Renewables and growth

President Gotabaya Rajapaksa recently went on record saying that the Government aims to generate as much as 80% of Sri Lanka’s power requirement from renewables by 2030. This ambitious target, however, means that the Government will have to make some important decisions, especially at policy level to ensure that renewables are absorbed at a higher rate and infused into the consumption pattern. 

Earlier the Government target for renewables hovered around the 30%-40% margin but even then there were proposals for at least one more coal power plant being discussed. If the 80% target is to become a reality in just a decade then Sri Lanka cannot continue to consider more coal. Optimisation of the existing coal plant is possible but they will need to focus more on solar and wind power. 

More coal is largely an unwise move given that Sri Lanka is among the top three most vulnerable countries to climate change and cannot increase its emissions. Multiple studies over the past few years have also shown the environmental and social cost levied by the existing coal power plant. 

Therefore Sri Lanka has to seriously join the march for renewables being followed by many other developing countries that are adapting renewables as their base power generation options and not just supplementary sources as was done by developed countries earlier.   

Collectively, developing countries have more than half of global renewable power capacity. China and India are rapidly expanding markets for renewable energy. Brazil produces most of the world’s sugar-derived ethanol and has been adding new biomass and wind power plants. Many renewable markets are growing at rapid rates in countries such as Argentina, Costa Rica, Egypt, Indonesia, Kenya, Tanzania, Thailand, Tunisia, and Uruguay.

More developing countries are implementing the public policies needed for the widespread development of renewable energy technologies and markets, which have traditionally been dominated by Europe, Japan, and North America. Even Australia, which recently hit global headlines for bushfires, actively invests in renewables and has made huge inroads to increasing their solar power generation capacity. Lessons Sri Lanka, which has a similar sized population, would do well to learn from.  Compared with fossil fuel technologies, which are typically mechanised and capital intensive, the renewable energy industry is more labour intensive. Solar panels need humans to install them; wind farms need technicians for maintenance. 

This means that, on average, more jobs are created for each unit of electricity generated from renewable sources than from fossil fuels. Renewable energy is providing affordable electricity across the country right now, and can help stabilise energy prices in the future.

In Sri Lanka scaling up rooftop power generation, establishing floating solar facilities and connecting them with the national grid could ensure that renewables are adopted faster than coal power plants that typically take about three years to come into operation. Wind and other sources can also be prioritised.  

Moreover, the costs of renewable energy technologies have declined steadily, and are projected to drop even more. For example, the average price to install solar dropped more than 70% between 2010 and 2017. The cost of generating electricity from wind dropped 66% between 2009 and 2016. Costs will likely decline even further as markets mature and companies increasingly take advantage of economies of scale. 

In contrast, fossil fuel prices can vary dramatically and are prone to substantial price swings, especially if policies are made without taking exchange rate and other variations into consideration, as happens in Sri Lanka. 

For these changes to become reality though mind-sets will have to change and policymakers will have to genuinely be committed to putting renewables at the heart of Sri Lanka’s energy strategy.