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World Bank to Help Scale Up Renewable Energy Options in Nepal

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The World Bank today approved Strategic Climate Fund (SCF) Grant in the amount of $5.61 million and SCF Loan in the amount of $2 million to help Nepal diversify its energy sources to renewables. The SCF grant and credit support the Private Sector-Led Mini-Grid Energy Access Project, which aims to mobilize energy-service companies in selected regions of the country to increase capacity of renewable energy mini-grids.

“One component of the project will provide credit facility to the private sector to support renewable mini-grid sub-projects, and help this sector prosper and expand,” said Subodh Adhikari, World Bank Senior Energy Specialist and Task Team Leader of the Project. “The second component will provide technical assistance to the mini-grid sector, energy-service companies and partner banks to ensure smooth and sustainable implementation,” he added.

The Project is aligned to the efforts of the Government of Nepal to address barriers to private sector participation in the renewable energy mini-grid sector. The Project will aim to address these barriers by successfully demonstrating new approaches that will promote public-private partnerships (PPPs). Private entities and cooperatives will be mobilized to provide electricity services to rural areas as “energy service companies” (ESCOs). These specialized ESCOs will crowd-in the necessary technical expertise and financing capacity to develop, build, own and operate renewable mini-grid projects. They will have access to better credit terms and stronger project development support through the Project.

“This Project will tap into the vast business opportunities and technical potential for the private sector to provide more efficient and sustainable energy services in Nepal,” said Faris Hadad-Zervos, World Bank Country Manager for Nepal. “It is directly linked to the Government of Nepal’s effort for greater private sector management and commercial financing through public-private partnerships, and the World Bank’s mission of maximizing all financial opportunities for development,” he added.

The Project aims to improve the overall energy supply situation in Nepal by promoting renewable energy solutions, including the opportunities to capture private sector efficiencies through PPPs. This is consistent with the World Bank Nepal’s Country Partnership Framework, that has identified unavailability of energy supply to be one of the major obstacles in investment, productivity, and livelihood opportunities. To combat this, the Project will introduce conditions to gradually shift from subsidized model to a commercial business model in mini-grids, pushing for a vibrant and long-term energy market.

While enhancing the market, the Project ultimately aims to support rural residential and nonresidential customers, who will gain access to new or improved energy services in rural areas through renewable energy mini-grids.

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Unprecedented momentum for green hydrogen

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photo: IRENA

Hydrogen from renewable energy could play a central role in the global energy transformation, the latest report by the International Renewable Energy Agency (IRENA) finds. ‘Hydrogen: a renewable energy perspective’ estimates that hydrogen from renewable power, so called green hydrogen, could translate into 8 per cent of global energy consumption by 2050. 16 per cent of all generated electricity would be used to produce hydrogen by then. Green hydrogen could particularly offer ways to decarbonise a range of sectors where it is proving difficult to meaningfully reduce CO2 emissions.

Decarbonisation impacts depends on how hydrogen is produced. Current and future sourcing options can be divided into grey (fossil fuel-based), blue (fossil fuel-based production with carbon capture, utilisation and storage) and green (renewables-based) hydrogen. Blue and green hydrogen can play a role in the transition and synergies exist.

Falling renewable power cost and falling capital cost for electrolyzers is creating an economic case for green hydrogen

With falling cost of renewables, the potential of green hydrogen particularly for so called ‘hard-to-decarbonise’ sectors and energy-intensive industries like iron and steel, chemicals, shipping, trucks and aviation is rapidly becoming more compelling given the urgency to limit CO2 emissions. This includes direct hydrogen use but also the production of liquid and gaseous fuels such as ammonia, methanol and synthetic jet fuel from green hydrogen. Electrolyzer deployment is currently ramping up from MW to GW-scale as witnessed by dozens of projects worldwide.

Large-scale adoption of hydrogen could also fuel an increase in demand for renewable power generation, IRENA’s report finds. In total, IRENA sees a global economic potential for 19 exajoule (EJ) of hydrogen from renewable electricity in total final energy consumption by 2050. This translates into around 4-16 terawatts (TW) of solar and wind generation capacity to be deployed to produce renewable hydrogen and hydrogen-based products in 2050.

However, deployment of hydrogen-based solutions will not happen overnight, IRENA’s report cautions. Hydrogen might likely trail other strategies such as electrification of end-use sectors, and its use will target specific applications. The need for a dedicated new supply infrastructure may also limit hydrogen use to certain countries that decide to follow this strategy. Existing natural gas pipelines could be refurbished, but implications must be further explored.

Low-carbon, clean hydrogen should be understood as part of a larger energy transition effort

Green hydrogen could make a substantial contribution to the energy transition in the long run. The report recommends acknowledging the strategic role of hydrogen in the transition and at the same time calls on governments and private sector to better understand energy system benefits, cost-reduction and investment requirements to tap into the potential of a hydrogen future.

Download IRENA’s report ‘Hydrogen: a renewable energy perspective’. 

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Ramp up nuclear power to beat climate change

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Without significantly increasing the use of nuclear power worldwide, it will be difficult to achieve the goal of reducing harmful emissions and fighting climate change, the head of the International Atomic Energy Agency (IAEA), said on Monday.

Cornel Feruta, the acting Director-General of the agency, was speaking in Vienna, at the opening of the first-ever International Conference on Climate Change and the Role of Nuclear Power.

It brought together some 550 participants from 79 countries, and 18 international organizations, to exchange science-based information, and hold objective discussions on the role of nuclear power in mitigating the climate crisis.

The IAEA pointed out that nuclear power contributes around one-third of all low carbon electricity, producing practically no greenhouse gases, and some 10 per cent of the total electricity produced worldwide.

Radioactive waste and security concerns must be addressed

However, the IAEA accepted that there are persistent public concerns about the potential dangers to health and the environment caused by radioactive waste from nuclear plants, and Mr. Feruta said that advances concerning the disposal of such material may alleviate fears about the long-term sustainability of the energy source.

Also speaking at the event, Mr. Liu Zhenmin, the Under-Secretary-General for Economic and Social Affairs (DESA), echoed Mr. Feruta’s remarks, and said that the problem of radioactive waste is an “unresolved issue” that needs to be addressed.

In his keynote address, Mr. Zhenmin also raised nuclear safety, which he described as “a significant public concern, especially after the Fukushima accidents and terrorism related fears”.

The large up-front costs of nuclear power remain an important issue, continued Mr. Zhenmin, and renewable energies, such as solar and wind, are continuing to drop in price, becoming increasingly competitive with conventional, fossil-fuel based sources. Meeting the capital costs of building nuclear plants will require government commitments, and public acceptance.

Nuclear technology’s ‘important role in society’

Nuclear technology plays an important and positive role in society, added Mr. Zhenmin. He outlined some of the benefits, such as monitoring pollution, and assisting in the diagnosis and treatment of cancers and other major diseases, and pointed out that radiation technology helps prevent food from spoiling, and to create new crop varieties, which supports climate change adaptation.

Both Mr. Feruta and Mr. Zhenmin referred to the work of the Intergovernmental Panel on Climate Change (IPCC), the UN body tasked with providing objective, scientific reports on the changing climate, which has shown that far-reaching changes to the way we produce energy must occur if we are to limit global warming to 1.5 degrees above pre-industrial levels.

In its various models for a sustainable energy future, the IPCC has included significant increases in nuclear power generation by 2050, ranging from a 59 per cent increase, to a 501 per cent rise.

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New IEA policy review offers recommendations for Estonia’s energy transition

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Estonia is on the brink of a major energy transition that will involve a substantial change in the role of domestically produced oil shale in its energy mix, the International Energy Agency said today in its in-depth review of the country’s energy policies.

Estonia’s energy supply is unique among IEA member countries because of its strong reliance on domestically produced oil shale, which dominates electricity generation. This provides the country with a high degree of energy independence, but it also gives Estonia the highest carbon intensity of all IEA countries. Oil shale, an energy-rich sedimentary rock, and the shale oil produced from it are different from light tight oil (sometimes also referred to as shale oil), which is produced from shale formations, often together with shale gas, in hydraulic fracturing. This is not done in Estonia.

In the future, Estonia’s transport and power sectors will need to shift to lower-carbon energy sources. Its industry is set to move towards extracting higher value from the country’s oil shale resources by producing more liquid fuels that also have environmental benefits.

“This transition represents a major economic and social challenge, and we recommend that it be supported by identifying cost-effective pathways for the decarbonisation of the energy sector,” said Dr Fatih Birol, the IEA’s Executive Director.

The in-depth review of Estonia’s energy policies is the first by the IEA since the country became the 29th member of the organisation in 2014. The report discusses the energy challenges Estonia faces and recommends possible solutions to help it to achieve a secure and sustainable energy future.

Estonia made strong progress in the deployment of wind power until 2015, but significant administrative barriers have since emerged. As wind power is likely to be the lowest-cost technology for future large-scale renewable energy projects in Estonia, the IEA encourages the government to quickly address the barriers to its deployment. 

“I congratulate Estonia on already achieving its mandatory EU emissions reduction and renewable energy targets for 2020,” Dr Birol said. “The IEA believes that reaching the ambitious targets for 2030 can be possible but requires more determined action, taking economic and energy security considerations into account.”

Estonia’s main challenge in the transition to a cleaner energy future – one shared by many IEA countries – is the decarbonisation of its transport sector, which is currently not on track to meet short-term emissions and energy efficiency targets. The IEA recommends that the government review the energy taxation of all fuels to better reflect their carbon content. That would accelerate the switch to low emission technologies, notably in the transport sector.

Following the expansion of regional energy infrastructure and improved cooperation between Estonia and its EU neighbours, the country is now firmly embedded in the European energy system, which brings significant energy security benefits. Instead of pursuing energy independence as a major energy policy target, the IEA recommends that Estonia work with its EU neighbours to prioritise the identification of market-based solutions to diversify supply and enhance security of supply.

Today, Estonia’s level of electricity interconnection is already substantially higher than the target set for EU countries. The expected synchronisation of the Baltic electricity grid with the continental European grid by 2025 will further increase Estonia’s security of electricity supply. This will also alleviate any potential supply concerns arising from the expected reduction of electricity generation from oil shale.

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