ADB supports Iceland and China in promoting zero-emissions heating
The Asian Development Bank (ADB) announced that it signed landmark project with Icelandic and Chinese ventures to promote zero-emissions heating.
The ADB project involves a total of US$250 million in loans to Iceland’s Arctic Green Energy Corporation (AGE) and Icelandic-Chinese venture Sinopec Green Energy Geothermal Company Limited (SGE), with the objective to expand environmentally sustainable district heating services in China.
Geothermal district heating extracts thermal energy from beneath the earth’s surface for delivery to households and business through dedicated pipelines. It offers an alternative which is sustainable, stable, and cost-competitive to coal and gas, has zero-emissions, and can be integrated into existing networks to replace heat sources.
ADB Vice-President for Private Sector and Co-financing Operations Diwakar Gupta called the collaboration “a landmark project for Asia”.
“Geothermal district heating can provide millions of citizens with safe and stable heat access while dramatically reducing air pollution and greenhouse gas emissions and the reliance on fossil fuels,” he said.
Iceland is a pioneer in the use of geothermal energy for space heating. In 2014, roughly 85% of primary energy use in Iceland came from indigenous renewable resources. There of 66% was from geothermal.
In recent years, Iceland has managed to increase the generation of electricity with geothermal energy significantly. According to the National Energy Authority of Iceland, geothermal power facilities currently generate 25% of the country's total electricity production.
“Our partnership signed today in Iceland, a country whose own energy system shows the potential of geothermal, will deliver much-needed energy solutions that promote truly sustainable development,” Mr Gupta said.
Based in Iceland, AGE is a leading global developer and operator of renewables, including geothermal technology and energy efficiency projects. The company’s mission is to export Icelandic expertise in geothermal and renewables to fast growing countries in Asia.
According to SGE Vice Chairman and AGE Chairman and Founder Haukur Hardarson, how cities are heated or cooled in the 21st century will determine the outcome in the fight against air pollution and greenhouse emissions.
In China, coal-based heating remains to be one of the major causes of air pollution in the China, including in the Bejing-Tianjin-Hebei region.
He believes that the funding from ADB will enable AGE and SGE to significantly expand in the fight against air pollution while providing much-needed clean heating to the citizens in the China.
SGE Chairman and Sinopec Star Vice President Liu Shiliang also expressed hopes that the successful collaboration with ADB on sustainable geothermal development can be replicated across Asia to fight against air pollution and reduce greenhouse emissions.
Established in 1966, the Manila-based ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. It is owned by 67 members - 48 from the region.