- June 27, 2018
Indian public banks funding more coal than renewables;
Thermal power receiving massive public funding despite ballooning bad loans, coal shortage
A new investigation has revealed that coal-fired thermal power received Rs. 60,767cr (USD 9.35bn) in financing from India’s largest public sector banks (PSBs) in 2017. The figure is nearly three times their lending to renewable energy capacity addition – Rs. 22,913cr (USD 3.5bn) – and heavily skewed towards thermal power projects in Chhattisgarh, Jharkhand and Uttar Pradesh. The former in fact attracted 10 times more financing for coal-fired power while the latter two received none for renewables.
The revelation comes at a time when bad loans by PSBs to the power sector – dominated by coal-fired power – have ballooned to INR 1.74 trillion (approx. USD 26.7bn), nearly 75GW of stressed assets may face liquidation proceedings, 15.6GW of capacity is stranded in the absence of PPAs and the govt. admitting that India is facing a severe coal supply crisis. Reports suggest the country may even resort to importing coal from Indonesian Papua to keep (private) thermal power plants from shutting down.
G20 energy ministers endorse natural gas as key future fuel, Coal-fired power failing across the US
Energy ministers of the G20 member nations – meeting in Argentina – issued a compromised joint statement that endorsed natural gas as a key fuel for lowering global carbon emissions. The communiquÃ© was heavily influenced by US insistence on diluting reference to the Paris Agreement and the implied urgency of a much faster move away from fossil fuels. US energy secretary Rick Perry has also offered Argentina technical assistance in developing its giant, largely untapped Vaca Muerta shale oil and gas reserves
Back in the US nearly 40% of the country’s coal-fired power capacity has either shut down or is facing imminent shutdown, despite President Trump’s orders to revive the sector. Several US utilities have already publicly pledged to source electricity from renewables and natural gas powered plants because of their lower tariffs. Coal – as well as oil & natural gas – has also alienated the US Democratic National Committee, which has banned accepting any campaign contributions from political groups linked to fossil fuels.
WB may pull support from its last coal power plant, UK pension funds could divest from fossil fuels
The World Bank is considering withdrawing support to the last coal-fired power plant on its books – the yet to be constructed 500MW Kosovo C plant in Kosovo – in continuation of its 2013 policy to support coal-fired power only under “rare circumstances”. World Bank had previously announced in 2015 that it will not support any upstream oil and natural gas projects after 2019, and rather aim to direct 28% of all its funding towards climate action by 2020.
Meanwhile the UK’s Department for Work and Pensions (DWP) may soon allow pension fund trustees to divest the funds’ holdings in coal, oil and natural gas assets and re-invest in cleaner alternatives. This is despite the DWP asserting that profitable returns on investments will remain the key driver for trustees’ decisions – which could insulate them from pressure by members who are keen to steer the funds away from huge losses that may arise from an increasingly likely carbon bubble bust.