ADB May (Finally And Formally) Turn Its Back On Coal Power

Asian Development Bank and coal

The Asian Development Bank is testing the waters for a new policy that would forbid it from backing coal mining and new coal power projects.

The Asian Development Bank is a regional development bank that was established back in 1996. Its stated goal these days is “achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.” Note the “sustainable” mention.

It supports projects in developing member countries that create economic and development impact, delivered through both the public and private sectors. One of its focuses at the moment is a sustainable recovery from COVID-19 in Asia and the Pacific; the economic recovery the UN keeps pleading should a “green” recovery, free of fossil-fuel subsidies and other support.

Something else the ADB has been tinkering with is a new Energy Policy, a draft of which was released last week for public consultation. While the ADB says it has not financed investments in coal power plants since 2013, its existing policy allows for it.

But given the major changes in the energy landscape and considering the new emphasis of ADB’s Strategy 2030 released nearly *3 years ago* that includes the “sustainable” bit mentioned above; it’s time for the policy to be tightened up to reflect that.

On page 25 of the draft policy, the ADB states it will not finance:

  • Coal mining
  • Oil and natural gas field exploration, drilling or extraction activities
  • Any new coal-fired capacity for electricity and heat generation
  • Any facilities associated with new coal generation

So, that would be new coal power dealt with (or more accurately, not). But what about existing coal power?

The document states:

“ADB will not participate in investments to modernize, upgrade, or renovate coal facilities that will extend the life of existing coal-fired power and heating capacity unless it is to re-engineer such plants for use of cleaner fuels, such as natural gas or renewable energy sources.”

That renewables support sounds good, the bit about gas, not so much – and a few groups have already bailed up ADB on that.

An End To New Coal Power In Japan?

While on the topic of the Asia Pacific and coal, there has been an interesting recent development in Japan, an ADB member.

The Straits Times reports plans have been scrapped for a 1.3 gigawatt coal power project in Akita prefecture, which was meant to be up and running by 2024. The reasons provided were the government’s tighter environmental rules and banks shying away from financing such projects.

The article notes several coal projects are currently under construction in Japan, but there are no plans for more plants past those.

In October last year, Japan’s Prime Minister Yoshihide Suga said the country would become carbon-neutral by 2050, then last month announced an aim of a 46% reduction by 2030 – and to go further if viable. This new commitment was well up on the previous 26% reduction from 2013 levels by 2030.

It’s a bit of positive news for the planet, but not so great for the Australian coal industry as Japan is a major market for our problematic black rock.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

Comments

  1. Hi,

    Still going to need oil & refineries for lubrication. Not as many, or as much as now. Not going to bother us in OZ since we stopped making it here.

    I can’t wait to see what happens once gas disappears, and everybody is using electricity to cook. Those power lines are going to sag!! There’ll have to be a roster as to who can cook, when, and how long.

    dRdoS7

    • Geoff Miell says

      dRdoS7,
      You state: “I can’t wait to see what happens once gas disappears, and everybody is using electricity to cook. Those power lines are going to sag!! There’ll have to be a roster as to who can cook, when, and how long.”

      Careful what you wish for, dRdoS7.
      I’d suggest if governments effectively plan for and encourage an orderly but rapid deployment of affordable, all-electric solutions, including adequate transmission links to enable the rapid transition away from fossil fuels then it’s less likely there will be a problem.

      What’s the alternative, dRdoS7? Business-as-usual? That means likely civilisation collapse later this century.
      See my comment at: https://www.solarquotes.com.au/blog/agl-greenpeace-emissions-mb1988/#comment-1058146

      I’d suggest don’t vote for politicians advocating for or supporting more fossil fuel developments and extensions, and who are getting in the way of the inevitable low emissions energy transition. IMO, that’s civilisation suicide.

      • Hi,

        Not actually wishing for gas to go (not just yet, anyway), more wondering if the people who want no fossil fuels (now!!!) have thought it through. In the future, far, far distant future if current federal goverment has their way, I can see it, but we’re going to need a lot more electricity available to replace that lost gas. A lot.

        We were looking at electric cooktops last year, instead of using gas, and realised how much they draw, plus an oven of course. No way my solar/batteries/inverter were going to run all that. I’d need x2 more of everything.

        dRdoS7

  2. Ronald Brakels says

    Looking at Australian thermal coal exports for 2020 I see the main markets were:

    China 17%
    Japan 36%
    South Korea 14%
    India 4%
    Vietnam 7%

    If those figures are correct, there must also be a fair bit of coal going to other countries, but Japan is clearly the largest customer. China’s buying about one-third less than they were as a percentage of total exports. Decline in tonnage has been more than that.

    • Geoff Miell says

      Ronald,
      Per the Australian Government Office of the Chief Economist’s report titled “Resources and Energy Quarterly March 2021”:

      Monetary value of top five countries importing Australian thermal coal in 2020 (page 53):
      1. Japan: _ _ _ _ _$6.9 billion – (circa 42%);
      2. China: _ _ _ _ _$2.5 billion – (circa 15%);
      3. South Korea: _ $2.1 billion – (circa 13%);
      4. Taiwan: _ _ _ _ $1.9 billion – (circa 11%);
      5. India: _ _ _ _ _ $0.5 billion – (circa 3%);
      Rest of World: _ _ $2.7 billion – (circa 16%);
      TOTAL: _ _ _ _ _$16.6 billion (just adding up the figures as is – there may be rounding errors)

      “Australia’s thermal coal export values are forecast to fall from $21 billion in 2019–20 to $15 billion in 2020–21. Earnings are expected to remain largely steady at this level out to 2025–26.”
      https://publications.industry.gov.au/publications/resourcesandenergyquarterlymarch2021/index.html

      Ronald, where did you get your figures from? Are they tonnage-based percentages?

  3. Des Scahill says

    This July 2020 article in “The Diplomat” gives a more up-to-date situation for Japan.

    Assuming the facts in that article are correct, Japan is

    a) Sticking with coal as its baseline source of energy for the time being
    b) “will phase out 90 percent of the country’s old and inefficient coal-fired power generators, alongside the construction of “cleaner” high efficiency coal power by 2030” ( the 90% fig represents 114 stations out of a total 140 )
    c) The new coal power stations will have the ability to incorporate energy from renewable sources into their output, Their aim is to have all this done by 2030

    Coal represented 32% of electricity generated in 2018, this only drops to 27% under the proposals, but the new plants will use higher grade coal, and this will reduce emissions by somewhere between 20-30% compared to previous coal related emission levels. Natural gas is another 38% or so of the fossil fuel component of total supply

    You’d need to read the whole article to get a better sense of what’s occurring, including the heated internal debate about insufficient introduction of renewables. It seemed to me that one faction in Japan is trying to take advantage of likely future lower prices for coal, ie looking solely at the economics., while the other faction wants more renewables

    At the time of Fukushima disaster, nuclear was 30% of the energy supply, but plummeted to 1.7% after that. So obviously its virtually complete disappearance overnight would have created a mega-huge supply problem for the whole country at that time.

    Japan’s population is also in decline, expected to fall from roughly 126 million today to below a 100 million in 2058, due to the well known demographic factors affecting most advanced societies (including China)

    Personally, I’d be inclined to give Japan a bit of leeway in their climate change objectives, rather than criticize them.

    Living atop an earthquake prone zone, aggressive nearby China neighbour, virtually no natural resources of their own, limited availability of agricultural land, need for large outlays and catch-up on military related expenditures etc presents a large number of major problems that all need to be dealt with somewhat simultaneously.

  4. Des Scahill says

    Oops, forgot to give the link to ‘The Diplomat’ article:
    https://thediplomat.com/2020/07/japan-promotes-clean-coal-in-the-battle-against-climate-change/

  5. James Silcock says

    I have been visiting Japan a lot over the past 12 years.
    I used to Marvel at the amount solar panels i would see while riding the trains, and lament about the lack of solar back in Australia that has so much sun.
    That has changed over time and I am now proud of the amount of solar i see in Australia.
    Japan is going to have a difficult time going to renewables. Their landscape is already mostly Mountains/farmlands and Cities, solar is not going to get them very far. Offshore wind might be good, and tidal and geothermal is those technologies ever mature.

    • Geoff Miell says

      James Silcock,

      You state: “Japan is going to have a difficult time going to renewables. Their landscape is already mostly Mountains/farmlands and Cities, solar is not going to get them very far. Offshore wind might be good, and tidal and geothermal is those technologies ever mature.”

      I attended a free information session on Monday night (May 10) hosted by the Lithgow Community Power Project at the Lithgow Workies on Lithgow’s Energy Future with special guest speakers Sebastien Roebben from Neoen and Professor Andrew Blakers from the Australian National University.
      https://www.facebook.com/lithgowcommunitypower/posts/257946172506827?__tn__=H-R

      I recall Professor Blakers saying on Monday night that he thinks Japan has good renewable energy resources, particular offshore wind, and he suggested that Japan probably won’t need to import hydrogen in the quantities currently being hyped in the media – Japan will probably be able to produce their own.

      IMO, the key takeaways were:
      * Blakers thinks the Federal electorates of Calare (with Nationals incumbent Andrew Gee) and Hume (with Liberal incumbent Angus Taylor) have the best combination in Australia of available renewable resources (both excellent wind and reasonable solar), a plethora of potential off-river pumped-hydro sites and very strong transmission links.
      * The energy transition is inevitable, and either the local communities best placed take advantage of these apparent excellent opportunities, or miss out and be left stranded. Developers will go along the path of least resistance.

      Blakers’ presentation was video recorded. The Neoen presentation was not permitted to be recorded.

      IMO, the Q&A session following the presentations provided an excellent opportunity for the Lithgow community to engage and hear factual counterpoints to all the misinformation being disseminated by various media sources.

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