THE Manila-based Asian Development Bank (ADB) announced that it will be revising its energy policy to help its developing member countries (DMCs) reduce their dependence on coal.
ADB’s Energy Sector Group Chief Yongping Zhai said part of the reason for the revision of ADB’s energy policy is the recent findings of the Independent Evaluation Department (IED) of the bank’s energy investments.
Zhai: “The low-carbon energy transition will be a big challenge in Asia because most countries have depended on fossil fuels for a long time—and coal in particular.”
The IED cited a need for ADB to clarify its formal institutional position regarding the financing and use of coal energy resources, even if it has refrained from investing in coal-fired power plants since 2013.
“The low-carbon energy transition will be a big challenge in Asia because most countries have depended on fossil fuels for a long time—and coal in particular,” Zhai said.
“Coal-fired power stations often have a lifespan of more than 30 years, while the average age of the Asian coal fleet is about 12 years. This means that phasing out coal will be a complex and enduring process,” he added.
Executive Director Red Constantino of the international policy group Institute for Climate and Sustainable Cities (ICSC) agreed that “phasing out coal will be a complex and enduring process,” but added quickly, this may have been avoided.
Constantino said if only ADB had listened to the counsel of civil society organizations to veer away from coal when the 2009 energy policy of ADB was being crafted, the current dilemma might have been avoided.
He added that another problem is cropping up with fossil fuels. On Thursday, Reuters reported that ADB is one of the multilateral institutions that did not make the pledge to phase out fossil fuel investments.
“They might be making the same mistake today the way they speak so fondly of fossil gas as a bridge, the way they embraced the delusion of ‘clean coal’ in 2009 when they approved their current energy policy,” Constantino said.
“The reality is fossil gas is the only bridge in the world that has no end, until economies sink, that is, from the combined weight of stranding fossil assets and worsening climate-change impacts,” he added.
Zhai said the new energy policy will help members develop sustainable and resilient energy systems that will foster economic growth and provide secure and affordable modern energy services.
He said the seven operational priorities through innovative cross-sectoral approaches, including solar pumps for irrigation, green jobs for women, renewable energy for clinics and schools, electric vehicles for transport, energy efficient water supply systems, and smart buildings in cities, among others.
Zhai said the revised energy policy will be presented to the ADB Board for approval in the last quarter of 2021. He added that a series of stakeholder consultations will be conducted as part of the process.
The consultations will include development partners, international organizations, energy policy and technology experts, civil society organizations, and the public.
He noted that the existing energy policy, crafted in 2009, was instrumental in guiding $42.5 billion in energy sector support across all DMCs from 2009 to 2019.
Zhai said the ADB is now seeking answers to questions such as technologies and innovations in the next five years and how they can become game changers for climate goals and identifying cross-sectoral issues such as the energy-water-transport nexus.
He added that ADB seeks to identify the needs and priorities of developing countries in Asia and the Pacific that require more support and assistance from ADB and the long-term impact of Covid-19 on the energy sector.
No time to waste
However, as far as ICSC is concerned, Constantino said the ADB has to “confront over a decade of mistakes” with regard to the use of coal in several energy projects it supported through the years.
Constantino also said that more than fighting over innovations and technologies, the ADB and its DMCs cannot afford to waste time and energy when it comes to finding ways to decarbonize.
“It’s not a fight over which technologies should prevail. The debate is about time horizons, and how early its developing country members can establish firm decarbonization pathways that benefit the working families of the region,” Constantino said.
“Developing countries in Asia cannot afford to waste more resources in terms of money, political will, and, most importantly, time that it does not have much of,” he added.
In 2018, Zhai said coal generated almost 60 percent of electricity in Asia and it plays an outsized role in the bigger countries, generating 66.5 percent of all energy produced in the People’s Republic of China, 73.5 percent in India, 56.4 percent in Indonesia, 44.6 percent in Malaysia, and 52.1 percent in the Philippines.
The ADB said with the Paris Agreement, countries have committed to reduce their greenhouse-gas emissions. Based on the International Energy Agency, if all countries in Asia and the Pacific pursue a low-carbon transition more aggressively, the share of coal power generation will fall to 25 percent by 2030, dropping to 10 percent by 2040.