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ADB to Close doors not just on coal

A multilateral agency’s plan to stop financing new coal power plants will be meaningless if not matched with a strong push fo renewable energy (RE) sources, environmentalists said.

The Institute for Climate and Sustainable Cities (ICSC) and the Center for Energy, Ecology and Development (CEED) fear without clear RE plans, other forms of fossil fuels will be pushed instead.

The Asian Development Bank (ADB) in a recent draft energy policy for supporting low-carbon transition in Asia-Pacific released last week said it aims to support developing member- countries to achieve a planned and rapid phase-out of coal in the region while ensuring “a just transition” that considers the impact on people and communities.

The draft, which is due for consultation, said ADB will not finance any coal mining, oil and natural gas field exploration, drilling or extraction activities as well as any new coal-fired capacity for power and heat generation or facilities associated with new coal generation.

It added ADB will not finance investments in nuclear energy despite its ability to provide low carbon baseload electricity due to public acceptance and related risks.

The bank, however, has recognized the possibility that many countries in the region will continue to include gas in their energy transition strategies to replace coal and fuel oil.

“We commend the ADB for issuing this draft of ending coal, even though its main position is over a decade late. Flexible power which is not reliant on large baseload plants and able to balance variable supply from renewable energy sources without compromising supply reliability, could have accelerated the demise of coal,” said Pedro Maniego Jr., senior policy advisor of the ICSC.

Maniego said with the bank’s policy signals, the bank will be more open to finance the development of stable and modern power grids that can absorb a far greater amount of renewable systems.

“However, it is concerning that as the door is closed on coal, the door seems to have opened indefinitely for fossil gas. There is no bridge in the world without an end and if the bank will consider fossil gas as a bridge and transition fuel, it needs to stipulate an end.

ADB did cite green hydrogen from renewable energy sources, which could eventually replace natural gas. Policies toward this end need to be established with urgency,” Maniego said.

Meanwhile, Gerry Arances, executive director of CEED, said while it commends the bank for its policy shift, there is a need for the organization to also stop funding other destructive sources of energy apart from coal.

“We are also concerned that ADB still intends to support destructive renewable energy systems like large hydropower plants, which are not ecologically just. The ADB must remove these from its definition of clean energy. In lieu of these and instead of promoting privatized systems, ADB would do well to support community-based microgrids which would empower local communities and can fuel the sustainable development we need today,” he claimed.

The ADB in 2009 first implemented its energy policy which focuses on promoting energy efficiency and renewable energy; maximizing access to energy for all; and promoting energy sector reforms.

The bank said from 2009 to 2019, the policy has become “instrumental” in guiding $42.5 billion in energy sector support across all developing member countries.

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