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ADB Signs Deal to Enhance Energy Connectivity in Afghanistan

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The Asian Development Bank (ADB) today signed a memorandum of understanding (MOU) for a series of energy projects, which will help Afghanistan enhance energy security and efficiency, boost energy supply, and strengthen the country’s cross-border trade in energy.

Afghanistan President Mr. Mohammad Ashraf Ghani witnessed the MOU signing held in Kabul, along with ADB Country Director for Afghanistan Mr. Samuel Tumiwa, cabinet ministers, and members of parliament. The total amount of the proposed projects is $200 million, which includes $106 million from ADB’s Special Funds and $94 million in cofinancing from the Afghanistan Infrastructure Trust Fund, established in December 2010 to provide funding for the country’s infrastructure requirements.

“Access to efficient and reliable power can help Afghanistan boost economic growth and create employment opportunities in the country,” said Mr. Tumiwa. “The projects, which have been signed, will help increase the electrification rate for Afghan households, businesses, and industry to unlock growth and income opportunities.”

Afghanistan relies on energy imports from neighboring countries to meet its domestic demand. Despite significant progress since 2002, only about 32% of the population has access to grid-connected electricity, which increases the cost of doing business and is detrimental to the environment.

The proposed projects include the construction of a new 500-kilovolt (kV) transmission line from Surkhan to Dasht-e-Alwan; upgrading of Arghandi 500 kV substation and the construction of additional 3 x 500 kV lines bays at Dasht-e-Alwan and Arghandi substations; construction of 220 kV transmission line from Herat to Shendand and 220/20 kV substation at Shendand; construction of 220 kV transmission line from Shendand to Farah and 220/20 kV substation at Farah; construction of 110 kV transmission line from Herat to Ghor and 110/20 kV substation in Ghor; and the construction of 220 kV transmission from Mazar IPP to grid.

ADB is Afghanistan’s largest development partner in the energy sector with cumulative grant assistance of nearly $2.2 billion, all of which is on budget with the government. Over the coming years, ADB will support the increase in the country’s electrification rate from 30% to 83% and lift the share of domestic generation from 20% to 67% by 2030. ADB also play a major role in power transmission both regionally and domestically, and promote clean energy, including through solar power.

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Seven Countries Account for Two-Thirds of Global Gas Flaring

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In an unprecedented year for the oil and gas industry, oil production declined by 8% in 2020, while global gas flaring reduced by 5%, according to satellite data compiled by the World Bank’s Global Gas Flaring Reduction Partnership (GGFR). Oil production dropped from 82 million barrels per day (b/d) in 2019 to 76 million b/d in 2020, as global gas flaring reduced from 150 billion cubic meters (bcm) in 2019 to 142 bcm in 2020. Nonetheless, the world still flared enough gas to power sub-Saharan Africa. The United States accounted for 70% of the global decline, with gas flaring falling by 32% from 2019 to 2020, due to an 8% drop in oil production, combined with new infrastructure to use gas that would otherwise be flared.

Gas flaring satellite data from 2020 reveals that Russia, Iraq, Iran, the United States, Algeria, Venezuela and Nigeria remain the top seven gas flaring countries for nine years running, since the first satellite was launched in 2012. These seven countries produce 40% of the world’s oil each year, but account for roughly two-thirds (65%) of global gas flaring. This trend is indicative of ongoing, though differing, challenges facing these countries. For example, the United States has thousands of individual flare sites, difficult to connect to a market, while a few high flaring oil fields in East Siberia in the Russian Federation are extremely remote, lacking the infrastructure to capture and transport the associated gas.

Gas flaring, the burning of natural gas associated with oil extraction, takes place due to a range of issues, from market and economic constraints, to a lack of appropriate regulation and political will. The practice results in a range of pollutants released into the atmosphere, including carbon dioxide, methane and black carbon (soot). The methane emissions from gas flaring contribute significantly to global warming in the short to medium term, because methane is over 80 times more powerful than carbon dioxide on a 20-year basis.

“In the wake of the COVID-19 pandemic, oil-dependent developing countries are feeling the pinch, with constrained revenues and budgets. But with gas flaring still releasing over 400 million tons of carbon dioxide equivalent emissions each year, now is the time for action. We must forge ahead with plans to dramatically reduce the direct emissions of the oil and gas sector, including from gas flaring,” said Demetrios Papathanasiou, Global Director for the Energy and Extractives Global Practice at the World Bank.

The World Bank’s GGFR is a trust fund and partnership of governments, oil companies, and multilateral organizations working to end routine gas flaring at oil production sites around the world. GGFR, in partnership with the U.S. National Oceanic and Atmospheric Administration (NOAA) and the Colorado School of Mines, has developed global gas flaring estimates based upon observations from two satellites, launched in 2012 and 2017. The advanced sensors of these satellites detect the heat emitted by gas flares as infrared emissions at global upstream oil and gas facilities.

“Awareness of gas flaring as a critical climate and resource management issue is greater than ever before. Almost 80 governments and oil companies have committed to Zero Routine Flaring within the next decade and some are also joining our global partnership, which is a very positive development. Gas flaring reduction projects require significant investment and take several years to produce results. In the lead-up to the next UN Climate Change conference in Glasgow, we continue to call upon oil-producing country governments and companies to place gas flaring reduction at the center of their climate action plans. To save the world from millions of tons of emissions a year, this 160-year-old industry practice must now come to an end.” said Zubin Bamji, Program Manager of the World Bank’s GGFR Partnership Trust Fund.

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IEA supports Indonesia’s plans for deploying renewable energy

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The IEA is carrying out a large work programme on power system enhancement with the Government of Indonesia to help it modernise the country’s electricity sector, including support for overcoming challenges inherent in integrating variable renewables like wind and solar PV.

As part of the work programme, the IEA hosted a series of webinars in early 2021 where Indonesia’s Ministry of Energy and Mineral Resources and national power utility PLN could learn from other countries’ experiences of integrating and setting targets for variable renewable energy.

An introductory session on the principles of integrating renewable energy was held ahead of the country specific sessions. In this session, the IEA presented its framework for renewable integration phases to the Ministry and PLN, highlighting the different challenges often faced during renewable integration as well as what flexibility options can be deployed to tackle these challenges.

In the first country session, IEA presented the main findings of the Thailand flexibility study that the Agency carried out in cooperation with EGAT, the Thai electricity utility. The study shows that Thailand has the technical capability to integrate larger shares of variable renewables, but that the lack of commercial flexibility is a major barrier for operating the power system in a more flexible way and thus is the main obstacle for integrating large amounts of renewables.

In the second country session, the Danish Energy Agency presented its work programme with the Government of Viet Nam. The sessions focused on important aspects for integration of renewables, such as the assessing the needs and implications of reserves and forecasting. The session also included a discussion on the main learning points from the boom in rooftop solar that Viet Nam has experienced in 2020. 

The third and last country session was on India. The IEA presented both national as well as state-level modelling in order to show some of the contextual differences between national models and models that focus on specific geographical regions. In India, the spot market accounts for only 10% of electricity generation, which shows that India, like Thailand, has some issues with commercial flexibility. The discussion also covered India’s level of dependency on physical power purchase agreements and its impacts on the flexibility of the power system.

All sessions were held behind closed doors to allow for an open discussion between the participating organisations on the issues of renewable integration and possible ways of addressing barriers. The IEA will continue the work with the Indonesian Ministry and PLN on this topic in order to facilitate a path towards a clean, affordable, secure and modern power sector in Indonesia.

This work in Indonesia is undertaken within the Clean Energy Transitions in Emerging Economies programme.

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Bangladesh Solar Home Systems Provide Clean Energy for 20 million People

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Bangladesh has the largest off-grid solar power program in the worldwhich offers experiences and lessons for other countries to expand access to clean and affordable electricity. By harnessing solar power, the program enabled 20 million Bangladeshis to access electricity.

The book, “Living in the Light- The Bangladesh Solar Home System Story”, launched today, documents how off-grid solar electrification was mainstreamed to a large segment of the population living in rural areas. Starting in 2003 as a 50,000 household pilot, the program at its peak, provided electricity to approximately 16 percent of the rural population.

“Bangladesh is known for its innovative development approaches. In remote and hard to reach areas, the government successfully introduced affordable off-grid renewable energy solutions through a public-private partnership. Clean electricity meant better health and living conditions for families and more study time for children,” said Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan. “Our partnership with the government for this program spans nearly two decades, and now our support has expanded to include other renewable energy options.”

Successive financing through the Rural Electrification and Renewable Energy Development (RERED) Project, the World Bank supported the Infrastructure Development Company Ltd (IDCOL) to implement the program. IDCOL combined its expertise in infrastructure financing with Bangladesh’s pioneering work in micro-financing and private sector solar electrification initiatives to build a scalable off-grid electrification business model.  

“Our government is committed to driving up renewable energy and has a host of incentives such as tax breaks on offer to drive net-metered solar rooftop installation. As a business model Net Metering System is going to be popular day by day,” said Nasrul Hamid, Honorable State Minister, Ministry of Power, Energy and Mineral Resources, who attended the launching ceremony as the chief guest. He added, “Solar home systems (SHS) program has been critically important in achieving the ‘electricity for all’ vision. Under the leadership of  Hon’ble Prime Minister Sheikh Hasina, electrification of Grid area has already been completed and the whole country will be electrified within the ‘Mujib-year’.”

Between 2003 to 2018, the project reduced greenhouse gas (GHG) emissions by approximately 9.6 million tonnes of CO2 equivalent. The program helped reduce indoor air pollution by avoiding the consumption of 4.4 billion liters of kerosene.

“The RERED I and II projects promoted a sustainable market-driven approach where clean energy solutions were provided by local entrepreneurs with financing from IDCOL. 58 non-government organizations supplied and installed the solar home systems made affordable with micro-loans,” said Amit Jain, Senior Energy Specialist, World Bank and a co-author of the report. “The SHS Program demonstrated that millions of dollars mobilized at the international level can flow efficiently to the remotest corners of the country to offer loans in amounts as low as one hundred dollars, which enables a rural household to purchase a solar home system.”

Building on the success of the program, the World Bank extended support to scale up other clean renewable energy options including solar irrigation, solar mini-grids, roof-top solar, and solar farms. The World Bank financing in two consecutive RERED projects stands at $726 million.

The book analyzes the SHS Program’s organizational effectiveness, how partners were mobilized, how quality was enforced, how risks were mitigated, and how financial resources were raised and deployed as Bangladesh scaled up renewable energy use. It shares experiences and lessons that would be useful for other countries as they scale up solar off-grid electrification programs. 

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