Wednesday, 16 July 2014 00:00
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The Asian Development Bank (ADB) has approved a US$ 300 million dual-tranche loan to provide the bulk of a US$ 440 million project to help Sri Lanka scale up its use of clean energy. In addition to ADB funds, there will be co-financing of up to US$ 60 million from France’s Agence Française de Développement, along with US$ 80 million from the Sri Lankan Government.
The first US$ 150 million tranche will finance a 30-megawatt (MW), run-of-the-river hydropower plant at Moragolla in the Central Province and expand and upgrade transmission lines and other infrastructure in needy areas, including the former conflict-affected Northern and Eastern Provinces. This will push forward the Government’s aim of providing 100% of households with electricity but concerns continue over cost.
The hydropower plant will generate an additional 97.7 million units of hydropower for the grid, saving about 72,300 tons of carbon dioxide (CO2) emissions every year, while improved transmission lines will further reduce annual CO2 emissions by 98,400 tons.
The second tranche, expected to be delivered in 2016, will include expanding the 33 kilovolt medium voltage network to improve distribution of electricity to consumers.
It will also focus on the development of transmission network facilities to allow power delivery from two 100 MW wind parks due to be built in the Northern Province in 2017 and 2020. The focus on renewable energy will be welcomed from many quarters but whether it reaches deep enough remains to be seen.
According to a recent report released by the Institute of Policy Studies (IPS), electricity generation in Sri Lanka has been in a transition from a predominantly hydroelectric system to a mixed hydro-thermal system, presently dominated by oil. Thermal power has currently become the major source of electricity generation – about 70.8%. Between 2000 and 2012, contributions from the major hydro plants have seen significant fluctuations – from a high 46% to a low 23% due to weather changes.
Nevertheless, a significant portion of electricity demand continues to be met by conventional and non-conventional renewable energy sources which include mini-hydro. But the share of hydropower is estimated to reduce from 40.2% in 2007 to 19.5% by 2020, while coal-fired thermal generation is estimated to reach 70.9% by 2020.
The IPS also warns that dependency on coal may also increase electricity prices and negative environmental externalities. Basically, experts have warned the Government they could be jumping the gun on coal power plants while not paying enough attention to making hydropower more efficient – a point that the current project also does not comprehensively address.
Upgrading existing hydropower may not have the same publicity power as opening shiny new coal power plants but it makes sense to the consumers’ wallet. It could possibly have environmental benefits at a time when depending on a finite substance such as coal will not be sustainable. Energy is at the core of development but right now, it’s more a burden than a blessing.
There are also questions of whether the Norochcholai power plant and its Sampur cousin will produce more power than local consumers can use, especially during off-peak night times as coal plants cannot be switched off. Experts have called on the Government to strike a deal with India on power purchase agreements that so far have received little response.
