Germany pledges to end development funding of new coal plants

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The German government is to end development financing for new coal-fired power plants. The decision was announced at the UN Climate Change Summit in New York last week.

However the head of the IEA's Clean Coal Centre, Dr Andrew Minchener told Power Engineering International that such moves to stop funding clean coal initiatives are 'self-defeating.'

Germany’s Environment minister Barbara Hendricks made the announcement, one of several that will have varying impacts on the power generation scene, if delivered.

Barbara Hendricks

General Manager of the International Energy Agency’s Clean Coal Centre, Dr Andrew Minchener OBE pointed out to Power Engineering International that Germany wasn’t completely shutting down its coal-funding activities.

“It is understood that ‘this limitation will apply to development finance only and that it does not apply to the finance provided through IPEX, the export credit subsidiary of the government bank KfW’. In the past, more than half of such government-backed financing for coal overseas went via IPEX. So despite the announcement, the government appears not to have ruled out financing new coal power stations overseas.”

Dr Minchener re-asserted to PEi the importance of coal to maintaining the overall power balance, and of the necessity of continuing clean coal initiatives as a realistic approach, given the developing world’s continuing reliance on it.

“Despite the adverse rhetoric at these climate change events, it is important that people understand that coal provides the bridge towards a stronger renewables future, as part of a balanced energy mix. The world will need all energy sources to meet future demands and for coal that should mean advanced clean coal technology, ultimately with the inclusion of CCS where circumstances permit.”

“Most developing nations will choose coal power as it offers a reliable way out of energy poverty. The key is to ensure that they have the means to install high efficiency low emissions (HELE) coal power plant, thereby providing strong solutions for energy access that will improve health and quality of life in such countries.”

“The actions of many lenders in choking off financial support for such advances is proving self-defeating. The coal power plants will still be built but if finance from other sources proves a more expensive option then the plant will have less efficient systems and lower standard environmental controls.  Consequently, it is to be hoped that the German government will continue to support the financing of new coal plants as they are then in a position to ensure the adoption of the HELE type approach.”

Meanwhile other countries at the New York event also made pledges outlining how they will tackle the question of emissions.

China’s vice premier Zhang Gaoli said that the country aims to peak its emissions “as early as possible” without committing to a specific timeframe. He is the highest ranking official to say China will move from a carbon intensity target to absolute reductions.

Denmark’s Helle Thorning-Schmidt was less reticent saying that her country would be “fossil free” by 2050, while Sweden announced it was aiming for zero net emissions by 2050.

India committed to doubling the country’s wind and solar energy by 2020 while President Obama’s confirmed that the US would strengthen its emissions reductions targets next year.

Jose Manuel Barroso, representing the EU, said that the bloc will provide €3bn in grants to support sustainable energy in developing countries, and €14bn in public climate finance to partners outside the EU.



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