Will The Move Towards Renewable Energy Be Tripped Again?
In March this year Cabinet approved a proposal by the Minister of Power, Energy and Business Development Ravi Karunanayake to amend the Sri Lanka Electricity Act No. 20 of 2009. The amendment seeks to exempt Non –Conventional Renewable Energy (NCRE) projects from having to follow the tendering process, which often could take up to 2 years. Approvals and actual implementation of the projects usually take a further 2 to 3 years.
In fact, Act No.20 of 2009 had been amended through Act No 31 of 2013, in an attempt to iron out the legal contradictions between the Electricity Act and the Sri Lanka Sustainable Energy Authority Act (SEA Act). While the Electricity Act stipulates that all power purchases, including renewable energy should be through competitive bidding, the Sustainable Energy Authority Act does not require such a process to purchase electricity. As the objective of the SEA Act is to promote the development of indigenous renewable energy sources, it has been issuing permits for such projects to private sector investors. According to informed sources a clarification had been sought in 2013 and in 2017 from the Attorney General, stating that the 2013 amendment was not clear. The AG, say the sources has stated that electricity cannot be bought without a bidding process.
Meanwhile, six hundred and seventeen (617) applications that could collectively generate 1555mw through ground mounted solar plants are gathering dust at the Ceylon Electricity Board (CEB) Counterpoint learns. The applications to obtain licences to begin operations have been pending for nearly 4 years.
While the cabinet approval mentioned above, should hopefully, resolve this issue, the question that pops up, is why it has taken this long to even attempt to amend the Act for more clarity so that the renewable energy projects could be implemented. Instead, despite expected power shortages this year and in the years before, the CEB has continued to purchase emergency power, often disregarding the bidding process, knowledgeable sources claim.
The sources point out that it’s the ‘diesel mafia’ that prevents the renewable energy projects from moving forward. For the past several years, the CEB has been resorting to the purchase of diesel fuelled emergency power, costing the country billions of rupees, instead of utilising the less costly option of solar which Sri Lanka is blessed with almost year round, to power the national grid.
The small scale plants awaiting approval are those that would generate less than 5mw each. Several more applications that could generate between 5 -10mw too are awaiting approval. The surrounding areas where the ground mounted plants are to be located would be powered through these, so the burden on the main grid would be less. As well, the energy loss of transmission which is about 10% right now can be minimised through this distributed multiple small scale power generation. Informed sources also say that hardly any action has been taken to commence construction of the two solar parks, a 100MW at Siyambalanduwa and another with similar capacity in the Poonerin area in which had been approved 2017.
Lakmal Fernando, the Secretary of the Solar Industries Association told Counterpoint that up to 20% of renewable energy could be connected to the grid without battery backup, while hydro could be used as a natural battery, but the CEB has so far not accepted this alternative. What is the rationale to be purchasing emergency power every year, a practice since 2016 asks Mr. Fernando. Unfortunately, the current and successive ministers in charge of power and energy seem to take the advice of the CEB which is determined to use only “fossil fuel” and also purchase emergency power. A sudden breakdown of one of the power plants or similar occurrence would justify the purchase of emergency power. Spending billions of rupees to purchase diesel fuelled emergency power where the monies go out of the country, instead of harnessing renewable energy indicates bad planning. Is a Minister, a Ministry Secretary and a band of highly educated engineers of the CEB needed to purchase emergency power, he asks. Solar power on the other hand, states Mr. Fernando will generate more local labour, cost the country far less and prevent scarce foreign exchange from flowing out of Sri Lanka.
On April 18th this year, the Solar Industries Association unveiled its Least Cost Long Term Solar PV Generation plan 2019-2015 to the media. The plan was also submitted to the Minister of Power & Energy and Business Development, several other members of the government and managers of the CEB.
Apart from ground mounted plants that would generate electricity to the surrounding areas, at least 50% of the 6 million rooftops could be adapted to obtain a considerable amount of solar energy, says Mr.Fernando. Currently around 18,000 rooftops are solar powered, and around 180 mw of solar power has been added to the grid from Rooftop Solar alone. “Not every rooftop will be suitable depending on the age of the building etc. However, all that is needed is to amend the Buildings Code to make it mandatory that buildings of a specific size are equipped for renewable energy, and with time, we would be self-sufficient in energy,’ he points out. The demand growth for energy is about 5% a year, and soon, it would not just be the 6 p.m. to 8 p.m. peak time demand, but a flat requirement as electricity usage increases, he told Counterpoint.
As our graph indicates the need for emergency power has increased with leaps and bounds, since 2016, which was at 150mw and 700mw this year. The Solar Industries Association estimates the cost to purchase emergency power in 2018 at Rs. 41.6 billion and Rs.101 billion in 2019. Their plan will save the country Rs. 266 billion over a six year period the Association points out, adding that the savings could be put to better use. (See graph for explanation). The Association’s press statement notes “ The only power source that can be commissioned quickly enough to address the power shortage now and in the run up to 2025 is solar power –we exclude emergency power purchase as it is not economically viable in the short, medium or long term; neither does it fall with the government’s energy policy plan.”
According to the plan the yearly solar power capacity addition to the national grid will be from 200mw in 2019 to 800mw in 2025. Currently the average cost for emergency power is around Rs. 31.00 per kWh, while solar power with storage can be sold at Rs. 23.10 kWh. Accordingly, 200mw of solar in 2019 would result in a saving of Rs. 2,768 million, the Association points out.
Mr. Fernando explained that solar power can now be provided with storage capabilities. “In fact, solar could be used for day time power requirements and hydro saved for the night time.’ The CEB will also save on its transmission loss, which is at 11% for the national grid, while the same would be less than 2% for solar energy, as it’s used then and there. In the case of the former a capacity charge must be paid, whether or not the plant is used.
The Association has had previous discussions with the government to promote the use of solar power however, this is the first time that it has submitted a long term plan. The CEB, Mr. Fernando states opposes the use of solar claiming that it is not ‘firm energy’; for example if an engine at the Norocholai
plant fails, solar power cannot be used right away to power the grid, however, the 1555mw solar power proposal comes with battery storage capabilities to supply uninterrupted power for 2 to 4 hours.
In September last year, Sri Lanka signed an agreement to obtain a US$ 50 million loan from the Asian Development Bank (ADB) to fund the Rooftop Solar Power Generation project which aims for a million houses with solar energy.
The loan is to assist low and middle-income earners to be part of the governments “Battle for Solar Energy” programme of generating 200mw by 2020 and 1000 mw by 2025.
Says Morris Perera, Operations Manager, Ceylon Eco Solar (Pvt.) Ltd. which deals with rooftop solar projects, there is not enough awareness or motivation amongst the people to make the switch. The change is slow, because people are not aware of the benefits of using solar to power their homes. The people are unaware how Net Metering, Net Accounting and Net plus work (electricity billing systems for solar powered buildings), the differences in these methods and how it benefits them. Therefore, a more concerted effort is needed to popularise it.
In fact, he says, that his company has also introduced the use of Solar to power the batteries of fishing boats; they have done so in Mirissa and Kudawella. Solar powered batteries are more reliable for the fishermen when they are out at sea, he points out.
Mr. Karunanayake, has so far, taken a step in the right direction to clear the issue between the two relevant Acts and create a new policy framework to speed up Sri Lanka’s move towards renewable energy. Let’s hope the ‘diesel mafia’ does not trip up this attempt too.