Hedegaard applies pressure to development banks

10 July 2013, Power Engineering International

The momentum towards a world, or a Europe at least, where renewable power dominates was added to this week, when Connie Hedegaard said development banks ought to take “a lead role in eliminating public support for fossil fuels.”

The European Bank for Reconstruction and Development and the World Bank could be accused, in some circles, of continuing to be relatively more sympathetic to coal and gas power generation than to renewables, against the current grain.

And the stats back up that contention.

The report Invest in Haste, Repent at Leisure by CEE Bankwatch Network, SEE Change Net and the WWF, said that these banks are spending 32 times more on fossil fuels than clean energy sources, other than hydropower in the Western Balkans region.

Hedegaard said, “According to the International Energy Agency, fossil fuel subsidies rose by almost 30 per cent, to $523bn, in 2011. Meanwhile, the UN Environment Programme reports that global investment in renewable energy totalled only $257bn in 2011.In other words, we are doing exactly the opposite of what we should be doing.”

The EBRD has said it would state more specific criteria for coal power plants but that it feels ‘neutral’ over shale gas.

“We’re neither enthusiastic nor allergic to the technology per se, and if it proves commercially viable, with all environmental concerns properly addressed, I don’t think there will be any issues with financing it”, said an EBRD representative.

The European Investment Bank (EIB) also announced a review of lending energy policies but the commissioner’s public call on lenders to prioritise renewables means a continuing pressure is being applied to these institutions that will be difficult to ignore.

Hedegaard added, “Multilateral lenders can lead by example by restricting conditions for public financing of coal, the most damaging fossil fuel, and by pressing for greater transparency in reporting on emissions. Encouraging investments in renewable energy and increased energy efficiency will have the added benefit of boosting long-term self-reliance and resilience against the volatility of fossil fuel prices.”

Now that the banks have been so publically reminded of their ethical responsibilities it has made the European financial climate that little bit colder for fossil fuel powered generators.

Now that the issue has been so prominently verbalised the banks continued support, despite the growing shift to renewables, can no longer so easily be assured.