By John Parnell

December 16, 2018 - The European Bank for Reconstruction and Development (EBRD) has dropped its support for coal.

The World Bank signaled an intent to pivot away from coal in 2013 but continued work on a project in Kosovo that was only recently shelved.

Like most major European nations, the EBRD’s new energy strategy also includes ample investment in natural gas plants as an alternative to delivering large, centralized power generation capacity. It’s support for gas, however, will only happen “where it is consistent with a low-carbon transition that is both secure and affordable”.

“Urgent and decisive steps are needed to address the challenges posed by climate change and poor air quality,” said Nandita Parshad, EBRD managing director, energy and natural resources. “This requires a fundamental shift away from hydrocarbons to cleaner energy sources. That means the electrification of economies, including industry, transport and heating, with that electricity generated overwhelmingly from renewable sources.

“This is the goal that we have placed at the center of our new energy sector strategy: to decarbonize the power sector with a decisive shift away from the most polluting fuels. Achieving this goal requires smart, integrated and resilient networks and reliance on competitive, regionally integrated and resilient markets to deliver this change,” she added.

The news comes as familiar lines of defense for coal and other fossil fuel-based power generation were trotted out at the UN climate talks in Poland. Many developing economies have long-claimed that coal was necessary to ensure they could electrify their economies in an affordable fashion. With renewables undercutting even coal in many Sunbelt nations, that argument has lost its weight. The fact that bodies like the EBRD and the World Bank agree, is both a boon for investment in solar and wind and a knife in the heart of the ‘coal for development’ position.

The World Bank’s president Jim Kim had warned against new coal capacity as far back as 2016. In October this year, it backed out of a deal for a 500MW coal plant in Kosovo saying at that renewables now offered the most cost-effective source for the nation. The Bank is bound by its own bylaws to pursue the most cost-effective solution for recipient governments.

Both the Asian and the African Development Bank continue to back coal. The New Development Bank, established by China as a counter point to the US-based World Bank, has refused to rule out supporting coal.