Friday, March 14, 2008

World Bank getting anxious on financing coal fired power plants?

"IFC's proposed Tata Ultra Mega [coal-fired power plant] project is obsolete, unnecessary, ultra-dangerous for the planet, and mega-dangerous for the environmental reputations of the IFC and the World Bank Group. Does anyone really believe that donor-country taxpayers will continue supporting the Bank Group if it takes billions for the Clean Technology Fund with one hand and invests billions in coal-fired monsters with the other?"  This is not a quote from Earthlife, or any other green pressure group, but a piece written by Prof Wheeler in the World Bank. 

See also earlier posts on Rising risks of coal-fired power stations, Coal fired utilities delayed in US, and Coal - still the cheapest option, where it was pointed out that the continued expansion of coal-fired power stations ( as cheapest form of energy) is coming increasingly under pressure for reasons related mainly to construction costs and climate risks.

How will this impact on developing nations, including South Africa? We are certainly not immune to rising construction costs. We are also not immune to climate risks, although South Africa has no binding constraints on the emissions of greenhouse gases. Cleaner coal technology is often put forward as a mediatory solution, but a practical solution to carbon capture and storage at affordable costs is still far of (see post Climate risks start to bite Eskom's planned coal fired power stations).  

With escalating problems in energy security, vast reserves of still relative cheap coal (when compared to natural; gas and oil) and surging demand from Chindia (The Future of coal), there are incentives abound to keep investing in coal-fired power stations.  Whether escalating environmental risks will be acknowledged and rigorously included or used as a scapegoat for stalling development is more a function of leadership.   

On this score and if you are in coal: some important financing institutions are starting to make noises that is worth taking note of. 

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