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COP26: Global climate summit ends in agreement for more action, less coal

COP26: Global climate summit ends in agreement for more action, less coal

Countries have gathered to negotiate the final details of a global bid to keep planetary warming under 1.5-2C. Olivia Wannan reports from Glasgow.

ANALYSIS: The world has agreed to ramp up climate action even further this decade, spend more on adaptation, and even for the first time, agree that (some) fossil fuels must go.

The two-week UN climate summit in Glasgow has ended in a joint compromise from nearly 200 countries, including on a number of outstanding sticky issues in the Paris Agreement “rulebook”. Developed countries have also acknowledged they have a legal and moral obligation to help vulnerable countries with the permanent loss and damage they are already suffering – though punted a solution to future meetings.

And a last-minute capitulation to phase down rather than phase out coal power cast a shadow over the Glasgow pact. In the end, the measure of success will depend on where history sets its benchmark.

If we use the lowest bar for success – whether there is more global climate action today than there was two weeks ago – then the 26th Conference of the Parties (or COP26) has achieved that.

The announcement that India had set a net-zero target was a pleasing development, even if the target date is 2070 and its short-term pledges remained unambitious. Indonesia’s and South Korea’s pledges to phase out coal-power was also good news. Canada and the US made large commitments to reduce fossil methane leaks (and, interestingly, agricultural emissions) and got nearly 100 other countries to sign up.

And while China declined to join the methane pledge, it did sign a deal with the US late in the second week, which included commitments to regulate methane leaks and limit deforestation.

 

Were governments ambitious enough?

If the point of success is 1.5 degrees Celsius, then the conference will not earn that accolade. Climate modellers have been tracking the plethora of commitments and coalitions launched during the meeting. Even on the basis that every single one will be met (a prospect many doubt), that path would hold warming to 1.8C. Scientists warn that the effects of climate change get vastly worse with even a fraction of a degree, so there is a lot of human suffering between 1.5C and 1.8C.

In addition, experts have also exposed the large gap between countries’ long-term goals and the short-term action they’re prepared to take.

Short-term goals are outlined in each country’s Nationally Determined Contribution (or NDC). These look out to 2030 – a point when carbon dioxide emissions would need to nearly halve, according to the world’s climate scientists, to keep 1.5C within reach. The path set by these and other pledges out to 2030 put the world on a path to 2.4C.

 

The host country, the UK, selected Alok Sharma to act as the president of the 26th Conference of the Parties (or COP26). JEFF J MITCHELL/GETTY IMAGES

 

With this in mind, countries that have not yet updated their NDC have been officially urged to submit tougher targets before COP27, to be held in Egypt. In fact, all countries are being requested to revisit their targets by the end of next year to ensure they align with 1.5C to 2C of warming (though this is caveated to take into account national circumstances).

It’s hoped big emitters such as China, Russia and Australia might then come to next year’s meeting with NDCs that could shift the global temperature dial even further still. Climate Change Minister James Shaw has already poured cold water on the idea of the New Zealand Government following this recommendation.

The onslaught of coalitions and alliances – on everything from methane and fossil fuel extraction to deforestation – announced during COP26 will supplement countries’ NDCs. There was plenty of criticism that these were voluntary, with no compliance. For example, if New Zealand fails to produce its intended methane savings of 10 per cent by 2030, the Global Methane Pledge won’t come after us in any way, beyond a public shaming.

But that’s a pattern set by the Paris Agreement itself. There are some seemingly mandatory features for the 197 countries signed up – such as reporting and deadlines for new targets. But even those aren’t well enforced: New Zealand missed the deadline to strengthen its NDC. We just scraped in before the start of COP26.

During a short speech on the final day, Shaw reflected on the shortcomings of the proposed agreement: “Is it enough to hold warming to 1.5C? I honestly can’t say that I think that it does. But we must never, ever give up,” he said.

“The text represents the least-worst outcome. The worst outcome would be to not agree [on] it, and keep talking through next year and deter action for yet another year.”

 

Countries in the naughty corner

Large greenhouse emitters China and Russia were called out for not showing up, literally and figuratively. Chinese president Xi Jinping and Russia president Vladimir Putin did not attend the leaders’ summit at the beginning of the talks, though negotiating teams for each country did attend to get the Paris Agreement “rulebook” and other outstanding matters settled.

 

Chinese president Xi Jinping did not attend COP26. He has not left China since the beginning of the pandemic (File photo) ANDY WONG/AP

 

By COP26, all 197 countries in the Paris Agreement were supposed to “ratchet” up their ambition. Russia updated its pledge last year, though it was deemed little better than its old one.

In 2020, Xinping announced a new pledge: that his country’s emissions would peak before 2030 and that China would reach net zero by 2060. This year, he formalised those commitments and promised to stop financing coal-fired power plants in other countries.

The Chinese leader is known to save his major climate announcements for UN general assembly events, rather than play to the COP timetable.

But similar criticism could be aimed at New Zealand, with Prime Minister Jacinda Ardern not attending the talks and – more importantly – taking few concrete steps during the two weeks.

The Government did increase its NDC, before the summit began. Ardern promised to save 149 million tonnes of carbon dioxide over the next decade.

Billed as a halving of emissions, Climate Action Tracker said – minus the creative maths – this was closer to a 22 per cent cut (a target now rated as “almost sufficient” though not our fair share).

And even that won’t require the country to take additional action domestically. (Thus, New Zealand retained Climate Action Tracker’s “Highly Insufficient” rating).

 

Prime Minister Jacinda Ardern did not attend the Glasgow climate summit, citing her duties as the APEC host. (File photo) HAGEN HOPKINS/GETTY IMAGES

 

New Zealand is still planning to emit roughly the same amount of net emissions between now and 2030 as in the budgets proposed by the Climate Change Commission earlier this year. So now, the Government will just buy a few more carbon credits from other countries.

During the summit, New Zealand also signed up to a number of pledges without taking any major new steps. No new policies will be required for the Government to meet the Global Methane Pledge – because it’s a collective goal to reduce methane by 30 per cent, New Zealand can simply make the cut of 10 per cent it’s already obliged to under the Zero Carbon Act.

Similarly, our new membership in the pledge to end deforestation or in the Beyond Oil & Gas Alliance required little extra.

In sum, the Government has done little but spent more money: committing to a larger carbon credit bill, and also increasing foreign aid towards mitigation and adaptation for developing nations – which it bumped up to $325 million each year.

Still, New Zealand behaved better than our trans-Tasman neighbour. Australia refused to boost its NDC, stayed far away from alliances cutting methane and coal, and initially attempted to block declarations on phasing out fossil fuels.

 

 

Did they show us the money?

Climate finance was a critical item on this year’s agenda. In return for a commitment to begin cutting emissions, developed countries promised – by 2020 – to deliver $100 billion to developing countries each year.

That deadline was missed, but the COP26 organisers hoped to pull a few additional commitments out of large economies. Early in the talks, the goal appeared to be within reach after the Japanese prime minister agreed to bump his country’s share up by $10b.

Yet with the US arguing their hands were tied by a requirement to get permission from Congress, there were few other large economies to come to the table. As the summit closed, this goal remained unmet.

Australia was a relative Scrooge: prime minister Scott Morrison doubled his contribution – to AU$2b (NZ$2.08b) – whereas New Zealand quadrupled its cash to NZ$1.3b.

As well as meeting the old goal, the talks turned to the next climate finance target.

There wasn’t much progress on setting a new goal for mitigation finance, apart from a call for discussions to begin. Finance in the form of loans – a bugbear of developing countries – wasn’t ruled out. On a brighter note, rich countries are urged to “at least” double the cash put towards adaptation.

Another request of developed countries was for the finance they were owed, under the legal precedent of loss and damage, for the permanent effects that climate change was already having on their lives. In the Pacific, this includes the loss of land to sea level rise and salinisation, plus the loss of GDP from extreme weather events that had become a permanent part of storm season.

Developed countries had contributed the lion’s share of the rise in greenhouse gas, and therefore – the argument goes – should have to stump up that share of the costs.

And while developing countries welcomed the help from a proposed network that would offer them technical assistance in dealing with these permanent issues, they also wanted cash for reparations. This was a point of principle for many. In the end, the countries decided that this scheme “will be provided with funds”, though specific numbers will need to be discussed.

 

Cyclones are coming with increased frequency to Fiji. So too are calls for rich, developed countries to provide reparations. NASA VIA AP

 

The biggest sticking points

The summit’s to-do list also included the finalisation of the Paris Agreement “rulebook”, which would specify how the landmark 2015 accord would actually work in practice.

A number of sticky issues – including how countries might create and trade carbon credits between one another and what information would be required to be submitted on a regular basis – had failed to be resolved at previous meetings.

One of the most contentious debates revolved around who could claim credit for carbon-cutting projects paid for by others. Many countries – including New Zealand – maintained that the global carbon maths must be balanced: if carbon credits were sold, then the purchasing country (or company) would adjust its emissions tally down and the host country must adjust its tally upwards.

But Brazil in particular argued that the host should, essentially, be able to have its climate cake and eat it.

To settle this issue, a proposal to create two types of carbon credits was put on the table. There would be higher-quality credits to be sold to other countries and airlines in an international pact. In addition, there would be a lesser type of credit, offered to private companies.

The host country of carbon cutting projects now holds the power to authorise higher-quality credits. When that happens, the balanced carbon maths (that New Zealand and others want) would be required.

It can also authorise lesser credits. While these would be paid for by someone else, the host country could claim the environmental benefits when it reported its progress towards its NDC.

Experts, including Environmental Defense Fund’s Kelley Kizzier​, said this system appeared robust – though it may need keeping an eye on.

It’s debatable how many companies would want these lesser credits, since they may not be able to use carbon-neutral claims, for example.

However, activists were worried that giving host countries authorisation powers might allow them to flout safeguards, such as protections for human rights.

Another area of contention was on old carbon credits, dating back to the predecessor of the Paris Agreement, the Kyoto Protocol. Many Kyoto carbon-cutting projects had issued credits that remained available for sale.

 

Since president Jair Bolsonaro took office, Brazil began to fight for controversial climate provisions in the Paris rulebook. ERALDO PERES/AP

 

Climate activists hate this idea, criticising these old units as “zombie credits”.

But the host countries of some of these projects – notably Brazil – did not want to lose the value of the units. They argued that the schemes, which were reducing emissions, could collapse without funding.

In the talks, some countries signalled they’d be open to allowing these projects to transition into the new system, but wanted to restrict the number of “carryover credits” issued before 2020, when the Paris Agreement took effect.

A consensus was struck, allowing some old credits to enter the new system. There were a few limitations: the project had to have started after 2013, with the credits issued before 2021, and these could only be used towards a country’s first NDC. This is one compromise likely to receive heavy criticism from climate activists in the coming days.

The purchase of these old credits will weaken, or completely undermine, the NDC of any country that uses them.

Speaking earlier in the week, WWF carbon market expert Brad Schallert​ said it is risky to allow these credits, even if there’s no appetite for them. They “blow a hole” in the Paris Agreement, he added.

“If no one buys them, then we’d be okay,” he added. “But we have to assume the worst.”

A proposal to limit the number of carbon credits a country can use to achieve its NDC made it into the rulebook. New Zealand negotiators opposed this provision strongly – if set high enough, this could seriously mess with the Government’s plans to outsource up to 68 per cent of its carbon-cutting pledge.

But the work to set this limit won’t start until 2028, meaning it’s more likely to be an issue for the next NDC period, beyond 2030.

 

What climate activists fought for

Considering the failure of “Global North” countries to produce the $100b on time, one hot-button issue during the summit was a suggestion that every carbon trade should provide a 2 or 5 per cent cut of the proceeds to an adaptation fund, to help vulnerable communities.

It wasn’t just the percentage that negotiators were haggling over, but the types of trade involved. The Paris Agreement specifically links this idea to the international carbon market, so some negotiating teams (including New Zealand’s) thought this shouldn’t apply when countries trade directly with each other. But developing countries argued this would simply be a loophole, and wondered why anyone would design a carbon trading system with one type of credit undermining another.

This debate was also linked to a proposal to gift an “angel’s share” of all credits purchased to the Earth. If rich countries outsource their carbon goals to others, then this would give an additional boost, argued vulnerable countries (which are the keenest to see ambitious climate action). Shares of up to 30 per cent were suggested.

Under one COP26 proposal, a percentage of all carbon credits would be cancelled – and “gifted” to the good of the planet. NASA

 

In the end, countries settled on 5 per cent for adaptation, and 2 per cent for the planet, for any carbon credits sold on the international market.

But when countries trade credits directly between one another, they are only “strongly encouraged” to provide a share of the proceeds for adaptation and donate another cut to the Earth. This would mean a country such as New Zealand would be named and shamed for not doing this, but wouldn’t be breaking the Paris rules.

One of the passion projects of many New Zealand activists and attendees was to get protections for human rights and the rights of Indigenous people into the Paris rulebook. This would ensure that any projects using foreign funds to reduce carbon emissions would not come at the expense of vulnerable communities.

This was identified as a problem under the pre-2020 Kyoto credit system. The New Zealand negotiating team said it lobbied strongly for these rights to be included and the proposed rules to be as tough as could be.

This was successful: projects will need to demonstrate how they will protect these rights, both in the initial design of the scheme and in regular reports. The push to get an independent body to assess grievances was also successful.

 

 

A fight to get 197 countries to agree to some joint commitment calling time on fossil fuels was a major bone of contention at the 11th hour. To avoid annoying countries that export a lot of fossil fuels, the Paris Agreement doesn’t mention them at all.

As Saturday began, the proposed joint summary from all countries called for accelerated efforts to “phase out” both unabated coal power and inefficient fossil fuel subsidies. The US pushed to keep in the qualifiers “unabated” and “inefficient”, which weaken the proposal. It would, for example, allow coal power stations with carbon capture. The efficiency of subsidies is also a subjective assessment.

On the final day, China, India, Iran, Nigeria, South Africa and Venezuela voiced their opposition to this call.

India even argued that developing countries are “entitled” to use fossil fuels. The country’s negotiators proposed the watered-down “phase down” replace “phase out” related specifically to coal power.

This didn’t go down well: the Swiss negotiator pointed out the amendment would make it harder to reach 1.5C, and received a long round of applause. COP26 president Alok Sharma​, who set out to “consign coal to history”, became visible upset when discussing the concession.

In the end, the wording was reluctantly passed – so the package of wider measures could be as well.

While hardly progressive, fossil fuels still took a small hit, and the call could pave the way for stronger language at future COPs.

 

 

All in all, the sheer volume of competing interests means COP26 was unlikely to be capable of producing an agreement that any single person would prefer.

There will be a lot of interpretation of what it got wrong. But getting nearly 200 countries to collectively move, even on this existential issue, is a mammoth undertaking. For just a day or two, that needs to be celebrated.

The judgement of the world, particularly the young, was on negotiators’ minds. On Friday (Saturday NZ time), European Union climate chief Frans Timmermans​ held up a photo of his grandchild, and shared his concern about the young child’s future.

A day later, Tuvalu Climate Minister Seve Paeniu​ shared a photo of his three grandchildren. “Glasgow has made a promise to secure their future – that will be the best Christmas gift that I will present to them.”

 


 

Source Stuff

Asian Development Bank announces plans at COP26 to partner with investors to buy and retire coal power plants

Asian Development Bank announces plans at COP26 to partner with investors to buy and retire coal power plants

The Asian Development Bank (ADB) announced on Wednesday a fund that will buy coal power plants in order to shut them down early, replacing them with renewable energy alternatives.

The Energy Transition Mechanism (ETM) will be financed through a blend of equity, debt and concessional finance from funding sources including governments, philanthropy and private investors, to access low-interest loans to purchase the utilities.

The ADB is launching the pilot fund of US$2.5 billion to US$3.5 billion that will focus on buying plants in Indonesia, the Philippines and Vietnam with the aim to retire half of their coal fleet over the next 10 to 15 years, much sooner than their average lifespan.

“The ETM can usher in a transformation in the battle against climate change in Asia and the Pacific,” said Masatsugu Asakawa, president of ADB, at the launch of the ETM Southeast Asia Partnership at the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow, Scotland.

“Indonesia and the Philippines have the potential to be pioneers in the process of removing coal from our region’s energy mix, making a substantial contribution to the reduction of global greenhouse gas emissions, and shifting their economies to a low-carbon growth path.”

More than half of the total of the Philippines’ power generation and some 67 per cent of Indonesia’s electricity come from coal, which fuels more than a third of the energy consumed worldwide and is the single biggest contributor to climate change.

 

The ETM provides a way to accelerate their retirement by providing low-cost financing to coal plant owners. We will acquire or incentivise the plants to retire early, but they will operate for a period of time before they close.

David Elzinga, senior energy specialist for climate change, Asian Development Bank

 

Masato Kanda, vice minister for international affairs at the ministry of finance of Japan, pledged a grant of US$25 million to ETM, the first seed financing for the mechanism.

David Elzinga, senior energy specialist at ADB, said without financial intervention from ETM, coal plants that are locked into long-term power purchase agreements will continue to operate until the end of their financial and technical life, even if there are cheaper alternatives.

“The ETM provides a way to accelerate their retirement by providing low-cost financing to coal plant owners. We will acquire or incentivise the plants to retire early, but they will operate for a period of time before they close,” Elzinga told Eco-Business on the sidelines of the climate summit.

Elzinga added that the coal plants cannot be closed right away to give time for renewables to be fully integrated in the grid as well as ensure that workers and communities that depend on coal for their livelihood are secured first.

Sri Mulyani Indrawati, finance minister of Indonesia, said the “ETM is an ambitious plan that will upgrade Indonesia’s energy infrastructure and accelerate the clean energy transition toward net zero emissions in a just and affordable manner.”

Indonesia, whose state utility declared in May that it will retire coal power plants gradually as part of its ambition to achieve carbon neutrality by 2060, has pledged to lower emissions by 29 per cent by 2030 and reach net zero by 2060.

Carlos Dominguez III, finance minister and head of the Philippine delegation to COP26, said the country will be piloting the ETM project in Mindanao, the southernmost island group of the archipelago, also the most coal-dependent one.

“We have a unique opportunity in Mindanao to demonstrate our carbon-reduction commitment and pilot the ETM project. In Mindanao, the hydropower source has a huge potential. The government is in the process of rehabilitating the Agus-Pulangi hydropower plant to improve its generating capacity,” Dominguez said. “Mindanao will showcase an Earth-friendly future that can be replicated in other areas in the Philippines and even countries around the world.”

In June, the department of finance disclosed how the government planned to phase out coal plants in Mindanao and substitute them with renewable energy facilities. It was going to coincide with their project to improve the decades-old Agus-Pulangi hydropower complex in Mindanao, which has deteriorated due to lack of maintenance over the years.

The Philippines, which declared a coal moratorium last year, is aiming to reduce harmful greenhouse gases, known as the “nationally determined contribution” (NDC), by 75 per cent by 2030.

 

The ETM Southeast Asia Partnership launch at the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow, Scotland. In photo, (from left to right) are Per Heggenes, chief executive of IKEA Foundation; Philippine finance minister Carlos Dominguez III; Indonesian finance minister Sri Mulyani; ADB President Masatsugu Asakawa; and Dr Raj Shah, president, The Rockefeller Foundation. Image: Philippine Department of Finance

 

On Wednesday, 28 countries joined an international alliance dedicated to phasing out coal. The new members of the Powering Past Coal Alliance (PPCA), include Singapore and Poland, bringing the total number of national governments involved to 48.

Singapore is the first Asian country to join the PPCA, while Poland is the second largest consumer of coal in Europe and the region’s biggest coal producer. Other signatories include Chile, Estonia, Mauritius, and Ukraine.

However, China, India and the United States, the three biggest burners of coal worldwide, have not signed up to the PPCA. Other major users and producers of coal, such as Australia and Japan, have also not joined the group.

“People will ask about the omission of countries like the US from today’s announcement. The reality is that in the US and everywhere, coal is an expensive and outdated energy source that still fails to provide energy security. If the US wasn’t ensnared in Capitol Hill shenanigans we can be confident that the US would also have signed up,” said Leo Roberts, research manager at E3G, a think tank.

 

ETM: “premature and unclear”

Ahead of ADB’s announcement of its coal retirement mechanism proposal on Wednesday, civil society groups (CSOs) called on the Manila-based lender to delay soliciting financial support for its coal buy-out scheme.

In a letter to ADB, more than 60 CSO’s asked the multilateral bank to clarify details on how the ETM will shorten rather than prolong the lifespan of coal facilities.

“It’s unclear that it will hasten the transition to renewables and protect end-users from exposure to increased costs of power. Power plants in the target countries are not subject to market pressures and thus any buy-outs will have to contend with state support and opaque power purchase agreements,” read the letter.

The CSO’s also cited analysis from think tank Institute for Energy Economics and Financial Analysis that suggests that, if designed poorly, such a scheme could actually create direct or indirect incentives for coal-fired power plant operators to prolong the operations.

The signatories of the letter, which include the Centre for Energy, Ecology and Development (CEED) and NGO Forum on ADB, added that community stakeholders from ETM pilot-countries have yet to be informed of the details of the mechanism in their own languages or be consulted.

The letter read: “We urge ADB not to gamble with our climate survival and the possibility of ending coal in a swift, just, and genuinely transformative manner with a premature buy-out scheme that remains shrouded in uncertainty.”

Fraser Morton in Glasgow contributed to this report. 

 


 

Source Eco Business

UK leads G20 for share of electricity sourced from wind

UK leads G20 for share of electricity sourced from wind

Nearly a quarter of the UK’s electricity came from wind turbines in 2020 – making the country the leader among the G20 for share of power sourced from the renewable energy, a new analysis finds.

The UK also moved away from coal power at a faster rate than any other G20 country from 2015 to 2020, according to the results.

And it ranked second in the G20, behind Germany, for the proportion of electricity sourced from both wind and solar in 2020.

However, Britain is still lagging behind when it comes to fossil gas, according to analysis by the climate and energy think tank Ember.

The country sourced 37 per cent of its electricity from fossil gas in 2020, placing it ninth in the G20 and above the global average of 23 per cent.

 

“It’s crazy how much wind has grown in the UK and how much it has offset coal, and how it’s starting to eat at gas,” Dave Jones, Ember’s global lead analyst, told The Independent.

But it is important to bear in mind that “we’re only doing a great job by the standards of the rest of the world”, he added.

 

UK is second behind Germany in G20 for share of electricity sourced from wind and solar (Ember)

 

Ember’s Global Electricity Review notes that the world’s power sector emissions were two per cent higher in 2020 than in 2015 – the year that countries agreed to slash their greenhouse gas pollution as part of the Paris Agreement.

Power generated from coal fell by a record amount from 2019 to 2020, the analysis finds. However, this decline was greatly facilitated by lockdowns introduced to stop the spread of Covid-19, which stifled electricity demand, the analysts say.

Coal is the most polluting of the fossil fuels. The UK government hopes to convince all countries to stop building new coal-fired power stations at Cop26, a climate conference that is to be held in Glasgow later this year.

UN chief Antonio Guterres has also called for all countries to end their “deadly addiction to coal”.

At a summit held earlier this month, he described ending the use of coal in electricity generation as the “single most important step” to meeting the Paris Agreement’s goal of limiting global warming to well below 2C above pre-industrial levels by 2100.

“There is definitely a concern that, in the pandemic year of 2020, coal hasn’t fallen as fast as it needed to,” said Mr Jones.

“There is concern that, once electricity demand returns, we won’t be seeing that decline in coal anymore.”

 


 

By Daisy Dunne Climate Correspondent

Source Independent

2020: a dismal year for coal power

2020: a dismal year for coal power

Long seen as a critical emerging market for coal power, South and Southeast Asian countries radically reconsidered their commitment to it last year in the face of new economic realities following the spread of coronavirus.

According to a new analysis from Global Energy Monitor (GEM), four of the region’s largest emerging economies— Bangladesh, Indonesia, the Philippines and Vietnam—may have cancelled nearly 45 gigawatts (GW) of coal power in 2020, equivalent to the total installed capacity of Germany.

Prospects for a revival of coal development plans in 2021 have also been limited by announcements from major coal financiers in South Korea and Japan of new restrictions on coal power investments beyond their borders.

Analysts have for years warned that coal power expansion plans in several countries in South and Southeast Asia risked overcapacity in the sector, wasted capital and asset stranding—not to mention greenhouse gas emissions and environmental costs. The year 2020 may prove to be when the regions’ coal power expansion plans were finally re-evaluated in the face of the pressing need for climate action and the reality of declining low-carbon technology costs.

 

Falling one by one

Perhaps the most dramatic development in Asia’s energy sector last year was the summer flurry of coal power plant cancellations and postponements. It started in Bangladesh in June when Nasrul Hamid, Minister for Power, Energy and Mineral Resources, unexpectedly announced that the government was planning to “review” all but three of the country’s under-development coal plants, capping coal power capacity at 5GW. Suddenly, planned coal plants totalling 23GW were in doubt. By November, Bangladeshi media were reporting that the plan to scrap most of the country’s planned coal was awaiting approval from the prime minister.

A month later, details of Vietnam’s draft Power Development Plan, which is due to come into force next year, became public. The draft plan proposed cancelling seven coal plants and postponing six others until the 2030s, by which point it is highly unlikely they will go ahead. The 13 plants represent almost half of Vietnam’s planned coal power development.

Then, in November, the Philippines’ Department of Energy proposed a moratorium on new coal power plants which, according to analysis by GEM, could lead to 9.6GW of cancellations. And, in December, on the fifth anniversary of the Paris Agreement, Pakistan’s Imran Khan announced that the country would not construct any new coal power plants, though the real-world impact of this grandiose announcement has been questioned.

Adding in proposed project cancellations in Indonesia, GEM estimates that the coal power pipeline in South and Southeast Asia’s four major emerging economies may have dropped by as much as 62GW in 2020. That leaves just 25GW under development, an 80 per cent decline from just five years ago. Exact figures for cancelled and remaining plants will depend on how last year’s flurry of announcements is manifested in specific policies.

 

Source: Global Energy Monitor (GEM)

 

The financial drought continues

One contributing factor to the wave of coal power cancellations and moratoriums around South and Southeast Asia last year was the decline in finance. Banks faced growing public pressure to identify and manage the climate and biodiversity risks associated with coal power development and respond to the climate crisis by committing resources to renewables. A recent report from Greenpeace Japan estimates that Southeast Asia’s renewable energy market could be worth up to US$205 billion over the next 10 years.

In Japan, 2020 saw banks Mizuho, Sumitomo Mitsui, and Mitsubishi UFJ Financial Group announce restrictions on coal power investments. In Korea, state financial institutions Korea Export-Import Bank and KSURE both stepped away from involvement in coal power projects, while Samsung corporation and the state-owned Korea Electric Power Corporation pledged no further investments in overseas coal projects.

The Japanese government also committed “in principle” to limit investments in overseas coal power plants, declaring that such investments would be contingent on the use of ultra-supercritical technology and the host country having a decarbonisation strategy. There have also been strong moves within the Korean parliament this year to ban Korean financing of coal power overseas, with progressive MPs from the ruling Democratic Party proposing related bills on four occasions.

The wave of announcements comes on the back of Singapore’s three major banks announcing an end to coal power financing in 2019. This leaves Chinese banks increasingly the “lender of last resort” to coal power projects around Asia. According to the Global Coal Public Finance Tracker, Chinese banks have provided finance to a total of 53GW worth of under construction or currently operating coal power, far more than the 21GW propped up by the second biggest financier in overseas coal, Japanese banks.

 

Source: Global coal public finance tracker • Note: The data covers all projects under development since 2013, including currently proposed projects, which have received or are likely to receive public finance.

 

All eyes on China’s policymakers

But movement may be on the horizon in China too. At the beginning of December, a report released by the BRI International Green Development Coalition and supported by the Ministry of Ecology and Environment detailed how the Chinese government could establish a “classification mechanism” of overseas project types based on their impacts on local pollution, climate change and biodiversity. The mechanism labels coal power and coal mining as “red”, meaning that involvement of Chinese actors in such projects would be off-limits. Eyes are now on policymakers to adopt the report’s suggestions.

The growing number of national pledges to reach carbon net-zero has arguably given impetus toward “greening” the Belt and Road Initiative. Though China’s new 2060 net-zero goal is targeted at the domestic economy, numerous voices are calling for the expansion of the development target to overseas investments.

While these dizzying developments in Asian energy are certainly welcome news, “king coal” is still clinging on in several places. Countries such as Vietnam and Indonesia, despite their large-scale cancellations, are still pursuing the construction of significant quantities of coal power, while Cambodia has announced new coal power projects, backed by Chinese finance and construction. Meanwhile, despite its welcome net-zero announcement, China is still building new coal-fired power plants at an alarming rate at home.

Asia’s journey away from coal will be a long one but in 2020 many countries at least picked up the pace.

 


 

By Tony Baxter, China Dialogue

Source Eco Business

Philippine bank RCBC to stop lending for new coal-fired power projects

Philippine bank RCBC to stop lending for new coal-fired power projects

 

The Yuchengco Group takes a hard stance against coal power plants, but notes that the shift toward renewable energy will be very challenging.

 

“No more coal, no more coal. I’ll say that slowly: no more coal!”

 

Rizal Commercial Banking Corporation (RCBC) president and chief executive officer Eugene Acevedo made it clear that the Yuchengco-led bank will no longer fund coal energy projects, as the Philippines moves to cleaner energy sources.

Acevedo’s statement comes months after the Department of Energy announced that it will no longer accept new applications for greenfield coal power plants.

However, he noted that coal projects that were funded before will be on their balance sheets “for a while,” and admitted that it would be difficult for the country to rely entirely on renewables.

“It’s not to say that it will be all renewables, because the clouds can come, the waves can stop…to create a robust energy grid, there has to be a combination of renewables plus a few power plants that are rapidly ratcheted up…and those plants are usually gas-fired,” Acevedo said in a forum by the Yuchengco Group on Thursday, December 10.

PetroEnergy Resources president and chief executive officer Milagros Reyes added that while the coronavirus pandemic underscored problems with fossil fuels, particularly price volatility, the shift to green energy will remain challenging.

For instance, Reyes said that while funding for coal will be taken out, it will not necessarily go to wind, solar, or geothermal energy projects.

“It’s going to be mostly natural gas, that’s ‘deplete-able.’ But it’s clean. It’s not like coal. So like what Eugene is saying, they’ll probably be funding a lot of the LNG projects,” she said.

“However, and this is a big however, we do not expect immediate change because the fossil fuel and its products still have a big demand, but the demand will eventually scale down especially here in the Philippines.”

PetroEnergy has interests in oil exploration, geothermal, wind, and solar energy.

Reyes also noted that there are various coal-fired power plants under construction now, which will be up and running by as early as 2022.

Some Philippine banks have started to move away from funding coal projects and have set milestones in sustainable finance.

In the case of RCBC, it issued its first green bonds in 2019 amounting to $290 million or around P15 billion. It also raised P8 billion from its first peso-denominated sustainability bonds, and another $300 million in September 2019.

These bond issuances have funded a total of 9,797 green and social projects amounting to more than P56 billion.

RCBC’s sustainable lending portfolio comprised 10% of total loans as of end-September 2020.

 


 

By Ralf Rivas

Source Rappler

Black & Veatch: No More Coal Construction

Black & Veatch: No More Coal Construction

Black & Veatch is ending the company’s participation in coal-based power market design and construction, saying it will allow the company to focus on clean energy technologies. The engineering and construction giant’s announcement Oct. 29 comes just more than a month after another major energy company, General Electric, said it would exit the new-build coal power market.

“We are an employee-owned company, and we do not make decisions based on what the market wants to hear, or how the market will react,” said Mario Azar, president of Black & Veatch’s power business, in an interview Thursday with POWER. “We make decisions based on the values of our company. We’ve been around for more than 100 years, and we want to be around for another 100 years or more.

“That’s how we make decisions as the executive committee of Black & Veatch,” he said. “It’s really centered around our values and our future. It was us, telling ourselves, did we really want to be part of that [coal] legacy anymore?”

Overland Park, Kansas-based Black & Veatch in a news release said it recognizes “the global power industry is in a state of transformation and needs to accelerate the path to net zero as many companies, communities and stakeholders forge ahead with commitments to lower carbon emissions.” The company said it “will fulfill current project commitments to completion,” but going forward its efforts “will focus on supporting clients through their transition to a balanced energy portfolio with cleaner energy sources and towards achieving their decarbonization and sustainability goals.”

Black & Veatch, founded in 1915, is a global leader in the engineering and construction industry, and had revenues of $3.7 billion in 2019. The company over the past several years has increased its participation in renewable energy and energy storage technologies, and in Thursday’s announcement said it has supported “deployment of hydrogen as a carbon-free fuel and advanced technologies for carbon capture.” The company also has invested in modernizing a power grid that increasingly must accommodate intermittent renewable energy and different baseload sources of generation.

 

Decarbonization Targets

The company in its announcement said the move away from coal is a recognition that “clients need to reliably achieve varying decarbonization targets,” and said the shift allows the company’s workforce “to further accelerate the creation of solutions that help transform the industry, including helping clients reduce dependence on coal power assets and minimize the impact of those assets to the environment.”

“The transition away from any coal-related activity is about our commitment as a company to sustainability and accelerating our efforts to lead the emerging carbon-free energy future,” said Steve Edwards, the company’s CEO.

“There’s going to be a point when you have to make some of these difficult decisions,” Azar said. “We have been involved in building power plants in Asia, some of which we’re in the process of finishing, and as we near completion—particularly in Asia—there’s been a new wave of projects we’ve been invited to participate in. Looking at the future, looking at our sustainable commitment as a company, looking at the economics today that make renewable energy affordable, and certainly energy that is far, far lower in emissions than coal … we asked ourselves, ‘Do we really want to build another coal plant that is going to pollute the air for a very long time to come?’ We decided we don’t. It’s time to recognize that this is just the right thing to do.”

He continued: “There is a financial implication to this decision. We are leaving projects that we can participate in behind, and there is a [financial risk] to it, but we believe it is a very short-term implication compared to a longer-term vision. It’s really about the future, a cleaner and very robust energy alternative to coal.”

 

New Technology Needed

Azar, who came to Black & Veatch in 2018 after stints with Siemens and Westinghouse, said the changing power landscape calls for more engineering prowess and technical innovation. “At the same time the industry wrestles with its transformation, global communities continue to have demand for safe, reliable and cost-effective power,” he said. “These forces create a delicate balance that requires deep engineering and technology expertise to help guide the complex transition of power generation and delivery infrastructure.”

Black & Veatch in its news release noted that earlier this year the Intermountain Power Agency (IPA) selected the company as Owner’s Engineer on IPA’s Intermountain Power Project Renewal Project, “one of the earliest installations of combustion turbine technology designed to use a high percentage of green hydrogen,” it said.

The company’s new 2020 Strategic Directions: Electric Reports details how the power generation industry is pursuing lower-carbon solutions, including integration of renewable resources to the power grid to increase resilience and reliability.

Black & Veatch already is working on emerging technologies for carbon capture and utilization. It also is looking at advanced nuclear power technologies, such as small modular reactors, which were part of the focus of POWER’s virtual Distributed Energy Experience event Oct. 19-22.

Black & Veatch on Thursday said it recently surveyed more than 600 power industry executives, and more than 75% indicated their companies are investing more money in clean energy, with 8 in 10 saying spending on new generation capacity will be directed toward solar power, microgrids, and other distributed energy resources (DERs). Black & Veatch said its commitment to help clients achieve clean energy goals mirrors its own; by 2023, the company plans to have reduced its overall emissions by 20%, and its fleet and building emissions by 40% compared to 2019 levels.

 


 

By Darrell Proctor

Source: Power Mag