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ADB’s New Power Transmission Project Supports Electricity for All in Bangladesh

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The Asian Development Bank’s (ADB) Board of Directors has approved an assistance package totaling more than $357 million for a project to develop two power lines in support of Bangladesh’s national target of electricity for all by 2021.

The investments comprise a $350 million ADB loan, a $7 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM) to partially finance new high-technology energy efficient conductors, and a $500,000 grant from the Republic of Korea e-Asia and Knowledge Partnership Fund (EAKPF) to promote socially inclusive growth with gender equality.

“Bangladesh has been experiencing impressive economic growth over the last decade, but to maintain and even accelerate this, more investments are needed for the power transmission network to meet growing electricity demand,” said ADB Senior Energy Specialist Mr. Aiming Zhou. “In support of this, the ADB project will make the power transmission system more efficient, reliable, and environmentally friendly.”

Despite its recent economic success, Bangladesh continues to face major challenges. A top priority of the government is to address infrastructure deficiencies, including modern and affordable energy services, which face recurring shortages and ever-rising demand. About 35 million people in the country are without access to electricity. Inadequate transmission lines and substation transformer capacities in the southern and western regions are the main contributors to transmission bottlenecks. At the same time, construction of new transmission lines has become more challenging because of the high population density and limited rights-of-way.

The Southwest Transmission Grid Expansion Project builds on ADB’s previous work in the Bangladesh power sector, including the recently approved Rupsha 800 megawatt Combines Cycle Power Plant in the southwest region, to address continuing deficiencies in the transmission system through providing more efficient power transfer to the load centers of the southern and western zones.

The project will develop a 126 kilometer (km)-long 230 kilovolt (kV) transmission line from Barisal to Faridpur; and a 104 km-long 400 kV transmission line from Bogra to Rohanpur, along with substations, transformers, and associated extensions and connections.

The new transmission lines will introduce to Bangladesh a new type of high temperature conductor to allow more power transfer at lower energy losses. These have less resistance to power flow, higher power transferring capacity, and operate more reliably in tropical weather. In addition, the use of these conductors also helps to minimize right-of-way requirements.

The project is also contributing to climate change mitigation, since the new conductors reduce carbon dioxide emissions compared to conventional transmission conductors that are used in Bangladesh. This climate change mitigation accounts for $93 million of the investment, comprising $86 million from the ADB loan and $7 million from the JFJCM grant.

Under the EAKPF grant, the project will fund a scholarship program that will support women’s access to higher education and boost their job opportunities in the electricity industry.

The government will contribute $174.5 million toward the $532 million total cost of the project, which is due for completion at the end of June 2023.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.

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Power sector leads the way decarbonising the Irish energy sector

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Ireland has successfully advanced the transformation of its energy sector, led primarily by the power sector. In 2017, about a quarter of the country’s total power generation came from wind power, the third highest share among all 30 IEA member countries, according to the latest review of Ireland’s energy policies by the International Energy Agency.

The Irish electricity system can already accommodate up to 65% of variable wind and solar generation, without risking security of supply. This is one of the highest shares globally, and a testimony to the country’s innovation and research capacity.

Ireland’s overall energy system remains  heavily reliant on fossil fuels, and with energy consumption projected to rise with population growth, Ireland will need to meet its future energy needs through low-carbon and energy efficient solutions in order to keep carbon emissions in check. Ireland is not on course to meet its emissions reduction and renewable energy targets for 2020, which means that reaching its 2030 targets is also in question.

“Ireland has become a world leader in system integration of renewables thanks in large part to strong policies and commitment to innovation” said Paul Simons, IEA Deputy Executive Director, who presented the report in Ireland. “Building on this success, we advise the government to urgently implement additional measures and monitor  their  progress to get the country back on track to meet its long-term climate targets.”

Efforts to manage emissions could include building on the success of its broad set of existing energy efficiency policies and the many new policies that have come into force since 2017, supported by a substantial increase in funding. Ireland’s commitment to efficiency is highlighted by its decision to host the IEA’s 4th Annual Global Conference on Energy Efficiency in Dublin in June 2019.

Decarbonising heating in buildings is a particular challenge for Ireland because of a highly dispersed population living in single-family dwellings, which, compared to other IEA countries, still feature a high share of individual oil-heating systems. As Ireland has already achieved significant reductions in energy intensity, attention should now shift to switching from fossil fuels towards more renewable energy sources in heat production.

Since January 2019, all new buildings must install renewable energy systems to ensure that the expansion of the building stock does not lock-in carbon fuel consumption. Decarbonising heat in the existing building stock is more challenging; especially in the rental sector. In its report, the IEA recommends a two pronged strategy: complementing attractive financial incentives for landlords along with the introduction of minimum energy efficiency standards where needed.

Moving towards a low-carbon energy system will also ease concerns over Ireland’s security of supply, given its limited domestic hydrocarbon resources and geography that makes a full integration into larger European energy markets challenging.

Ireland is one of the few countries that taxes all carbon fuels, an effective instrument for reducing demand and enhancing energy efficiency. But the carbon tax rate has not changed since 2014 and, with rising living standards, its impact on customer behaviour is weakening. The IEA encourages the Irish government to introduce an automatic upward adjustment of the tax when pre-set emission targets are not met.

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IEA country review: Sweden is a leader in the energy transition

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Sweden is a global leader in building a low-carbon economy, with the lowest share of fossil fuels in its primary energy supply among all IEA member countries, and the second-lowest carbon-intensive economy.

Sweden has been successful in its energy transformation through market-based policies that focus on energy efficiency and renewable energy, notably CO2 taxation, which has helped drive decarbonisation across several sectors.

Sweden’s energy policy is also well-integrated with its climate objectives, according to the latest review of the country’s energy policies conducted by the International Energy Agency. In the 2016 Energy Agreement and the Climate Framework from 2017, Sweden set ambitious targets, including the long-term goal of zero net emissions by 2045. But additional action is needed to achieve these results, as the country’s total carbon emissions have been flat since 2013.

“Sweden has shown that ambitious energy transition policies can accompany strong economic growth” said Paul Simons, the IEA’s Deputy Executive Director. “With the Energy Agreement now in place, the time has come to implement a clear roadmap towards the long term target of carbon neutrality.”

The report pays special attention to transport-related emissions. This sector accounts for less than a quarter of Sweden’s final energy consumption, but over half of its energy-related CO2 emissions. Sweden has set a target to reduce transport emissions by 70% between 2010 and 2030.

The government has also introduced several new policies including a bonus/penalty system to support new low‑emission vehicles and measures to increase the use of biofuels. However, Sweden is not yet on a trajectory towards its 2030 target, and the IEA recommends that the government closely monitors developments,  and strengthens policy measures as needed.

The electricity system is another important element in Sweden’s energy transition. Sweden has largely decarbonised its electricity generation through investments in  nuclear power, hydropower, and most recently, other renewables. This is an important achievement that needs to be sustained. Sweden has not taken a formal position against the construction of new nuclear plants and most existing nuclear power plants are expected to run for the next several decades before being phased out. That said, there is little interest to invest in new reactors in the current market.  Meanwhile, Sweden has set an ambitious target of achieving 100% renewable electricity generation by 2040. The IEA recommends the government carefully assess how to reach that target and what the implications will be for grid stability and security of supply.

One key factor for maintaining a secure electricity supply is the regional power market. Sweden is well‑connected with its Nordic and Baltic neighbours and has become a large net exporter of  electricity. As the share of wind power continues to increase, supported by green electricity certificates, regional trade becomes even more important.

“The Nordic power market is an excellent example of how countries can benefit from closer collaboration,” said Mr Simons. “We recommend further market integration to support the continued energy transition in the region.” 

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ADB Expands Circular Economy With SUS’s Low Carbon Eco-Industrial Parks In China

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ADB signed a $100 million loan with Shanghai SUS Environment Company Limited, to support low-carbon eco-industrial park waste-to-energy projects in the People’s Republic of China. Photo: ADB

The Asian Development Bank (ADB) signed a $100 million loan with Shanghai SUS Environment Company Limited (SUS) to finance a portfolio of innovative and socially inclusive waste-to-energy (WTE) facilities within low carbon eco-industrial parks (EIPs) in the People’s Republic of China (PRC).  

This marks ADB’s first eco-industrial park waste-to-energy project. The project will utilize state-of-the-art incineration and emission treatment technologies, treat municipal solid waste (MSW) sustainably, supply clean electricity to the grid, and have the potential to supply power and steam to treat different types of waste within the EIPs. 

ADB’s loan to SUS will expand the PRC’s low-carbon circular economy and make cities more livable, through integrated urban waste management systems. The project will mitigate climate change through increased renewable energy generation and reduction of landfill-generated methane.

“SUS is a pioneer in the PRC’s environmental protection industry. SUS’s waste-to-energy facilities can meet stringent air emissions standards, recycle resources within the eco-industrial parks, and are community centric with its onsite waste museums and artistic architectures,” said Infrastructure Finance Division Director for Southeast Asia, East Asia, and the Pacific at ADB’s Private Sector Operations Department Mr. Jackie Surtani. 

“The cooperation with ADB will help SUS to accelerate the development of multiple projects and enable us to provide better services to the people and government where WTE projects are needed. SUS welcomes this unique opportunity to establish a long-term partnership with ADB,” said Mr. Long Jisheng, SUS Chairman and Chief Executive Officer.

The PRC is the world’s largest producer of MSW, generating about 215 million tons in 2017. This is expected to increase to 500 million tons per year by 2025. The facilities to be financed under this project will utilize clean and state-of-the-art incineration technology to process about 4,800 tons of MSW per day. Overall, the WTE facilities will treat 1.75 million tons of MSW, generate 437.5 gigawatt-hours of clean energy, and reduce carbon dioxide equivalent emissions by about 1.17 million tons annually.

The project will also generate 150 new jobs, including over 30 new jobs to women in operations and open career opportunities through technical training to female staff.

Established in 2008, SUS is a leading environmental protection company headquartered in Shanghai. SUS provides equipment and design capacity for grate incineration technology for WTE plants and develops and operates WTE plants and eco-industrial parks in the PRC. SUS is a licensee of Hitachi Zosen Corporation, a leading global WTE engineering company with more than 820 WTE units in commercial operations globally. CITIC Private Equity Funds Management Co., Ltd. invested in SUS in 2014 and is SUS’s largest shareholder.

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