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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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Sustainable transport key to green energy shift

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With global transport at a crossroads, government leaders, industry experts, and civil society groups are meeting in Beijing, China, for a UN conference to chart the way forward to a more sustainable future for the sector, and greater climate action overall. 

The three-day UN Sustainable Transport Conference, which opened on Thursday, will examine how transportation can contribute to climate response, economic growth and sustainable development. 

It is taking place just weeks before the COP26 UN climate change conference in Glasgow, Scotland. 

In remarks to the opening, UN Secretary-General António Guterres underlined what is at stake. 

“The next nine years must see a global shift towards renewable energy. Sustainable transport is central to that transformation,” he said.  

The move to sustainable transport could deliver savings of $70 trillion by 2050, according to the World Bank.   

Better access to roads could help Africa to become self-sufficient in food, and create a regional food market worth $1 trillion by the end of the decade. 

Net-zero goal 

The COVID-19 pandemic has revealed how transport is “far more than a means of getting people and goods from A to B”, the UN chief said.

Rather, transport is fundamental to implementing the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change, both of which were “badly off-track” even before the crisis. 

The Paris Agreement aims to limit global temperature rise to 1.5 degrees Celsius, but the door for action is closing, he warned. 

“Transport, which accounts for more than one quarter of global greenhouse gases, is key to getting on track. We must decarbonize all means of transport, in order to get to net-zero emissions by 2050 globally.” 

A role for everyone 

Decarbonizing transportation requires countries to address emissions from shipping and aviation because current commitments are not aligned with the Paris Agreement. 

Priorities here include phasing out the production of internal combustion engine vehicles by 2040, while zero emission vessels “must be the default choice” for the shipping sector. 

“All stakeholders have a role to play, from individuals changing their travel habits, to businesses transforming their carbon footprint,” the Secretary-General said. 

He urged governments to incentivize clean transport, for example through regulatory standards and taxation, and to impose stricter regulation of infrastructure and procurement. 

Safer transport for all 

The issues of safety and access must also be addressed, the Secretary-General continued. 

“This means helping more than one billion people to access paved roads, with designated space for pedestrians and bicycles, and providing convenient public transit options,” he said. 

“It means providing safe conditions for all on public transport by ending harassment and violence against women and girls, and reducing deaths and injuries from road traffic accidents.” 

Making transport resilient 

Post-pandemic recovery must also lead to resilient transport systems, with investments going towards sustainable transport, and generating decent jobs and opportunities for isolated communities. 

“Public transport should be the foundation for urban mobility,” he said. “Per dollar invested, it creates three times more jobs than building new highways.” 

With much existing transport infrastructure, such as ports, vulnerable to extreme climate events, better risk analysis and planning are needed, along with increased financing for climate adaptation, particularly in developing countries. 

Mr. Guterres stressed the need for effective partnerships, including with the private sector, so that countries can work together more coherently. 

“The transformative potential of sustainable transport can only be unleashed if improvements translate into poverty eradication, decent jobs better health and education, and increased opportunities for women and girls. Countries have much to learn from each other,” he said. 

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Decisive action by governments is critical to unlock growth for low-carbon hydrogen

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Governments need to move faster and more decisively on a wide range of policy measures to enable low-carbon hydrogen to fulfil its potential to help the world reach net zero emissions while supporting energy security, the International Energy Agency says in a new report released today.

Currently, global production of low-carbon hydrogen is minimal, its cost is not yet competitive, and its use in promising sectors such as industry and transport remains limited – but there are encouraging signs that it is on the cusp of significant cost declines and widespread global growth, according the IEA’s Global Hydrogen Review 2021.

When the IEA released its special report on The Future of Hydrogen for the G20 in 2019, only France, Japan and Korea had strategies for the use of hydrogen. Today, 17 governments have released hydrogen strategies, more than 20 others have publicly announced they are working to develop strategies, and numerous companies are seeking to tap into hydrogen business opportunities. Pilot projects are underway to produce steel and chemicals with low-carbon hydrogen, with other industrial uses under development. The cost of fuel cells that run on hydrogen continue to fall, and sales of fuel-cell vehicles are growing.

“It is important to support the development of low-carbon hydrogen if governments are going to meet their climate and energy ambitions,” said Fatih Birol, the IEA Executive Director, who is launching the report today at the Hydrogen Energy Ministerial Meeting hosted by Japan. “We have experienced false starts before with hydrogen, so we can’t take success for granted. But this time, we are seeing exciting progress in making hydrogen cleaner, more affordable and more available for use across different sectors of the economy. Governments need to take rapid actions to lower the barriers that are holding low-carbon hydrogen back from faster growth, which will be important if the world is to have a chance of reaching net zero emissions by 2050.”

Hydrogen is light, storable and energy-dense, and its use as a fuel produces no direct emissions of pollutants or greenhouse gases. The main obstacle to the extensive use of low-carbon hydrogen is the cost of producing it. This requires either large amounts of electricity to produce it from water, or the use of carbon capture technologies if the hydrogen is produced from fossil fuels. Almost all hydrogen produced today comes from fossil fuels without carbon capture, resulting in close to 900 million tonnes of CO2 emissions, equivalent to the combined CO2 emissions of the United Kingdom and Indonesia.

Investments and focused policies are needed to close the price gap between low-carbon hydrogen and emissions-intensive hydrogen produced from fossil fuels. Depending on the prices of natural gas and renewable electricity, producing hydrogen from renewables can cost between 2 and 7 times as much as producing it from natural gas without carbon capture. But with technological advances and economies of scale, the cost of making hydrogen with solar PV electricity can become competitive with hydrogen made with natural gas, as set out in the IEA’s Roadmap to Net Zero by 2050.

Global capacity of electrolysers, which produce hydrogen from water using electricity, doubled over the last five years, with about 350 projects currently under development and another 40 projects in early stages of development. Should all these projects be realised, global hydrogen supply from electrolysers – which creates zero emissions provided the electricity used is clean – would reach 8 million tonnes by 2030. This is a huge increase from today’s level of less than 50 000 tonnes – but remains well below the 80 million tonnes required in 2030 in the IEA pathway to net zero emissions by 2050.

Practically all hydrogen use in 2020 was for refining and industrial applications. Hydrogen can be used in many more applications than those common today, the report highlights. Hydrogen has important potential uses in sectors where emissions are particularly challenging to reduce, such as chemicals, steel, long-haul trucking, shipping and aviation.

The broader issue is that policy action so far focuses on the production of low-carbon hydrogen while the necessary corresponding steps that are required to build demand in new applications is limited. Enabling greater use of hydrogen in industry and transport will require much stronger policy measures to foster the construction of the necessary storage, transmission and charging facilities.

Countries with hydrogen strategies have committed at least USD 37 billion to the development and deployment of hydrogen technologies, and the private sector has announced additional investment of USD 300 billion. But putting the hydrogen sector on path consistent with global net zero emissions by 2050 requires USD 1 200 billion of investment between now and 2030, the IEA estimates.

The Global Hydrogen Review lays out a series of recommendations for near term-action beyond just mobilising investment in research, production and infrastructure. It highlights that governments could stimulate demand and reduce price differences through carbon pricing, mandates, quotas and hydrogen requirements in public procurement. In addition, international cooperation is needed to establish standards and regulations, and to create global hydrogen markets that could spur demand in countries with limited potential to produce low-carbon hydrogen and create export opportunities for countries with large renewable energy supplies or large CO2 storage potential. 

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IRENA and SolarPower Europe Strengthen Coordinated Actions in the Solar Industry

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The International Renewable Energy Agency (IRENA) and SolarPower Europe are strengthening their cooperation by signing a partnership agreement.  As a member of the IRENA Coalition for Action since 2014, SolarPower Europe has been actively involved in various IRENA activities promoting the wider and faster uptake of renewable energy, including solar energy.

By leveraging on each other’s strengths, IRENA and SolarPower Europe aim to jointly advance progress towards a cleaner energy future. Signed by IRENA’s Director-General Francesco La Camera and SolarPower Europe’s CEO Walburga Hemetsberger, the agreement will allow both parties to coordinate and support the implementation of measures to scale up solar energy deployment globally and ensure a just and inclusive energy transition.

“Solar energy is now the cheapest source of electricity generation in many parts of the world and continues to contribute to the largest gains in renewable energy capacity globally. We need to leverage this momentum by maximising the sector’s potential through collective actions. Cooperation is key to expedite progress in realising IRENA’s 1.5°C scenario. By entering this agreement with SolarPower Europe, we hope to tap into the strengths and visions of multiple solar energy players, in particular from the private sector,” said Francesco La Camera, Director-General of IRENA.

Despite the COVID-19 pandemic, solar photovoltaic (PV) capacity reached almost 714 GW in 2020 globally, amounting to an increase of 20% from the previous year, and proving its competitiveness and resilience. Solar PV jobs reached 3.8 million in 2019 worldwide, representing almost a third of all renewable energy jobs. In the urban context, rooftop solar PV is a practical solution to increase access to affordable and reliable electricity for residential, commercial, industrial and public buildings, while also decarbonising the power systems. In many countries, solar PV continues to play a key role to achieve access to 100% electricity in line with the Sustainable Development Goals and broader climate objectives.

“As the cheapest and most easily deployed clean energy technology today, solar can significantly contribute to SDG 7, which aims to ensure energy for all by 2030. Globally, solar energy is continuing to break installation records, and is on track to reach Terawatt scale by 2022,” Walburga Hemetsberger, Chief Executive Officer of SolarPower Europe said. “With 70 per cent of current global power still generated from non-renewable polluting energy, we need much more ambition from policymakers to accelerate the clean energy transition. We look forward to working with IRENA to scale up global solar energy installation, which will help us meet the Paris Agreement targets.”

With this agreement, IRENA and SolarPower Europe will be able to exchange knowledge, data and information in an effort to support and strengthen domestic supply chains and investments in solar energy development. The two organisations will also collaborate to track and analyse latest trends in the private sector, including costs and innovations, as well as the socio-economic benefits of solar energy, to inform the policy decision-making process.

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