoid catastrophic warming.

Electricity for developing nations

Lack of electricity is the major barrier to global poverty alleviation and the development of private enterprise. The marriage of the Bank’s focus on the poor with the delivery of cost-effective sustainable energy systems is now much more feasible.

While electricity grids are absent in remote areas, off-grid renewable energy systems are now bankable. The cost of solar power in particular has plummeted. The Bank gives the example of the cost of photovoltaic modules falling from US$3.40 per watt in 2008 to US$1.30 in 2011.

The three goals of the World Bank by 2030 are:

  • universal access to electricity
  • double the rate of improvement in energy efficiency
  • double the rate of uptake of renewable energy.

The Bank’s annual present rate of investment in these goals is US$8 billion. This compares with the required annual investment rate for achieving these goals of $US600-800 billion – a doubling or tripling of present total financial flows. However the institution’s role is much greater than indicated by its scale of direct lending.

The Bank also leverages other lenders into the mix and fosters private-public partnerships. It advises electricity utilities on how to apply and raise finance. And it provides advice on reducing fossil fuel subsidies (which put government budgets in the red and deter investment in renewables) and on how tariffs can be set to be economically sustainable and manage demand. Raising awareness of energy efficiency – the least sexy and most under-exploited of initiatives – is also key.

A concentrating solar thermal project at Ouarzazate, a city of 1.5 million in Morocco, will provide 24-hour power. World Bank

The daunting challenges facing developing countries in integrating renewables into the energy mix will be appreciated by Australians who have been following the exciting efforts to pave the way for 100% renewables in this country, such as this report by the Australian Energy Market Operator, and this by the Global Change Institute at University of Queensland.

There are a number of ways in which renewables can contribute to a reliable electricity supply: concentrating solar, geothermal, biomass and hydro. The latter is a key in that is can be readily switched on or off to fill the troughs in supply or the peaks in demand; a reason why investment in hydro power is thought important in developing countries that have untapped water resources. While the social and environmental impacts of large water storages have been well documented, the Bank says it has learned many lessons from past experience.

Many countries do not need development banks to fund their energy investments and some are still investing heavily in coal-fired plants. China is an example. While massive investment in energy efficiency has halved power per unit of GDP in 17 years, the demand for coal will increase. This is due to the idiosyncrasies of the country’s electricity network together with a tripling of demand for energy by 2030.

It is easy to fall into pessimism about the chances of timely transformation of world energy supplies. But the policy shift by the World Bank is another domino fallen. Greater appreciation of the risks of climate inaction, the successful application of renewables, combined with global knowledge transfer, will surely see many more dominoes go down in the near future.

Colin Hunt does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

This article was originally published at The Conversation.
Read the original article.

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13 thoughts on “The death of coal: World Bank kicking coal habit but will the world follow?

  1. Goldman Sachs think the good times for coal may be permanently over:

    Goldman Sachs states that demand for coal in power generation will be gradually eroded due to three global trends:

    1. Environmental regulations that discourage investment in coal-fired power plants in OECD countries, and to a lesser degree in non-OECD countries as well.

    2. Strong competition from gas and renewable energy, partly driven by the shale gas revolution on the one hand (with other regions poised to emulate the success of US producers) and the maturing of wind and solar technology on the other hand (for instance in China, Europe and the US).

    3. Improvements in energy efficiency at the macro level (e.g. lower electricity demand per unit of GDP) and in the power sector (e.g. lower coal burn per unit of electricity).

    http://www.businessspectator.com.au/article/2013/7/31/energy-markets/coals-crippling-demand-roadblock

  2. john byatt says:

    Climate code red

    Record heat: The Siberian Times reports that recent days have seen Siberia’s nickel capital hotter than Nice and on a par with Naples: “Norilsk – above the Arctic Circle – is known as one of the world’s coldest cites, and is built on permafrost. Norilsk has hit 32C in recent days with some forecasts predicting a blistering 35C by the weekend as the Arctic competes with the Mediterranean. The tundra turned hot as the Kransnoyarsk region industrial city – where foreigners are restricted from visiting – smashed records for heat established in 1979. The average temperature in July is 13.6 but the mercury was touching 32C, a long way from the coldest-ever recorded temperature of minus 61C. The previous hottest was 31.9C, more than three decades ago.” This follows a June heatwave which led numerous cities in Alaska to record their all-time hottest temperatures on record.

    Rapid acidification: The BBC reports that Arctic seas are being made rapidly more acidic by carbon dioxide emissions, according to scientists from the Arctic Monitoring and Assessment Programme. They say even if CO2 emissions stopped now, it would take tens of thousands of years for Arctic Ocean chemistry to revert to pre-industrial levels. Oceans are more acidic than they have been for at least 20 million years, and they are acidifying 10 times faster today than 55 million years ago when a mass extinction of marine species occurred. Previously it has been predicted 10% of the Arctic Ocean will be corrosively acidic by 2018, and 50% by 2050.

    Boreal forests: A new study, “Recent burning of boreal forests exceeds fire regime limits of the past 10,000 years”, finds that the region’s mighty boreal forests — stands of mighty spruce, fir, and larch trees that serve as the gateway to the Arctic Circle — have been burning at an unprecedented rate during the past few decades. The study, published Monday in the Proceedings of the National Academy of Sciences, found that the boreal forests have not burned at today’s high rates for at least the past 10,000 years, and climate change projections show even more wildfire activity may be to come. The study links the increase in fire activity to increased temperatures and drier conditions in the region, which is driving wholescale changes in the massive forests that encircle the northern portion of the globe.

    http://www.climatecodered.org/

    • john byatt says:

      Intro note: NASA’s James Hansen and colleagues Pushker Kharecha and Makiko Sato have a new paper, “Climate forcing growth rates: doubling down on our Faustian bargain,” in the current issue of Environmental Research Letters. They have also summarised their findings in an overview out today, and reproduced below. Main points include:
      Associated with human greenhouse gas production is the release of fine particle known as aerosols which have a temporary cooling effect (they last in the atmosphere less than a week).
      Aerosol cooling probably reduced global warming “by about half over the past century”. In the paper Hansen et al estimate the temporary cooling “aerosol forcing -1.6 ± 0.3 watts per sq. m.”. This is around 1.2 degrees Celsius. That is, without the aerosols associated with burning fossil fuels, the planetary would be more than a degree warmer!
      The amount is uncertain because global aerosols and their effect on clouds are not measured accurately. Overcoming this gap in knowledge is urgent.
      To prevent catastrophic global warming human greenhouse gas emission must cease, but this will also end the aerosol cooling effect and the full heating effect of our “Faustian bargain” will be revealed.

  3. Bill Jamison says:

    I think the death of coal has been greatly exaggerated. Between India and China more than 800 new plants are planned:

    More than 1,000 coal-fired power plants are being planned worldwide, new research has revealed.

    The huge planned expansion comes despite warnings from politicians, scientists and campaigners that the planet’s fast-rising carbon emissions must peak within a few years if runaway climate change is to be avoided and that fossil fuel assets risk becoming worthless if international action on global warming moves forward.

    Coal plants are the most polluting of all power stations and the World Resources Institute (WRI) identified 1,200 coal plants in planning across 59 countries, with about three-quarters in China and India. The capacity of the new plants add up to 1,400GW to global greenhouse gas emissions, the equivalent of adding another China – the world’s biggest emitter. India is planning 455 new plants compared to 363 in China, which is seeing a slowdown in its coal investments after a vast building programme in the past decade.

    http://www.guardian.co.uk/environment/2012/nov/20/coal-plants-world-resources-institute

    • john byatt says:

      It is obviously too hard for them to read the post

      THE DEATH OF COAL: WORLD BANK KICKING COAL HABIT BUT WILL THE WORLD FOLLOW?

  4. john byatt says:

    The WUWT denier confessions continue.

    sums it up really

    Mike H says:
    July 26, 2013 at 7:56 am
    Nicely written.
    My story begins having beers with a couple of buddies up at Whistler. I was skeptical, they weren’t. My skepticism was intuitive, not backed by solid studies. Essentially we all knew crap. I decided to truly learn about it. Financial post led me to Junk Science.com That led me to Lubos Motl’s excellent blog. Also made sure I went to Real Climate to read their side of things. They were so ridiculous, I gave up on them after about a year of consistent reading.

    • Isn’t it odd how often we read “AGW is just a religion”. Such fervour. Such conversions. It’s not quite as funny as The Book of Mormon, more tragic. Praise be to the First Church of Willard Tony!

  5. john byatt says:

    Warming of the tropics

    trees giving off more CO2 as the tropics warm up.

    http://www.pnas.org/content/early/2013/07/17/1219683110.abstract

  6. I think it’s more than possible for the World Bank to meet its goals through renewables funding along. There are more options on the table than ever before and for many developing countries alternative energy is the more economic choice.

  7. Hannah Bertram says:

    sorry clearly that wasn’t for you.

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