Delay causes massive losses to CEB – II

Development of renewable energy projects

By Dr Janaka Ratnasiri

(First part of this article appeared yesterday)

MINI-HYDRO SYSTEMS

Sri Lanka being blessed with a large number of streams cascading in the hill country, there is high potential to harness this source of energy. In fact, the first mini-hydro plant was built by British planters in tea estates even before the large systems were built. Currently, there are nearly 190 mini-hydro plants with capacity below 10 MW installed in all districts in the hill country with an aggregate capacity of 394 MW as at end of 2018. Their PFs vary between 25% and 55% with only about 10% having PF above 40%. The average price paid for energy from these mini-hydro plants is LKR 14.45 a kWh (CEB S&G Data Book 2018).

The SLSEA Plan has recommended installing additional min-hydro systems with capacity 110 MW by 2025. However, building these plants are not encouraged because of the many adverse impacts they cause to the environment including depriving water to people in downstream, forming puddles which could cause breeding of mosquitoes, affecting fish habitats and general ecology and aesthetics.

DECLINE IN BUILDING

RENEWABLE ENERGY SYSTEMS

It is observed that there has been a decline in the addition of renewable energy (RE) capacity during the past few years. It appears that the CEB has imposed an embargo on their development apparently citing a legal issue. When this matter was brought up at a TV panel discussion some time back, a senior official sitting in the panel representing CEB responded by saying that the applications for building new RE projects were put on hold on Attorney General’s (AG) advice.

The addition of generation capacity into the national grid is governed by the provisions in Sri Lanka Electricity (Amendment) Act, No. 31 Of 2013. Such an Act has been brought in to facilitate the introduction of additional capacity rather than to prevent such addition. If the AG’s ruling for disallowing building of new RE systems is due to any inconsistencies arising out of poor language in the Act or due to difficulty in interpreting its clauses, the Ministry should have taken the initiative to bring in suitable amendments to the Act in consultation with the AG to remove such inconsistencies and remove any conflicting clauses, so that whatever legal issues that prevent addition of new RE capacity could be removed.

INDIA’S OFFER TO BUILD A SOLAR PARK IN SRI LANKA

The Sunday Island of 26.07.2020 carried a news item describing a programme to promote solar energy utilization globally launched by India in collaboration with the Government of France, as a side event at the Climate Change Conference held in Paris in 2015. This programme called the International Solar Alliance (ISA), was established by the Prime Minister of India and the President of France on November 30, 2015, with the objective of scaling up solar energy, reducing the cost of solar power generation through aggregation of demand for solar finance, technologies, innovation, research and development, and capacity building. The ISA aims to pave the way for future solar generation, storage and technologies for member countries’ needs by mobilizing over USD 1000 billion by 2030, according to the India’s Ministry of New and Renewable Energy (MNRE) website (https://mnre.gov.in/isa/).

The above news report further states that India’s state-run National Thermal Power Corporation (NTPC) Ltd plans to set up a solar energy park in Sri Lanka under the aegis of ISA. It is not known whether India has made a formal communication on this to the Government of Sri Lanka and how the local energy authorities will respond to such an offer. Sri Lanka’s own plans to build solar systems will not exceed 1 GW capacity even by 2025, according to SLSEA Plan. This is far below the installations in India which has reached 34 GW in 2020. Being a member of ISA, Sri Lanka should welcome India’s offer to build a solar park in Sri Lanka under ISA. Under the terms of ISA, India only facilitates sourcing of funding and services and the host country has the ownership for the project, who is required to do the preliminary ground work to seek funding. It is hoped that the local energy utilities will accept this offer.

PROBLEMS FACING IN EXPANDING RE SYSTEMS

When more and more RE systems are built, their integration into the national grid may pose some problems. One is the rapid variation of the output of solar and wind systems. With the development of software that could forecast these variations on-line, it is possible to increase the penetration of RE systems into the grid. If necessary, CEB may acquire this technology from any foreign country who has already implemented high penetration of RE into their system.

Another is the need for storage for saving the electricity generated during the daytime by solar systems for use at night time. Often, what is proposed is to introduce high capacity storage batteries for this purpose. However, with the availability of hydropower reservoirs, a better way to save energy generated by solar systems is to avoid using hydro power during the daytime by an amount equivalent to what is generated by solar system. This saved hydro power is then available for using during night time (see article by Chandre Dharmawardana (CD) in Island of 15.07.2020).

A third problem often cited by CEB is the lack of capacity of the transmission system to accommodate energy generated by RE systems as planned. According to CEB, installing more than 20 MW of wind capacity in any given region may adversely impact local grid stability and power quality (NREL Study, 2003). This problem could be solved by improving the substations in outstations and increasing the capacity of transmission lines connected to them.

A fourth problem, particularly applicable for large scale solar PV systems is the difficulty in identifying suitable land in areas of high solar insolation. Unlike in India, Sri Lanka has limited land available for building solar parks which require nearly 1 ha for every 1 MW of installed capacity. One way to overcome this problem is to utilize the large number of reservoirs available in the country to build solar systems (See CD’s article). As mentioned before, government has already decided to build such a plant with capacity of 100 MW at Madura Oya reservoir.

ACHIEVING 100% DEPENDENCE ON RE SOURCES

If the above impediments which prevent incorporating more RE systems are removed, it will be possible to do away with planned fossil fuel power plants altogether, particularly the coal power plants which cause heavy pollution and achieve 100% penetration of RE systems as found feasible in a report released by ADB/UNDP in 2017. The CEB will then have to discard its current Long-Term Generation Expansion Plan which gives priority for coal power plants and prepare a fresh plan giving priority for RE sources.

Though the cost of coal consumed in a coal power plant may appear cheap and hence given priority in the CEB Plan, when the heavy expenditure on operation and maintenance as well as external costs including cost of damage to the environment and health of people are added, coal power is no longer cheap. A report released by the Public Utilities Commission of Sri Lanka (PUCSL) in 2017 revealed that “total cost at Puttalam plant is LKR/kWh 18.60, excluding environmental costs and cost of long Transmission lines”. (https://web.pucsl.gov.lk/english/wp-content/uploads/2017/11/brief-anlysis-cost-of-generation-2017.pdf).

Hence, it is desirable if the present and planned coal power plants are replaced with RE plants. If the entire generation from fossil fuels including coal amounting to about 8,400 GWh currently is replaced with RE projects which will cost only LKR 10 per kWh with no cost of externalities, it could save the CEB about LKR 110 billion annually. Hence, sooner it is done, the better it is for the economy of the country.

BENEFITS OF SHIFTING TO

RE SYSTEMS

In addition to financial benefits accrued by shifting to RE systems by avoiding fossil fuel combustion, the country stands to gain several other benefits. One is the avoiding of environmental pollution caused by emission of gaseous pollutants including oxides of Sulphur, oxides of nitrogen, particulates which are health hazards to people. In addition, damage caused to agricultural crops, fisheries habitats and to health of the people by ash accumulated after coal combustion could be avoided.

The other is the avoiding of emission of carbon dioxide into the atmosphere which contributes to global warming and in turn causes climate change. Being a signatory to the Paris Agreement on Climate Change, Sri Lanka has pledged to reduce carbon dioxide by a specified amount voluntarily. Shifting to RE sources is a convenient way of achieving this target. Sri Lanka is eligible to receive financial benefits for undertaking RE projects in view of the saving of carbon emissions, which the government should pursue by submitting suitable project proposals to the Climate Change Secretariat.

CONCLUSION

The private sector has taken the initiative to build many RE projects up to 2017 generating altogether 1,830 GWh of energy in 2018, which amounts to 11.9% of the total generation of 15,374 GWh (CEB SD 2018). However, there has been a decline in RE development in recent years apparently due to a legal impediment which needs rectification immediately. Power was purchased from unsolicited RE projects built initially at rates valid for 20 years which have been overpriced compared to rates offered for new RE projects based on competitive bids. By expediting shifting to RE projects as planned up to 2025, government stands to save around LKR 43 billion annually.

If the present generation of 8,400 GWh from fossil fuel combustion is replaced with RE sources, it could save CEB around LKR 110 billion annually. To realize this, Government should raise the upper limit of 10 MW for building RE projects by the private sector, enabling it to undertake larger RE projects. Sri Lanka should make an effort to secure financial assistance from Climate Funds to shift from proposed fossil fuel generation altogether in the future moving away for more RE generation integrated into the system.