Private sector participation vital to meet growing energy needs | Sunday Observer

Private sector participation vital to meet growing energy needs

19 January, 2020
The activities on mega scale renewable energy generation is on going. File pic: Lake House Media Library
The activities on mega scale renewable energy generation is on going. File pic: Lake House Media Library

* Electricity demand grows at an annual rate of 5.6%

* Govt. mulls holistic approach to select energy mix

Sri Lanka’s power sector has made commendable progress in several areas in the past 10 years. Some of its achievements include near 100% electrification, low transmission and distribution losses and meeting increased electricity demand with new power generation. The country has also been able to stimulate the growth of Non Conventional Renewable Energy (NCRE) and rooftop solar projects with financing from domestic banks and investors.

To meet growing energy needs, Sri Lanka will need to look beyond publicly financed projects and increase the share of commercial financing and encourage greater private sector participation.

Electricity demand continues to grow at an annual rate of 5.6% and the Long-Term Generation Expansion Plan (LTGEP) indicates that capacity additions of some 8,341MW will be needed by 2037.

The government will have a holistic approach considering the environment, economy, social impact when selecting an energy mix for the country. Therefore, the policy on energy mix is expected to drive more benefits in terms of economic and social aspects moving towards global power trends in transforming the country to go for more renewable energy sources to generate power, a senior officer at‎ Ministry of Power and Energy said.

The country will be meeting around 2/3 of electricity using Firm Power. To this end in 2030, Firm Power mix will be, 30% from Liquid Natural Gas or Natural Gas, 30% from High Efficient Coal, 25% from major hydros and 15% from furnace oil, a by product from the refineries in the country, he said.

The government will take measures in meeting around 1/3 of electricity using Non-Conventional Renewable Energy (NCRE). This includes energy generated through mini hydros, wind, solar and biomass.

The energy mix for 2018 was as follows:

Major Hydro - 33%

Thermal Oil - 23%

Coal - 33%

NCRE - 11%

The Ceylon Electricity Board (CEB) has 300 MW high efficient sub critical and 600MW super critical coal fired steam plants. In the long term, it is important to recognize that coal plant development program will have favorable influence on the economy. Timely implementation of the coal plant in the pipe line is essential and delaying these plants any further will increase the price of electricity and also affect the economic development of the country, he said.

“The activities on mega scale renewable energy generation is on going. The first phase of 100 MW Mannar Wind Power Park is under construction and will be energised by the end of this year. Thereafter, the second phase of the Mannar wind park will be launched. The pre-feasibility study on the large scale 100 MW Pooneryn wind park is on going. The preliminary work of 100 MW Siyambalanduwa Solar Park is under construction and when completed will be added to the national grid,” he said.

Deputy Director General (Operations) at Sri Lanka Sustainable Energy Authority, Harsha Wickramasinghe said, “Our power demand was comfortably met with hydropower resources after Mahaweli development and the comfort lasted till the mid 1990’ where over 90% of our electricity was generated from hydro. But the electricity coverage at the time was only 50%. With the expansion of national grid (now it is 100%) and adding more and more industries and commercial loads, the demand grew rapidly and now we have to delivery 15,000 GWh of electricity per year.

“To do this we need other resources than hydro, as we have run out of good hydropower resources as we have fully developed our capacity. Successive governments dragged the issue of base load power plants and delayed the coal power plant for decades, pushing the country towards oil, a very expensive energy source. Now we have a system where 40-45% comes from coal and 10% from new renewable and 25% from hydro and rest from oil.

“Ideally, we should have a balance of our resources. It is foolish to depend on a single source, be it hydro, oil or coal. So in energy security perspective, I recommend a balance of sources, leaving a fourth to a third per resource (coal 25-33%, LNG 25-33%, Oil 25-33% and Renewable 25-33%). We even promote geographical spread of imported energy forms. This is for not to depend solely on middle eastern oil or Indonesian coal, but develop commercial relationships with as many vendors as possible, to gain energy security, even if it is not the least cost option,” he said.

This is what the new energy policy says on this: ‘Diversity in energy resources used in electricity generation will be ensured subject to economic, environmental, technological and operational requirements. Global diversification of energy sources will be pursued to safeguard the supply chain against external geo-political uncertainties. Percentage installed power generation capacity from a single imported fuel shall not exceed 50% of the total installed firm capacity to safeguard against geopolitical constrains.’

“The rationale behind the new energy policy is clear. So you can see our thinking on the above strategies as we are not putting all the eggs in one basket. So even if one or more resources get too expensive or face a supply disruption, the country can move ahead,” Wickramasinghe said.

On the argument of national vs global resources, it is obvious that the best economic policy is to develop our own energy resources, so it becomes an industry and create wealth and jobs for our people. So our strong focus is on renewable energy. So the percentages I mentioned above from energy security perspective will have to be changed to reflect the economic perspective, where we give maximum possible space for renewable as we do have technical and economic limitations. This will ensure that the long term energy cost will be lower, he said.

Director General, Public Utilities Commission of Sri Lanka (PUCSL), Damitha Kumarasinghe said, “The PUCSL acts as an adviser to the government and advocates optimal energy mix. It work towards ensuring the effective implementation of the existing energy policy while promoting lowest cost sources.

“It focuses on power generation, expansion plans and tariffs to enable a transparent process and set standards and monitor them ensuring compliance. The Commission also plays the role of dispute resolution on the complaints received by the consumers,” he said.

The PUCSL is the economic, technical and safety regulator of the electricity industry in Sri Lanka and the designated regulator for petroleum and water services industries. PUCSL also has been assigned as the shadow regulator for the lubricant market in Sri Lanka.