World Bank taking the long view on renewables growth

Last month the World Bank released the ‘Sustainability for all ” Global Tracking Framework Report’ and it has as one of its objectives the doubling of the share of renewable power generation in the global energy mix by 2030.

It’s a report that looks set to be keenly discussed at the World Energy Congress in Daegu, South Korea in October.

Power Engineering International (PEi) spoke to Christopher Neal of the World Bank’s Sustainable Energy Department and put it to him that such an ambition appeared to be out of step with economic realities, or to put it crudely, when so many national economies are “broke”.

Mr Neal also spoke about the untapped renewable potential of Africa and the positive impact that China has had on renewable development.

Just a fortnight ago the Czech Republic announced it was removing subsidies for renewable power, while ahead of Germany’s elections Chancellor Merkel served notice of her intent to reduce the subsidy available for renewable power. In the short term such happenings might suggest doubling renewables strength is not realistic.

“You’re right to say that the current environment, with announcements being made by European countries in the context of the economic slump, that is not encouraging, but I think the longer term view is probably more positive”, says Mr Neal, adding that the Sustainability for all ” Global Tracking Framework Report launched by Ban Ki-moon in 2011 was designed to drive the initiative, making progress measurable, and targets achievable.

“In order to be able to double the share of renewables in the global energy mix and track it you need a baseline, then to agree on definitions and define current status. It’s the first in a series that will come every two years, put together by 15 agencies led by the World Bank.”

“Initially it was found that 18 per cent of global energy is renewable and that includes biomass and hydropower. Doubling it to 36 per cent by 2030 is very ambitious and where you really see the ambition is partly about mobilising the investment to do it.”

A key element of the bank’s approach is in helping to remove the barriers that currently exist in hampering renewable energy potential in various parts of the world.

The retreat from coal investment by bodies such as the World Bank and European Investment Bank is one aspect, as that funding that might have one time gone into fossil fuels is now much reduced to those generators, available only under limited circumstances.

The signals being sent by the banks are strong in terms of the overall global shift towards a greener future.

“The energy sector directions paper ” discussed by the World Bank’s board in July ” specifies that the World Bank will provide financing for Greenfield coal only in rare circumstances and subject to strict criteria. The language being used reflects an emerging consensus and also reflects the orientations that are expressed in the sustainable energy for all initiative as well. If you want to double renewables then implicitly you think that’s a good thing to do and indeed its part of the banks climate agenda too.”

Neal says it isn’t only an environmental factor that informs the institution’s thinking ” there is also a market element in that countries that have a high reliance on coal face generally fewer obstacles in getting financing because the technology for using coal is well understood.

It’s commercialised, and lower in cost than others so the case for the bank getting involved is not as strong as in some other areas in the energy sector where there are more obstacles to getting financing.

By way of example Neal points to under-utilised resources that could transform much of Africa from an environmental and economic perspective.

“We are looking to mobilise and exploit some of the geothermal potential in the Rift Valley area of East Africa, which lies under 13 countries in that geographical region. Hydropower is another one; less than 10 per cent of hydropower potential in Africa is exploited at present and that tends to be more difficult to find financing for in the longer term and these are areas where we are focusing our efforts.”

While Europe’s dysfunctional carbon trading system’s problems are well documented, Neal and the World Bank are glass half full about the prospects for similar schemes as well as the European initiative itself.

“I think it’s interesting what you say about the Czech Republic and Germany also and the subsidies being dropped left and right, however China is launching a carbon market, and there are carbon markets being developed in subnational governments, for example California, Quebec, Chile, Brazil, Costa Rica and Colombia are all developing some sort of carbon market, or emissions trading or other forms, such as carbon taxes in places like Turkey, South Africa and Mexico.”

China often gets a bad press, not unlike what the USSR received during the Cold War era, however the statistics compiled by the World Bank offer a balanced view of its record in promoting renewable power generation.

“The global tracking framework report- looks at where the largest renewable investment is being made, specifically which countries are spending the most on renewable energy and efficiency and China leads the pack in both.”

“There is often a very negative narrative about China’s role in terms of carbon footprint – and justifiably so in one sense, as its grown more than any other country – but everything China does the magnitude is always bigger in its impact than what anyone else does.”

“The fact remains it has also done more in terms of energy efficiency and renewable energy expansion than any other country in the world.”

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