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We evaluate the treatment of climate-related financial risk by bilateral finance organizations and related policymaking bodies involved in the design and implementation of thermal coal power generation technology financing. Our empirical focus is Japanese bilateral financing of thermal coal power generation in the Asia-Pacific. We differentiate between three approaches that organizations can adopt to assess climate change risk. In the first, the organization assesses climate risk and includes consideration of stranded asset risk. In the second, the organization assesses climate risk but does not take into account stranded asset risk. In the third, an organization does not explicitly consider climate risk although it may use alternative criteria for deciding whether to support an investment, such as the broader environmental implications of a proposed project. We review publicly available documents from nine organizations, supplemented by interviews, and find that while some Japanese lending and policy-setting bodies take climate risk into account, none are required to consider the risk that infrastructure investments may become stranded. Our paper contributes to the study of stranded asset risk in two ways. First, while export finance plays a crucial role in thermal coal power plant investments in the Asia-Pacific region, lending by bilateral finance institutions has not been a focus of such research to date. Second, we extend research into stranded asset risk to bilateral finance organizations and related policy bodies. Our approach can be adopted to understand how finance decision-making bodies in other geographic contexts and technology-types assess the risk that assets may become stranded. Key policy insights Bilateral finance organizations are important in infrastructure exports for thermal coal power plant technologies. Japanese bilateral finance organizations and policy bodies take climate risk into account when making lending decisions for thermal coal power plant technologies, but until recently have not explicitly addressed stranded asset risk. Impairments to the asset value may be incurred by the asset holders or the government. This risk should be taken into consideration in investment decisions. [ABSTRACT FROM AUTHOR]

Simulations clearly show that the choice of rate- or mass-based standards potentially creates significant differences in incentives regarding investments in natural gas and renewable generation, and therefore the preservation of coal generation. The modeling suggests these incentives could have significant effects on coal generation outcomes, and by implication coal production in the future. [ABSTRACT FROM AUTHOR]

Fossil fuels comprise 93% of Malaysia's electricity generation and account for 36% of the country's 2010 Greenhouse Gas (GHG) emissions. The government has targeted the installation of 330 MW of biomass electricity generation capacity by 2015 to avoid 1.3 Mt of CO2 emissions annually and offset some emissions due to increased coal use. One biomass option is to co-fire with coal, which can result in reduced GHG emissions, coal use, and costs of electricity. A linear optimization cost model was developed using seven types of biomass residues for Peninsular Malaysia. Results suggest that about 12 Mt/year of residues are available annually, of which oil-palm residues contribute 77%, and rice and logging residues comprise 17%. While minimizing the cost of biomass and biomass residue transport, co-firing at four existing coal plants in Peninsular Malaysia could meet the 330 MW biomass electricity target and reduce costs by about $24 million per year compared to coal use alone and reduces GHG emissions by 1.9 Mt of CO2. Maximizing emissions reduction for biomass co-firing results in 17 Mt of CO2 reductions at a cost of $23/t of CO2 reduced. [ABSTRACT FROM AUTHOR]

Abstract: In this paper we revisit the debate on the role of vertical integration in the energy sectors: whether vertical integration between coal and electricity sectors is a path to create a competitive electricity market in China. We discuss coal-power conflict and potential anti-competitive concerns related to vertical integration, such as raise rival’s cost and collusion, and suggest that regulators and policy makers should pay more attention to the behavior of integrated companies. In particular, they should balance the tradeoff of vertical integration between coal and electricity companies and ensure that efficiency gains should offset anti-competitive effects. [Copyright &y& Elsevier]

Abstract: Egypt is a fast growing country with 78.9 million population and annual per capita installed power 0.286MW as of July 2008. Moderate to mature population and economic growth trends forecast population and annual per capita installed power to reach 111 millions and 0.63MW, respectively by 2032; and 128 millions at per capita power of 1.02MW by 2052. With these trends in consideration installed electricity generation capacity are forecasted at 70GW by 2032 and 132GW by 2052 as compared to the 2008 installed power of 22.6GW. Meeting these demands is almost impossible using known limited national fossil fuel reserves. Current electricity generation policy exhausts about 65% of country’s total fossil production. Crude oil reserves are expected to deplete by 2012, while gas reserves will be overstrained starting from 2030. A major policy shift towards the use of non-fossil resources is to be adopted. In the article Egypt’s major primary energy resources are evaluated. Electricity generation plans till 2022 are presented and an electricity generation strategy based on gradual introduction of nuclear power starting from 2018 is outlined. A balanced generation mix based on 72.7% fossil, 13% nuclear and 14.3% renewables is targeted by 2052. The mix is supposed to meet Egypt’s electricity needs by 2052 and to improve country’s energy sustainability. [Copyright &y& Elsevier]