South Africa Gets Big World Bank Loan for Controversial Energy Project

Bulk of money will be for large coal-fired plant, running contrary to U.S. climate policy

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At the end of last week the board of the World Bank approved a $3.75 billion loan, most of which will go to build one of the world's largest coal-fired generating plants. The project had come under mounting fire from environmental leaders around the world and from the Obama administration, which wants to discourage international lenders from financing new coal plants. In the last 15 years, public lenders like the World Bank have funded $37 billion in 88 coal-fired plants in developing countries, according to a report cited in a New York Times article. And  as noted in a recent blog post here, South Africa's government has come under increasing criticism at home too, because its heavy investment in energy will burden future generations with a high level of indebtedness and present-day ratepayers with much higher electricity costs.

Eskom, the leading national energy company, is embarked on a $50 billion program to boost capacity, which could result in electricity prices rising 25 percent per year for three straight years.

The World Bank, defending its position, points out that large solar and wind projects also will financed out of the loan, and that South Africa has pledged to cut its greenhouse gas emissions 34 percent by 2020--twice the U.S. pledge, for what that's worth. The U.S. government, for its part, wants the World Bank to only fund projects in the future that are at least carbon-neutral.

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This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

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