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Kammen: Controversial coal project in Kosovo may proceed given U.S. support

2012 May 9

Professor Dan Kammen seems happy to be back on campus after spending a year serving as the World Bank’s Chief Technical Specialist for Renewable Energy and Energy Efficiency. While in DC, it was his job to be the voice for a clean energy future in a bank that still lends money to big coal-fired power plants. Even with cogent analysis to back up calls for a clean energy transition, Kammen found that old habits will die hard.

The World Bank has been funding coal-fired power projects for more than a decade in Kosovo. Kosovo’s growing economy has experienced a surge in energy demand, and many experts at the Bank contend that yet another new large coal-fired power plant will be the “least cost” option to meet this demand. In a recent SF Chronicle op-ed, Kammen stated why he thinks this is distinctly not the case.

Using research produced by his students and colleagues in the Renewable and Appropriate Energy Laboratory (RAEL) here at Berkeley, he points out that an alternative low-carbon scenario including efficiency, hydropower, and other renewables would create more jobs and that “the capital cost of the scenario including a new coal power plant is more than double the cost of the low carbon scenario.” Additionally, if Kosovo wants to join the EU, a new coal plant would ensure that Kosovo would not be able to meet the EU’s 2020 climate goals. Civil society in Kosovo is strongly against any new coal plants, Kammen notes, because the type of coal they have there is a very dirty form of lignite which is causing severe air pollution.

Cases like this are not without precedent. In August 2010, the World Bank approved a $3.75 billion loan to a coal fired power plant in Medupi, South Africa, amidst environmental criticism from all over the globe. Although the U.S. ended up abstaining from the vote on this project, South African President Jacob Zuma lobbied hard for support from the U.K., which ended up approving the loan.

The major donors to the World Bank have large sway in whether these projects get approved or not, and the U.S. has so far been in support of the Kosovo project. The World Bank has also been lobbying the U.S. for a larger allocation to their loan portfolio. Kammen sees the new World Bank president Jim Yong Kim (a public health expert) as one of the last hopes in stopping the construction of a new coal-fired power plant. Bob Ichord, a deputy assistant secretary at the State Department’s new Bureau of Energy Resources, could also play a role in swaying the decision.

A new World Bank energy strategy that would require greenhouse gas analysis for all electricity investments and prohibit funding of new coal-fired power plants in non-IDA countries (Kosovo is an IDA country, but South Africa is not) has been stalled since it was leaked in April 2011 before a meeting of the Committee on Development Effectiveness (CODE) could vote on it. Executive members of CODE include representatives from major World Bank donor and recipient countries. Reportedly, China and other developing countries refused to negotiate and vote on the proposal once it had been leaked.

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