Microgrids touted as priority area for funding by Asian Dev’t Bank

microgrids touted as priority area for funding by asian devt bank - Microgrids touted as priority area for funding by Asian Dev’t Bank

THE Asian Development Bank (ADB) must fund more community microgrid projects to energize more households in developing countries, a sustainability think-tank said.

Ahead of the ADB’s annual governors meeting this week, the Center for Energy, Ecology, and Development (CEED) released a study on the multilateral lender’s energy policies and programs in the past decade. Among its recommendations is the assignment of greater priority to funding microgrid systems, which have become “increasingly” cheap and bankable, it said.

“Unlike fossil fuel technologies and large-scale hydropower and geothermal technologies, new renewable energy technologies such as solar PV (photo-voltaic) or pico-hydropower are much smaller in scale and can be owned and managed by communities themselves,” it said in a study published by NGO Forum on ADB, a network of the civil groups monitoring the bank’s lending activities. 

“If prioritized, access to energy may be expediently provided to unelectrified communities instead of waiting for grid or distribution extensions,” it added. ADB can invest in them through “aggrupation into larger bankable-sized projects.”

CEED said the bank must also help upgrade current grids to turn them into smart grids with increased capacity.

“Smart grids will enable better forecasting and management of renewable energy variability and uncertainty, (while) increased capacity will allow the integration of more electricity generated from renewable energy systems,” it said.

Despite the drop in the number of people in developing countries without electricity access to around 200 million in 2018 from 351 million previously, key issues, such as the limited capacity of microgrids and unreliable energy supply, prevent them from attaining the benefits of full electrification, according to ADB’s sustainable development and climate change department.

The region must therefore aim to increase electricity access with good supply quality and sufficient quantity, according to Yongping Zhai, chief of ADB’s Energy Sector Group, in a blog post in July.

CEED also called on the ADB to step out of coal financing and to update its energy policy to effect Asia’s energy transformation.

“ADB is guilty of having shaped Asia’s energy sector into its carbon-intensive state today,” Gerard C. Arances, the group’s executive director, said in a virtual briefing Friday.

About a half of the total installed capacity of power projects that ADB funded between 2009 and 2019 are powered by fossil fuel, CEED noted in its study.

On Aug. 31, the ADB’s independent evaluation department in a report proposed that the bank formally withdraw from funding fossil fuel projects, among other moves towards a new energy policy aligned with the global climate treaty.

“As a leading development partner in the region, ADB can play a key role in helping address these serious environmental challenges through its energy policy,” said Marvin Taylor-Dormond, the director-general of ADB’s Internal Evaluation office.

In the past decade, the ADB provided $42.5 billion in investment in the Asian energy sector, mostly for electricity transmission and distribution. However, its independent evaluation found that it “fell short” in addressing other priorities, such as demand-side efficiency, last-mile electrification, and sector reforms. — Adam J. Ang

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