By Neville Ladduwahetty

A report in The Washington Post of 03 Nov. states: “More than 100 countries have signed the Global Methane Pledge, which requires a 30 percent cut in methane emissions by 2030, one of the Biden administration’s priorities for the COP26 climate summit in Glasgow, Scotland. The pledge’s signatories now represent nearly half of human-caused methane emissions …. the Biden administration also unveiled a sweeping set of domestic policies to cut emissions of methane from oil and gas operations across the United States”. Furthermore, the announcement that the US and EU are global partners in this venture signifies the seriousness of the situation, as well as the pledge.

Conveying Sri Lanka’s contribution towards this global effort, a report in the Daily News (Sri Lanka) also of 03 Nov. 2021, citing the comments made by President Gotabaya Rajapaksa, at COP26, states: “…the President added, Sri Lanka is deeply aware of the impacts of climate change. Our rich philosophical heritage, shaped by the Buddha’s teachings, places great value on environmental integrity. Therefore, the President said sustainability is at the heart of the national policy framework. ‘Sri Lanka’s updated Nationally Determined Contributions’ aims to reduce emissions towards achieving carbon neutrality by 2050”. During his speech he referred to increasing Renewable Energy to 70% by 2030 and specifically “no new coal power”.

What is attempted herein is to ascertain the current status of power generation capacities in respect of renewable and non-renewable sources, in order to establish the scope of what needs to be done to achieve the goals stated at the COP26 in Glasgow. The information presented herein is based on a Report titled “SRI LANKA Energy Sector Assessment, Strategy and Road Map”, dated December 2019, of the Asian Development Bank (ADB) and a Report of the Ceylon Electricity Board (CEB).

POLICY vs. DEMAND

The conclusions are based on data presented in the reports referred to above in respect of what proportion of power is currently produced by Renewables, such as hydro, solar and wind, and by non-renewables, such as fossil fuels and products of Petroleum.

According to the Executive Summary of the above report, “The peak demand is forecasted to cross 3,000 MW by 2020 and 4,800 MW by 2030”.

According to the CEB report, titled “Least Cost Long Term Generation Expansion Plan 2018 – 2037, submitted in May 2017, “off-peak demand to grow from the 1,100 (current level) to about 1,700 MW by 2037…”. Furthermore, table 3.3 states that by 2030 the Peak Demand is projected to be 4726 MW; a projection that closely agrees with the projection of 4800 MW in the ADB Report.

Given below are capacities of renewables and non-renewables that currently exist and in stages of development.

RENEWABLES:

HYDRO:

Large plants 1390 MW; Small plants 350 MW; Stages of Development 250 MW; SOLAR- Roof top target by 2020 is 200 MW; WIND-Developed 130 MW and under Development 130 MW (ADB Report).

TOTAL FROM RENEWABLES AS OF 2020 = 2450 MW.

NON-RENEWABLES:

COAL – NOROCHCHOLAI 900 MW; FOSSIL FUELS – KELANITISSA- 120 MW installed in 1980 &1981, 115 MW installed in 1997 and 165 MW in 2000; and KERAWALAPITIYA 310 MW.

TOTAL FROM NON – RENEWABLES, AS OF 2020 =1610 MW.

IF 120 MW IS RETIRED, BALANCE NON-RENEWABLES IN 2020 =1490 MW

ACHIEVING 2030 GOALS

If the goal to be achieved in 2030 is 70% renewables, it must follow that non-tenewables would be 30% of the demand. Thus, the demand projected for 2030 is 4800 MW, and target for tenewables would be 70% of 4800 MW, which is 3360 MW and for Non-Renewables the target would be 30% of 4800 MW which is 1440 MW.

The information presented above makes it clear that Sri Lanka already has the capacity to produce a minimum of 1490 MW of electricity from non-renewable sources. Thus, there no reason to expand existing capabilities, at least up to 2030. This means that expanding capacities at Kerawalapitiya from its present level of 310 MW by a further 700 MW is in conflict with the 30 % goal intended for non-renewables.

Another factor that needs to be recognised and appreciated is that since the current capacity of non-renewables is a minimum of 1490 MW, and if its contribution is to be 30% of the existing capabilities, the non-renewables are currently in a position to meet a demand of 1490/30%, which is 4966 MW; a capacity of 196 MW in excess of the projected demand of 4800 MW.

If the policy is for renewables to be 70% of the projected demand of 4800 MW by 2030, which is 3360 MW and the present capacity is only 2450 MW, there remains a need to meet the shortfall of 910 MW over a period of nine years. A significant portion of this shortfall could be met by doubling the hydro power capacity of Victoria, and the balance could be met by solar and wind over the next nine years.

In summary, a review of existing capacities for renewables is that there is a shortfall between projected demand and existing capacities. On the other hand, with regard to non-renewables, the current capacities of a minimum of 1490 MW are already in excess of the 30% of the projected demand of 4800 MW. Under the circumstances, expanding capacities at Kerawalapitiya by the addition of 700 MW to the existing 310 MW comes into conflict with the goals the President committed to in Glasgow at the COP26 summit on climate change.

EXPANDING NON-RENEWABLE CAPACITY

at KERAWALAPITIYA

In the context of the material presented above, there is absolutely no justification for the CEB to expand the capacities of non-renewables at Kerawalapitiya, and call for international bids to install a 350 MW plant, based on LNG. This is what prompted New Fortress Energy (NFE) to submit an unsolicited proposal to expand the existing capacity of 310 MW at Kerawalapitiya, by 700 MW, and convert all operations amounting to 1010 MW to LNG, together with a Floating Storage Regasification Unit (FSRU). Following the offer by NFE, a framework agreement was signed between NFE and the Government that has the backing of the US government. This Agreement requires Sri Lanka to sell 40% stake in the state owned West Coast Power as part of the deal.

The moment the news was out, there was a storm of protests. Petitions have been filed in the Supreme Court against the sale of the 40% stake in a national asset. Others, have objected to the deal, with NFE, on the grounds that the terms of sale of LNG binds Sri Lanka to commitments that are unacceptable. A report in The Morning of 04 Nov, quotes the Chairman of the Public Utilities Commission of Sri Lanka Janaka Ratnayake as having said that the “Yugadanavi is deal beneficial despite shady signing”. The deal is shady because the terms of the agreement prevent it from being disclosed without the consent of both parties, according to the Chairman of the CEB. Furthermore, the CEB has conveyed that it does not have grounds for objecting to the terms and the manner in which the deal was executed (The Morning, 04 Nov. 2021).

The fundamental issue is not whether the deal with NFE is “shady”, or its terms conflict with Sri Lanka’s national interests. The fundamental issue is that the deal is in conflict with the Policy of the Government to convert power generation to 70% Renewables by 2030. This Policy cannot coexist with the attempt to expand Non-Renewable power generation.

Furthermore, existing capacities meet the projected demand for Non-Renewable until 2030. Therefore, the deal to expand capacities of Non-Renewables, by whatever means, comes at the cost to the Policy of conversion to 70% Renewables by 2030; a commitment announced at the COP26 in Glasgow by the President. What is evident from the foregoing is that the decision to expand the capacities of Non-Renewables was taken without first ascertaining whether Sri Lanka needs to expand Non-Renewables, before rushing to do so by those responsible for power generation. This is, indeed, disappointing, to say the least.

CONCLUSION

The Policy of the Sri Lankan Government, as stated by the President at the COP26 climate change summit, in Glasgow, was to increase Renewable energy production to 70% by 2030 and no more coal. It must then follow that the Policy in respect of Non-Renewables should be limited to 30% of demand by 2030. According to the ADB Report cited above “The peak demand is forecasted to cross 3,000 MW by 2020 and 4,800 MW by 2030”. At 70% Renewables this translates into 3360 MW and 1440 MW of Non-Renewables.

Per the material presented above, the present capacity of Renewables is 2450 MW. This is short of the goal by 910 MW that should be reached by 2030. On the other hand, the above facts demonstrate that existing capacities of Non-Renewable, 1440 MW, have already reached the threshold of 30% required by Policy, because even if 120 MW at Kelanitissa are retired due to age, Sri Lanka would still be left with 1490 MW of power from Norochchalai (900 MW), Kerawalapitiya (310 MW) and Kelanitissa (280 MW).

Under the circumstances, the question arises as to how the CEB together with all the others associated with it, justified a call for international bids to set up a 350 MW LNG plant, at Kerawalapitiya, when absolutely no grounds existed, and at the cost of defeating the Policy Government Policy for 70% Renewables and ipso-facto 30% Non-Renewables by 2030. This action tempted New Fortress Energy to step in with an unsolicited offer to increase Non-Renewable production, at Kerawalapitiya, by an additional 700 MW to operate on LNG and to sweeten the pot, convert the existing 310 MW plant also into LNG along with a Floating Storage Regasification Unit to transfer the LNG all for a 40% stake in West Coast Power for $250 million.

This offer has precipitated serious objections from various quarters that range from Supreme Court petitions to dissent within the Cabinet and others threatening trade union action – all for nothing because under no circumstances could the New Fortress deal be justified since existing capacities in respect of Non-Renewables do not warrant expansion particularly because such an expansion would be in conflict with the objectives of the current Policy of 70% Renewables. The entire fiasco associated with the New Fortress deal could have been avoided had those responsible for power generation critically examined the fundamental question as to whether or not Sri Lanka should expand Non-Renewables at this time.

Since the fundamental question has not yet been posed, it is imperative even at this late stage for the President to ask this fundamental question – IF SRI LANKA’S COMMITMENT AT THE COP26 IS TO BE HONOURED, SHOULD SRI LANKA EXPAND NON-RENEWABLE CAPACITIES OR RENEWABLE CAPACITIES BETWEEN NOW AND 2030? If the answer to the question is that expansion should ONLY be limited to Renewables, it follows that the New Fortress deal is clearly NOT in Sri Lanka’s interest.