India and China, Full Speed Ahead in Climate Change Mitigation

chinese-and-indian-leaders-meetingWhile the United States is wondering what will happen next on climate change mitigation in their country, both India and China have recently unveiled very ambitious plans to fight local air pollution and global climate change.

According to an article from the Guardian, India plans nearly 60% of electricity capacity from non-fossil fuels by 2027. This makes the Indian government believe that it will exceed its Paris Agreements targets by far, with :

” A draft 10-year energy blueprint published this week predicts that 57% of India’s total electricity capacity will come from non-fossil fuel sources by 2027. The Paris climate accord target was 40% by 2030.”

The Guardian goes on to list how India could become a renewable energy super power in the next decade or so, as investments in the area are booming. From bringing electricity to 400 million people with solar energy to going LED or investing massively in renewables, India has been showing strong leadership in this most important issue for a few years now. To the point that, according to newspapers, renewable energy investments in India to reach $250 billion over next five years, and over a trillion by 2030.

In neighbouring China, the government has announced a plan that it will spend $360 billion on clean energy sources by 2020. This will result in the creation of 13 million jobs and cut significantly the amount of air pollution in Beijing and other Chinese cities.

Meanwhile, Beijing has announced that it will be closing  and/or not building another 104 coal-fired plants that were either due to be constructed soon or were being constructed. This move is significant – 120 Gigawatts of capacity – as it is equal to a third of the amounts of coal-fired plants in the United States.

China installed over 34 Gigawatts of solar PV capacity in 2016 alone as Cleantechnica reported, with over 11 GW in one month alone. This is absolutely staggering as it brings the total solar PV capacity of the country to 77 GW. Yes, capacity almost doubled in one year.

All this can be explained by the fact that renewables are getting more and more competitive every day and that smart countries invest in cost effective and low carbon solutions. In early 1996, the global solar PV capacity was of 200 MW, now the world installs that capacity every single day… Let that sink in. And it probably will not stop anytime soon as to Bloomberg New Energy Finance, solar is now becoming even cheaper than wind.

Edited, original article written by Edouard Stenger
Advertisements

China Seizes Opportunities in Latin America

chinese-dragonChina has big plans for Latin America—plans that seem to reflect China itself: massive and ambitious.

There are plans for a $10 billion, 3,300-mile-long transcontinental railroad snaking through the jungles of the Amazon river basin and over the highest mountain range in Latin America, linking the Atlantic shore to the Pacific. There’s talk of a $50 billion supersized canal carving a 161-mile-long swath across Nicaragua, offering passage to the megatankers of tomorrow and overwhelming even the newly expanded Panama Canal to its south.

There are more. Many more. These gargantuan projects are aimed at fueling China’s needs for resources and feeding South America’s need for energy and infrastructure. But geopolitics also play a role as China strives to make Latin America an economic partner, if not a counterpoint to the United States.

In fact, China’s investments in Latin America, from mining to massive hydroelectric dams, nuclear reactors and railroads, grew by 500 percent between 2000 and 2010, totaling nearly $100 billion, with another $250 billion in spending promised over the next decade. And while the U.S. still accounts for more than three times as much in trade and investment in the region, some analysts see disturbing signs in the steadily shifting balance.

In 2000, the Chinese portion of Latin American trade was about 2 percent. The U.S. share was 53 percent. Ten years later, the Chinese share was up to 11 percent and the U.S. portion was down to 39 percent.

“Clearly we are still the dominant player vis-à-vis them,” says Francisco Cerezo, the U.S. head of DLA Piper’s Latin America corporate group. “But it does speak to the trend. And I would be more concerned about the trend and making sure you right the ship and you focus on it properly.”

The past two decades of forays into Latin America come as part of China’s “go global” plan. Its first priority: raw resources to fuel its economic growth. China is heavily, and increasingly, dependent on imported oil. Its energy needs led it to offer some $65 billion in loans to Venezuela’s government in the last decade, according to the Washington nonprofit Inter-American Dialogue, along with direct investments in oil production and infrastructure there.

China also single-handedly accounts for nearly a fourth of the world’s copper demand, along with significant demand for tin and iron ore. “That’s why you see them coming into Latin America’s mining sector, which is huge,” says Jerry Brodsky, a partner and director of the Latin American practice group at Peckar & Abramson. “It’s perhaps the largest economic driver in Latin America’s mining.”

China gets much of its copper from Chile, while the China-based Chinalco Mining Corp. International put $3.5 billion into the Toromocho mine in Central Peru, giving it control of “the world’s second largest preproduction copper project, as measured by proved and probable copper ore reserves,” according to the company’s website.

Now China is reaching beyond resources. Its latest wave of investments involves massive infrastructure and energy projects.

The China Three Gorges Corp. has been rapidly acquiring hydroelectric dams in Brazil since 2013, paying nearly $4 billion in June to take over operation of two of the country’s largest dams, with a combined capacity to produce 5 gigawatts of electricity. That came just three months after China Three Gorges announced a proposal to build a new 8-gigawatt dam on the Tapajos River.

China’s State Grid Corp. is developing two transmission lines to deliver power from the Belo Monte dam in the Amazon basin. Last year, state-owned China National Nuclear Corp. signed a $15 billion deal to build Argentina’s fourth and fifth nuclear power plants, roughly doubling the amount of electricity generated by the country’s nuclear plants. Construction of the first of the new reactors, in cooperation with Argentina’s state-owned Nucleoeléctrica, is due to begin early next year.

These projects come on top of the nearly $42 billion that China invested in infrastructure in Latin America in just 2013 through 2015 alone. China is finishing construction of a space tracking, telemetry and command facility in Patagonia, Argentina, complete with a pair of maneuverable parabolic antennas, engineering facilities, and a $10 million electric power plant.

China Harbour Engineering teamed up with local partners to win the contract for Autopista Mar 2, a 152-mile motorway connecting four towns north of Medellin, Colombia. And, in May, it landed a $465 million road contract in Costa Rica.

“They’re providing what the specific markets need,” says Brodsky. “They follow the path of least resistance. Latin American needs infrastructure. Brazil has an insufficient production of local energy. So does Argentina. The road projects in Colombia are booming right now because for 30 or 40 years they spent all their money fighting the guerrillas, and they didn’t pay attention to their road infrastructure. So now there is an accelerated program in Colombia for road building.”

The nature of the projects also plays to China’s strengths. Despite its recent economic slowdown, China remains flush with money from its boom years. Combined with the technical expertise that it has built with domestic projects and industries, those deep pockets allow China’s state-owned companies to compete at a scale that few challengers can match.

“When you get to that level of megaprojects, there are not that many qualified bidders out there­—people that have not only the technical capacity but the financial capacity,” Brodsky says, adding that Chinese companies “have the money to self-fund a lot of their projects, and that makes them very competitive when it comes to bidding for big, large projects in Latin America.”

Abridged, original article published here

Wind and Solar Costs Are Plummeting: Now What Do We Do?

For years, debates about how to reduce carbon emissions from electricity generation were framed as trade-offs: What is the cost premium we must pay for generating zero-carbon electricity compared to fossil fuels, and how can we minimize those costs?

Fortunately, the holidays came early this year for renewable energy: In investment company Lazard’s annual report on the levelized cost of energy (LCOE) for different electricity-generating technologies, renewables are now the cheapest available sources of electricity. This flips the question of clean-versus-cost on its head. And in 2017, we’ll be asking: How much can we save by accelerating the renewable energy transition?

The story from Lazard’s 10th annual report is clear. Rapid technology cost reductions mean wind and solar are now the cheapest form of generation in many places around the country, without federal subsidies like tax credits.

What does levelized cost of energy mean?

Lazard uses LCOE analysis to identify how much each unit of electricity (measured in megawatt-hours or MWh) costs to generate over the lifetime of any power plant. LCOE represents every cost component – capital expenditure to build, operations and maintenance, and fuel costs to run – spread out over the total megawatt-hours generated during the power plant’s lifetime.

Because different plants have different operating characteristics and cost components, LCOE allows us to fairly compare different technologies. Think of it as finally being able to evenly compare apples to oranges.

How wind and solar are winning the day

According to Lazard, wind costs have fallen 66 percent since 2009, from $140/MWh to $47/MWh.

Large-scale solar’s cost declines are even more dramatic, falling 85 percent since 2009 from more than $350/MWh to $55/MWh.

The case is even clearer when federal subsidies are considered: Tax credits drive renewable energy costs down to $31/MWh for wind and $43/MWh for solar. These low prices are not only cheaper than building new natural gas plants, but they are also cheaper than many fossil fuel power plants on their marginal cost (i.e. costs for operating, maintaining, fueling, etc.) alone.

In other words, it’s now cheaper in many places to build new wind or solar energy plant than it is to simply continue running an existing coal or nuclear plant:

What does it all mean?

Even with these new numbers, more natural gas plants are being built every week, expensive coal is not retiring as fast as economics would dictate, and the rapid transition to renewable energy isn’t happening fast enough to prevent the worst effects of climate change.

At least three stodgy institutional barriers limit renewable energy deployment today:

  1. Difficulty accessing high-quality wind and solar resources
  2. Misguided alarmism about the reliability of renewables
  3. Misconceptions of the cost of running the grid with more renewables

While just wind and solar alone could potentially power the entire U.S. many times over, the windiest and sunniest (and thus cheapest) places to generate wind and solar power are often in remote locations, far from large cities with lots of power demand. Costly, drawn-out processes for siting transmission and power plants make these projects unnecessarily expensive and stifle investment. Policymakers can turn to America’s Power Plan for recommendations on streamlining the siting process and limit local impacts to create policy that reduces siting costs for renewables in the U.S.

Managing America’s grid with variable renewables also requires rethinking how we operate and plan our electricity systems, and many utilities have been slow to adapt. Grid operators sometimes claim we need to back up solar and wind an equal ratio of fossil fuel power plants like coal or gas for “when the sun doesn’t shine and the wind doesn’t blow,” but that’s just not true. Adding wind and solar can reduce the risk of a large outage – what are the odds the wind unexpectedly stops blowing everywhere or the sun is suddenly blotted out by clouds everywhere? In fact, government analysis shows we could quadruple the amount of wind and solar on the grid today without running into reliability issues.

Besides reliability, defenders of the old paradigm of large, fuel-fired power plants argue wind and solar come with integration costs, i.e. backup generation and transmission lines to connect remote locations to the grid. But attributing these costs to any one technology makes little sense across a big grid, where a diverse mix of power generation naturally smooths variability like an index fund versus a single volatile stock, for example.

Gas, coal and nuclear power also require new transmission, fuel supply and storage, and large backup reserves. Like renewable sources, they also have “integration costs,” even without accounting for the health and climate costs of carbon dioxide and other pollution.

A new paradigm

Transitioning our electricity sector away from fossil fuels is no longer just an environmental imperative; it’s an economic one. Free markets now favor solar and wind — look no further than gas-rich Texas for evidence: Texas has over three times more wind capacity than any other state, and solar is expected to grow 400 percent by 2022.

Outdated policies leave us unprepared to take full advantage of the rapid cost declines we’re seeing in the wind and solar industry. The time is now to radically adjust for a paradigm where wind and solar form the backbone of our electricity grid.

Article by Mike O’Boyle  originally published here
Images courtesy of America’s Power Plan

 

IDB Approved Billions for Caribbean Projects in 2016

caribbean_mapThe Inter-American Development Bank (IDB) says it had provided US$11.7 billion for various projects in Latin America and the Caribbean in 2016.

The Washington-based financial institution said funds were also provided by its subsidiary Inter-American Investment Corporation (IIC).

“Between the IDB and the IIC, disbursements exceeded US$9.6 billion during the year, confirming the IDB Group’s role as the region’s leading source of multilateral financing,” the IDB said in a statement.

It said both the approvals and the disbursements were “in line with the priorities set by the IDB Group’s 48 member countries, such as ensuring that at least 35 per cent of the new financing goes to the region’s smallest and least developed economies”.

The IDB said 2016 was the first full year of operations of the renewed IIC, which is now in charge of the IDB Group’s non-sovereign guaranteed operations.

During 2016, the IDB said the IIC approved a total of 153 deals for US$2.26 billion, of which 100 corresponded to the Trade Facility (US$457 million).

Of the larger transactions, the IDB said 41 per cent went to infrastructure projects, 40 per cent to financial institutions and 19 per cent to corporate financing deals.

The IDB-led sovereign guaranteed operations went to state modernisation projects (33 per cent), infrastructure and energy (30 per cent), social programmes (24 per cent), climate change (12 per cent) and trade and integration (One per cent).

During 2016, the IDB said its group continued to implement administrative cost controls that it had put in place last year, “reflecting the austerity policies adopted by many of its member countries”.

Article originally published here

IDB Backs Paraguay Agriculture, Economic Program

2015-06-10-1433961822-3928805-550pxpry_orthographic-svgParaguay will improve the competitiveness of its farm and livestock sector and its economic integration, particularly in the east of the country, with a road upgrade and conservation project backed by a $90 million loan approved by the Inter-American Development Bank (IDB).

The beneficiaries will be users of the highway grid, especially small- and medium-size producers, and a population estimated at 522,000 people, of whom 76 percent live in the countryside.

The goal of upgrading and conserving roads is to improve travel conditions, the level of service and safety on motorways that are part of the program in a bid to cut transport costs, travel time and the number of accidents.

The stretches of road included in the project are part of a major logistical corridor that connects areas of production in the east of Paraguay with places that process, transform and market the country’s main export products, and with ports.

“The stretches of road that will be improved have been designed to be resilient to the effects of climate change, particularly heavy rain. Moreover, by improving the corridor with climate change considerations in mind, we will be strengthening the road network of the Oriental Region of Paraguay and consolidating a route that will be more resistant to flooding”, said Ernesto Monter, Project Team Leader of the IDB.

The works that are scheduled include the paving of a stretch of approximately 90 kilometers between San Juan Nepomuceno and Route 6, which is key to national and international integration as it connects the south-central part of eastern Paraguay, where 54% of farm production is concentrated, with the so-called Hidrovía Paraguay-Paraná, where the country’s main grain export ports are grain processing plants are located.

Furthermore, the extension of this corridor from Route 6 to the east will provide access to one of the main agricultural production and processing centers and the ports of the Paraná River.

The program will finance all work necessary to improve and conserve major roads in the east, including upgrading the technical features of existing ones and widening roads and building shoulders to bring them up to standard with other stretches along the corridor.

The project will also finance the construction of ring roads around three populated areas which will reduce heavy vehicle traffic in these communities, reducing noise, pollution and the risk of accidents. The project also includes the implementation of safety features such as pedestrian crosswalks and mechanisms to get cars to slow down.

The $90 million loan is over 23 years with a grace period of seven-and-a-half and an interest rate pegged to the Libor.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

Article originally published here

Agreement Between BNDES and IDB foresees US $ 2.4 Billion for Infrastructure

brazil-1

Investment

Resources can be used to finance sustainable energy sectors and in micro and small enterprise projects

The National Bank for Economic and Social Development (BNDES) approved this week a US $ 750 million loan for the Sustainable Energy Finance Program.

The project focuses on increasing alternative renewable energy participation –  wind, solar and biomass –  the Brazilian energy matrix and energy efficiency. The funding will have a local counterpart of up to US $ 150 million.

This is the first operation of the Conditional Credit Line Agreement for Financing the Productive and Sustainable Investment, worth up to US $ 2.4 billion, which will be formalized between BNDES and the Inter-American Development Bank (IDB).

The BNDES will have a disbursement period of up to four years from the date of signature of the agreement, a 54-month grace period and a three-month Libor-based interest rate, plus the applicable margin for loans from the IDB’s ordinary capital.

Partnership

The IDB is historically the main international creditor of the BNDES, whose partnership began in the 1960s. Until 2010, 21 loan agreements were signed between institutions, with a historical value of more than US $ 8 billion.

The most recent contracts were aimed at supporting micro, small and medium-sized enterprises operations under the second Conditional Credit Facility Agreement.

Source: Portal Brazil, with information BNDES

Article originally published here