ADB surpasses clean energy investment target for 5th year

MANILA, Philippines – Manila-based Asian Development Bank (ADB) has surpassed for the fifth straight year, its annual investment target in clean energy, indicating an economic cycle where new forms of renewable energy are starting to out-compete fossil fuel-based power production.

In its 2015 Clean Energy Investments Project Summaries report, the multilateral lending institution said it invested $2.47 billion in clean energy last year, above its $2 billion annual target. This, ADB said, was driven by continuing efforts in developing Asian nations to prioritize the establishment of clean energy solutions.

At this level, investment in clean energy comprised 61 percent of ADB’s investment target for the mitigation of the ill-effects of climate change.

Out of the total investments in clean energy in 2015, 66.1 percent was made in the public sector. The bulk of the amount (55.3 percent) was provided as financial support to proponents of energy efficiency projects and 33.8 percent was provided to developers of renewable energy systems.

“Demand for clean energy is high, and the global agreements should trigger an expansion in its development,” ADB said, referring to the climate pact in Paris last year and the adoption of the Sustainable Development Goals.

“The year 2015 was marked by major global agreements with the potential to change the clean energy landscape in revolutionary ways….Clean energy, in the form of renewable power and power efficiency, will play a major component in this, as a way to reduce emissions generated through electric generation,” the ADB added.

Last year, ADB pledged to increase its annual financing for climate change mitigation and adaptation projects to $6 billion by 2020. Out of this amount, $4 billion would be allocated for projects meant to mitigate the impact of climate change such as renewable energy systems, energy efficiency projects, transport initiatives, and projects for the creation of green cities.

“While ADB cannot predict what its clean energy investments will look like over the next five to 10 years, it is aware that clean energy’s potential has barely been tapped in Asia and the Pacific region,” it said.

The bank noted that an analysis of the levelized cost of onshore wind and solar photovoltaic energy showed these renewable energy sources are “fully competitive” with coal across the lifetime of a power plant.

“A cycle where new renewables slowly out-compete fossil fuel generation, and create a market where it becomes more economical to develop renewables and less economical to back fossil fuel plants, may have already begun,” said ADB.

The bank said developing countries in the Asia Pacific region are seen to grow their use of clean energy solutions despite prevailing challenges in policy, questions of economics and limitations of technology.

“Beyond its financing targets, ADB pledges to aid the developing countries of Asia and the Pacific region in overcoming any and all of the barriers preventing greater adoption of clean energy,” said ADB.

Among the clean energy projects given financing by ADB last year include the 150-megawatt (MW) Burgos Wind Farm Project of EDC Burgos Wind Power Corp. and the Tiwi-Makban Geothermal Power Green Bonds Project of Aboitiz Power Corp.

President Aquino recently ordered a sweeping review of the country’s energy policy to steer the country away from coal-based power generation.

The Chief Executive signed on May 18 a resolution of the Climate Change Commission for a six-month comprehensive review of the country’s energy policy and energy mix with the goal of pursuing a low carbon development pathway and attaining climate change mitigation targets.

This would help the government set a clear policy on coal-fired power plants, which are the biggest sources of man-made carbon emissions, accounting for about 35 percent of global greenhouse gas emissions.

This would also pave the way for a swift transition to renewable energy, enhance energy efficiency and conservation, and ensure clean, affordable and reliable energy for the entire country.

Aquino ordered the Department of Environment and Natural Resources, the Department of Energy and the National Economic Development Authority to harmonize policies and regulations on new and existing coal-fired power plants and assess their impacts on the environment.

The departments were also told to include low-carbon development and climate change adaptation and mitigation strategies in the formulation of all national and local development plans.