Financing Advanced, Low-Emission Coal-Fired Power Generation Technologies and Carbon Capture and Storage Projects. Annika Seiler November 18, 2013

Transcription

1 Financing Advanced, Low-Emission Coal-Fired Power Generation Technologies and Carbon Capture and Storage Projects Annika Seiler November 18, 2013

2 Disclaimer The views expressed in this presentation are the views of the ADB mission members and DO NOT necessarily reflect the views or policies of the Asian Development Bank, its Board of Director or the Governments they represent.

3 Content Introduction to ADB Rising Reliance on Coal for Power Generation in the Asia Pacific Region ADB s Approach to Financing Coal Fired Power Plants Examples of ADB s Support to Low-Emission Coal Technologies ADB s support to Carbon Capture and Storage Demonstration in Asia

4 4 Asian Development Bank An Introduction ADB s Vision: Asia Pacific Region Free of Poverty ADB s Strategic Direction: Founded in 1966 with Headquarters in Manila 67 Member countries with 26 country offices With a triple A credit rating, ADB is mobilizing low-cost funds for development In 2012, ADB assistance totaled $21.57 billion including $13.30 billion financed by ADB and $8.27 billion in co-financing

5 Status of Electricity Access in Developing countries of Asia and the Pacific Region, 2010 About 675 million people still suffer from a lack of access to electricity. An incremental generation capacity of additional 125 GW is needed to achieve MDG

6 Coal Demand For Power Generation and CO 2 Emission for Developing Asia, Electricity demand is projected to double between 2010 and Investments in coalfired power plants are a strategic choice for policy makers to strengthen energy security, also in traditionally non-coalbased economies. Source: Asian Development Bank estimates, Expansion of coal-fired generation pose major concerns for environmentally sustainable growth and climate change mitigation in ADB s DMC.

7 ADB s Energy Policy 2009 Objective: Assist ADB Developing Member Countries in providing to their population reliable, adequate, and affordable energy for inclusive growth in a socially and environmentally sustainable manner. ADB s Clean Energy Program target impact : First of all contribute to improved access to energy and energy security in DMCs and second decrease the rate of climate change. Tangible Outputs wrt cleaner coal & CCS technologies: Investments in clean energy projects: $1 billion p.a. up to 2013 & $2 billion p.a. from 2013 onwards & leverage public & private sector CE investments Deployment of new technologies with strong demonstration effect Approaches to promote clean energy / CCS introduced; Barriers to clean energy/ccs technology investments lowered.

8 ADB s Approach to Financing Coal fired Power Plants (CFPP) ADB s Energy Policy 2009 allows for financing of retrofitting of CFPP for improving efficiency, reliability, and operating life and to comply with current higher environmental standards; new plants under the condition As a minimum super-critical, wherever feasible Improvement of Energy Security Ongoing policy-dialogue with relevant government

9 Examples of CFPP Projects Co-Financed by ADB over the past 10 years Coal Mine Methane (CMM) Development, PRC, $187.4m, 2004 Demonstration of CMM for power generation (120 MW CMM power plant) and urban residential gas supply NTPC Capacity Expansion Facility, India, 2006 Construction of India s first super-critical power plant Mong Duong 1 Thermal Power, Vie, $930.71m, 2007 and 2010 Construction of low emission CFPP using CFB boiler technology Tianjin IGCC Power Plant Project, PRC, $140m, 2010 Construction of first IGCC in developing Asia ADB supports first of its kind technologies in its member countries to support development of advanced, low emission technologies, instil sound environmental management and other safeguard practices

10 ADB s Approach to foster low emissions coal fired power generation technologies Capacity development Loan projects Policy dialogue & consultation ADB seeks to pave the way for low emission technologies and promote environmentally sustainable investment decisions by financing demonstration projects, engaging in policy dialogue and strengthen capacity of relevant stakeholders

11 ADB CCS Fund In June 2009, ADB established a CCS Fund with an initial contribution of AUD 21.5 million from the Global CCS Institute, Australia. In 2012, Government of the United Kingdom also pledged 35 million in the fund. Specific Eligibility Criteria Accelerate demonstration of CCS technologies Identify, lower and / or eliminate general or country specific barriers for CCS demonstration Identify, eliminate or mitigate risks in capture, transport and storage technology demonstration

12 Barriers to CCS in Developing Countries Low Policy Priority for DMC governments Storage exploration is a long expensive process; not much information is in public domain Existing institutional setup in developing countries do not match the requirements of the whole CCS chain Unfair comparison with without CCS power plants; CCS is not included in the developing countries low-carbon technology portfolio No economic drivers / Commercial gap due to High LCOE Gaps in regulatory framework Lack of fiscal and financial support mechanisms Fuel subsidies & no carbon penalty Insufficient commercial & public financing facilities Public Awareness

13 CCS in Developing Asia ADB s Approach and Activities Partnerships: ADB is a stakeholder in the CSLF member of the Global CCS Institute Assessing the Potential for CCS Assessing potential and providing initial strategic assessment in PRC South East Asian Economies Target initial activities in large coal-based economies: Capacity strengtheni ng, technology roadmaps and policy advisory services for key policy makers and major energy groups in the PRC Financing of CCUS pilot plant: Supporting CCS pilot testing and demonstrati on in the PRC and Indonesia; Grant support to

14 ADB Approach to Support CCS Development in the PRC Upstream analysis and pilot testing of available technologies for energy companies and dissemination of lessons learnt: Strengthen Capacity of Datang International to assess, pilot-test, and apply postcombustion method in gas-fired power plant and to establish CCSready criteria power plants Precombustion CCS Postcombustion CCS Financial and technical assistance to China Huaneng Group to study the technology, build and operate an IGCC power plant with a CCUS Oxyfuelcombustion CCS Assess feasibility and establish technical standards for a 200MW demonstration coal-fired power plant 14

15 ADB Approach to Support CCS Development in the PRC Establishing an Enabling Environment for CCS Demonstration: Policy & regulatory framework: ADB is working with the National Development and Reform Commission to formulate a comprehensive roadmap, policy, and regulations to enable CCS demonstration and deployment Business Models: ADB in consultation with major oil, gas, coal mining, and power industries seeks to identify and facilitate joint ventures for early stage demonstration projects Knowledge transfer: ADB organizes international conferences or site visits for PRC stakeholders to facilitate knowledge sharing and exchange on good practices in CCS development 15

16 Conclusions Coal is and will be a key energy security solution to the region but environmental foot print of coal usage especially from power plants must be reduced Advanced, low-emission coal-fired generation technologies will have to be demonstrated and deployed, and innovations in clean coal technologies have to be advanced. Development banks can support change to business as usual (sub-critical) CFPP development by financing highly efficient coal-based power plants fostering CCS demonstration & deployment

17 For more information please contact: Annika Seiler, Finance Specialist (Energy) Address: 6, ADB Avenue Mandaluyong City 1550 Metro Manila, Philippines Tel: Web site: