AIIB must steer its energy policy towards renewable sources
Jay Vontobel is disappointed that its just-unveiled strategy leaves the door open for fossil fuel investment, and calls on the bank to assume a leadership role for sustainable development
Southeast Asia’s expanding economies are hungry for power. Indonesia alone is looking to build 35GW of new power plants by 2020 and Vietnam’s electricity demand is projected to grow more than threefold between now and 2030. Getting this right is critical for the region’s development: growing its economies while not sacrificing its future to pollution from coal and climate change.
Why climate change is very real, despite what Donald Trump says,
But clean air need no longer come at a price because, in the right conditions, renewable energy is beating fossil fuels like coal on cost and efficiency.
India, for example, is on track to construct a remarkable 275GW of renewable energy by 2027. Coal plants in that country are being shelved for the simple reason they can no longer compete on price, with costs for solar dropping by 45 per cent since January 2016.
We need investment in the generation assets of the future, not relics of the past that are at risk of being stranded
Renewable energy is often smaller in scale and more diversified than coal-fired power stations. That’s a positive for a variety of factors, such as the ability to come online more rapidly, but it does require new ways of thinking for utilities and investors alike.