UK bank takes pragmatic stance on coal power for development

UK bank takes pragmatic stance on coal power for development

By | Bangladesh, Developing Countries, Indonesia | No Comments

Despite coming under pressure from Western environmental activists, British bank HSBC has said it will continue to fund coal power in Bangladesh, Indonesia and Vietnam

HSBC has also promised to stop lending to coal power projects in developed markets by the end of 2019.

Daniel Klier, head of strategy and sustainable finance at HSBC, said coal power was still the only realistic way to sufficiently increase the power supply in coal-rich developing countries such as Bangladesh, where 62 million people still lack no access to electricity.

“We are trying to balance two different sustainable development goals of getting power to the people and limiting the environmental impact,” Mr Klier told the FT.

Indonesia, Bangladesh and Vietnam have all made huge strides on poverty reduction in recent years, thanks in part to a mass-expansion of the coal-powered grid.

All three Asian countries favour coal because it’s available locally in the region and unlike solar, it can provide “baseload” electricity that can operate day and night.

Japan and China are growing their own economies by helping the fastest growing countries access cheap and reliable power

By | Affordable electricity, Indonesia | No Comments

New analysis shows that China and Japan are making billions helping other Asian countries access cheap and reliable power. So why isn’t the UK?

A recent study of the Indonesian energy sector revealed that 18 of the 22 coal-fired power plants built there since 2010 had been financed by Chinese or Japanese development assistance.

Indonesia, which has a population of 260 million, is desperate for energy to power its growing economy. The World Bank estimates it needs to create at least 1.7 million jobs a year for the young people entering its workforce, requiring large amounts of baseload electricity (which can’t be provided by weather-dependent renewables). For Indonesia, cheap and locally abundant coal is the fuel of choice.

China and Japan have stepped up to provide assistance, partly to help a key trading partner but also to support their own manufacturers – which are providing Indonesia with the latest “ultra-supercritical” technology.

By boosting the efficiency by which energy is extracted from coal, these power plants produce significantly less carbon dioxide than older systems. One recent study found that if every country in Southeast Asia moved to upgrade its coal plants with this technology, the equivalent annual carbon emissions of China, the US and the EU could be saved by 2035.

The UK and US also have expertise in this technology, but have so far failed to capitalise on it because of official restrictions on funding for coal power. However, with the US now signaling it’s prepared to support the pragmatic use of coal in energy poor countries, the UK’s stance looks increasingly dogmatic.

The reality is that countries like Indonesia, Vietnam and Myanmar are relying on coal to develop their economies and bring electricity to their people. We can either help them do so in the cleanest possible way or sit by while other nations win trade and influence.

Indonesia could be one of the biggest success stories of this century – but not without reliable power

Indonesia could be one of the biggest success stories of this century – but not without reliable power

By | Indonesia | No Comments

Indonesia is undergoing the most rapid urbanisation of any Asian country, with 68% of its population likely to be in cities in the next ten years according to World Bank estimates. 

With good electricity supplies to its cities – around 94% of people living in cities have access to electricity – this bodes well for those in urban centres. But what happens to those left in the rural areas of the archipelago, who risk being trapped in energy poverty as the capital surges ahead? 49.7 million Indonesians currently live without electricity.

The latest World Bank report concluded that Indonesia is not spending enough of infrastructure, leaving many communities vulnerable to poverty.

With access to reliable electricity at the heart of this, J Younger Scott, Chancellor of Jakarta’s President University and one of the country’s infrastructure experts, sets out how the government should approach the problem, arguing the resource-rich country should adopt a pragmatic mix of fossil fuels and renewable sources, noting that Indonesia has abundance of both. His criteria are that any new renewables be ‘proven and available,’ while fossil fuels should be fitted with the latest carbon reduction technology. It provides clear ways the international community could help Indonesia’s growth and ensure millions living in rural areas are not left behind.