Cost Reflective Tariffs for Large Consumers to Encourage Self Generation by Indigenous Sources to Cover Part of Their Requirements. Reduced Burden on CEB May Help Do Away with Coal Power Plants - Eng Parakrama Jayasinghe

22nd March 2013, By Eng Parakrama Jayasinghe

From written submission to Public Utilities Commission of Sri Lanka in reference to the call for public comments on the proposed consumer tariff to be applied form the 1st of April 2013. The author, Eng Parakrama Jayasinghe, is the Hony. President  of Bio Energy Association of Sri Lanka,  a Member of the Board of Directors – Sustainable Energy Authority, and a Member of the Board of Directors – NERD Centre.

Preliminary

Achieving a stable and sustainable energy supply, as well as a tariff structure affordable to all segments of consumers requires a long term vision and strategies, applied year by year on a consistent basis.

Subsidies provided for maintaining a generation mix dominated by imported oil or coal is non sustainable and such subsides will only flow to the pockets of the oil and coal suppliers. The deficit run by the CEB is made good by the treasury which means that the supposedly low electricity bill is a myth.

Therefore the only lasting solution is to move towards a generation mix which is by far dominated by indigenous sources of energy as was the case prior to 1995, when 95 % of the generation was from major hydro. The tariff proposals should therefore have this long term goal and everyone must be ready to pay that extra amount now, to overcome the sad situation, created due to lack of proper vision in the past decades, so that we can move towards a more rational and secure energy system. Until such a situation is achieved it is to the advantage of both the CEB and the country to reduce the generation using fossil fuels either by CEB or the IPPs as much as possible.

Recommendations

• The tariff system should be designed to promote maximizing the indigenous sources. The true cost of generation using oil or coal must be calculated without direct or indirect subsidies and state facilitation provided for such generation. Thus any subsidies given to the consumer is a conscious decision based on the true costs. Since such subsidies are not sustainable in the long run, this would encourage self generation by the high end consumers, thus lowering the burden on the CEB and the treasury.

• The problem of managing the peak load is not addressed. The time of day metering facility should be extended on optional basis to the domestic consumers with a  demand of over 180 units per month and for the General Purpose GP 1 and Hotels HP 1 consumers. The price per unit during the peak hours should also be the true cost of the fossil fuel based generation, as the lower end users needs could have been met from the lower cost sources such as hydro already in place.

• The tariff for the high end users should also be cost reflective.  They must be encouraged to use indigenous sources and install self generation to meet at least part of their requirements. This too will reduce the burden on the CEB and will be a means by which the consumers can reduce their electricity cost.

Back Ground for the Recommendations

The CEB is continuing to make losses due to

• High Cost of Generation quoted as Rs 20.84 per KWh, average , but is likely to be much higher. The low cost of the major hydro capital cost of which have been paid up many years ago is the reason that the average unit cost is so low.

• Sale of electricity at rates lower than the cost

This is not a sustainable situation and has to be arrested sooner than later. The deficit is covered by public funds. Therefore it is a fallacy to pretend that any of the consumers are receiving “cheap “ electricity. The burden of funding the deficit is carried by all Sri Lankans, now that we are nearly 100% grid connected, irrespective of the level of consumption.

Thus all Sri Lankans should be ready to accept the burden of an increase in the tariff, provided that plans are in place for a more sustainable future. 

Although the proportional increase of tariff for the lower end consumers has been portrayed as high percentage ( 59%) increase, even the increased tariff at Rs 6.25 (Rs. 5.00 per unit with the fuel adjustment of 25% ) is less than 25% of the current average cost of generation of Rs 20.84 Similar situations has existed for many years. The current increase to be paid is only about Rs 200.00 per month, far less than the amount paid for such luxuries as mobile phones. The CEB has quite correctly extended the grid to nearly 100 %  at costs far in excess of the returns that could be expected. This is a subsidy that is fair and proper so that all Sri Lankans are given access to electricity.

It is however not correct for the consumers to expect the energy at prices far less than the cost of generation.

Thus each unit consumed by this segment carries a subsidy of Rs 20.84-6.25 = Rs 14.59

Since the predicted generation mix is 50% thermal based on fossil fuels, this subsidy is in fact a means of subsidizing the suppliers of oil and coal and not the Sri Lankans at any level. This will worsen in the years to come with the contribution by fossil fuels increasing to over 75% as per the current long term generation plans.

Thus there has to be a concerted effort to change the generation mix to maximize the uses of hydro and other indigenous sources of energy. While this cannot be achieved in a year, the tariff policy in the current year and the years to come must be consistently designed to encourage this change continuously.

Contrary to the popular myth, the cost of indigenous energy is cheaper than that of coal power, touted as the cheapest source and promoted aggressively by the CEB, quoting totally erroneous figures and hiding the important elements of cost in coal power generation. The table below of the fuel costs alone for power generation using different fuels illustrates this fact.

•   Diesel 0.28l/kWh  @ Rs 117.00/l                Rs 32.76
•   Residual Oil 0.231 l/kWh @ Rs 67.00/l        Rs 15.41
•   Coal  0.39 kg/kWh @ Rs 17.92/kg             Rs 6.98
•   SRC Wood 1.0 kg/kWh @ Rs 4.50/kg        Rs 4.50    
•   Agro waste  2.0 kg/kWh @ Rs 2.50 /kg      Rs  5.00

Applying similar conditions , the balance costs on capital, O& M etc has to be similar for both coal and Wood, leading to a decidedly lower cost of generation using SRC wood.

The world price trends and the continually depreciating rupee pressured by the huge import bill on oil and coal will make this difference wider in the years to come.

This fact has been demonstrated by the use of the WASP program used by the CEB for the determination of the least cost  long term generation plan. Dendro has been included as the only source of firm energy from renewable sources, accepted by the CEB as a candidate. 

However the outcome of this analysis which clearly indicated Dendro as the least cost option, was newer published.

The cost of generation using Solar PV is coming down year by year.

Thus the only way the tariff can come down or at least be maintained at present levels is by changing the generation mix.

Also since the CEB appears to have no solution other than fossil fuels to meet the future demands which will drive the percentage contribution by indigenous sources even further, the change may have to come from investments on generation by others, mainly the private sector through NCRE.

The problem of the daily peak load

The long term generation plan of CEB is promoting large scale development of coal power plants. This is done only to be able to serve the peak load between 6.30 PM – 10.30 PM  , as even the current installed capacity is adequate to meet the average day time demand for many years to come.

However, the current generation  strategy  discourages  using the abundant solar energy , and perhaps even the wind resource, whichever is available during the off peak hours. The need to operate the coal power plants at near full capacity, even during the off peak hours, acts as a deterrent for the development of the indigenous and potentially cheaper sources.  The lack of interest in promoting the “net metering” concept is evidence of this.

However, there could be many individuals and organizations who would be willing to install self generation facilities, even using such non firm sources , to reduce the burden on the CEB to cater to the high demand over a few hours on a daily basis.

Therefore in order to promote such self generation and also to encourage use of such capacity , primarily during the peak hours, it is proposed that the time of day metering facility be made available to the domestic consumers who consume over 180 units per month and to the G P 1 and HP 1 categories of consumers.

This can be made optional at the beginning and made mandatory in the coming years.

A typical installation would be a 2 kW solar PV domestic installation with adequate battery storage to cater to the four hours of peak . The cost of such an installation could be recovered in less than four years based on current world market prices of PV systems.

The potential saving of the peak load capacity that needs to be provided by the CEB would be in the order of 500 MW by this change, by a  fraction of domestic consumers alone. The details of this calculation can be provided.

Self Generation by large Consumers

The CEB statistics indicate that 11% of the consumers are responsible for 60% of the total demand for electricity.

This is a potential segment where self generation could be promoted even during the off peak hours. In the past CEB was in the habit of calling on such consumers to use their diesel generators during the dry months with incentive payments. There is no reason why this promotion should not be continued, as there are indigenous sources with the potential for generation at much lower costs. The difficulties faced by the CEB and the government in finding the capital for adding new generation capacity can also be overcome by this means.  The proposed tariff structure should provide incentives for such consumers to move in this direction.

Related Info :

• Sri Lanka Should Reduce Peak Power Demand and Trim Most Expensive 5pct of Energy to Eliminate Losses at CEB - LirneAsia, a Regional Think Tank

• Sri Lanka's Power Monopoly Draws Fire at Public Hearing on Proposed Tariff Hike. Costs Claimed by CEB are Murky and Efficiencies of Plants are not Independently Audited

• Electricity Tariff Hike - Industries Get Biggest Subsidy, Hotels Marginally Subsidized & General Purpose Customers to Pay in Excess of Costs - an Analysis by the Regulator

Net Metering Solar Systems from BAM Green to Cut Electricity Bills by 100%. Sunil Perera of Gypsies, a Happy Customer

02nd April 2013, www.ft.lk, By Rashika Fazali, Pix By Upul Abeysekera

BAM Green, a subsidiary of BAM holdings, commenced operations last Thursday (28) and will look at reducing up to 100% of commercial and domestic electricity costs by going green with the use of renewable energy sources.

crude oil is expected to dry out in the next 20 years and coal running out in another 200 years, powering energy will be a huge hassle, as prices will soar and the search for alternative sources of energy rapidly becoming the need of the moment.

However, with solar power being the most practical and free source of energy, BAM Green will look to power Sri Lankan households and businesses by advocating the conversion to cheaper energy with the use of the company’s Net Metering system.

This system will be connected to the power line directly through the meter and any excess solar power generated, will be fed back to the Ceylon Electricity Board (CEB) grid using an export system. The energy left in the system will then be used to power households at night which will be referred to as power imports. Consumers will only have to pay the difference between the imports and exports at the end of the month.

At the launch of the company’s new subsidiary held at Water’s Edge, BAM Green introduced its first customer to invest in their solar panel Net Metering system, popular musician Sunil Perera who stated: “My electricity bill compared to average users was high. It was around Rs. 80,000 and with all our efforts; we could never get it below Rs. 65,000.”

As the high electricity cost was posing a big issue in his household, Perera stated that he went in search of a system that would significantly reduce his monthly electricity bill. Having found the Net Metering system and installed it in June last year, he revealed that his present electricity bill showed a surprising drop to around Rs. 4,000. “The month before it was around Rs. 5000,” stated Perera adding, “I am very happy with the investment. If you are having doubts, don’t worry. Just go for it.”

With the Net Metering system, the cost of electricity is gradually reduced with the efficiency of the solar panel but at the same time it also depends on the type of equipment installed and their overall energy consumption.

BAM Green has so far tried, tested and completed 25 pilot projects covering the domestic and commercial sector and revealed that the company will offer a massive 25 year warranty on the Net Metering systems, which is sourced from Norwegian Renewable Energy Corporations (REC) Group, a leading global provider of solar power solutions.

REC Group Asia Pacific Managing Director Shailendra Mohan Bebortha stated that this technology will help take the human race forward into the next generation of sustainable power generation. After the realization that climate change is man-made and following the recent tsunami in Japan that caused a nuclear catastrophe that rocked the world, he stated that the environment needs to be looked after with more care.

In addition, BAM Green in collaboration with the Carbon Consulting Company handed out carbon conservation certificates to their clients who have helped preserve the environment with the reduction of their individual carbon footprints.

Related Info :

• Feasibility of Solar Electricity in Sri Lanka. Overview of Solar PV Installation in Hotel Industry by SWITCH-Asia Greening Sri Lanka Hotels Programme

• Solar Energy Can Free Sri Lanka's Dependence on Fossil Fuels - Kanagalingam Gnanalingam, Rtrd Additional General Manager of Ceylon Electricity Board

• Sri Lankan Households Can Sell Solar Power to Ceylon Electricity Board. Pilot Project for Domestic Net Metering Started

• Sri Lanka's First Grid-Connected Solar Power Project to be Set up in Hambantota. 500KW $50mn Project Funded by Korean Government

Feasibility of Solar Electricity in Sri Lanka. Overview of Solar PV Installation in Hotel Industry by SWITCH-Asia Greening Sri Lanka Hotels Programme

29th March 2013, www.dailymirror.lk, By Srilal Miththapala & Suranga Karavita

An overview of the state of Solar PV installation in the Sri Lankan hotel industry was carried out recently by the SWITCH-Asia Greening Sri Lanka Hotels programme project team. While doing this study, the project team also analysed the impact of the proposed electricity increases on domestic Solar PV installations as well. A ready reckoner feasibility chart for evaluating financial feasibility of Solar PV installations for residences was also prepared. The following paper discusses these aspects.

Introduction

Of late, there has been much discussion about the generation of electricity from solar energy. This is usually called solar photovoltaic generation (Solar PV), where an array of solar cells, typically mounted on the roof of a building, will capture the solar energy and transform it to electrical energy.

In a conventional or standalone system, the solar electricity has to be stored, since usage (demand) does not always coincide with supply (generation).  Hence, in a typical installation, electricity is generated in the form of direct current (DC) and usually stored in batteries. The size of such battery banks required will depend on the size of the installation and the days for which the system can operate on battery power alone, with no input from other generation sources.

In addition, the system requires an inverter to convert the electricity stored in the battery in the form of direct current (DC), to alternate current (AC) at a higher voltage, to be compatible with the downstream installation. The cost of a battery bank can be as much as a Solar PV panel for a well-designed system, which can provide power for several days when the Solar PV is not generating electricity. Batteries are still in the development stage and they are prone to premature failure. So, it is common that in Solar PV installations with a battery bank, some of the batteries have to be replaced before the specified lifetime.

Cost of installation

The high cost of Solar PV panels and the large amount of batteries required for storage resulted in the cost of such installations being prohibitively high and not feasible for installation as alternate energy sources.

With rapidly increasing electricity rates, reduction in price of Solar PV panels and  acceptance by the Ceylon Electricity Board (CEB)  to trade electricity units with the grid, Solar PV installations are at present becoming more financially attractive.

‘Trading’ of electricity

This ‘trading’ of electricity units, recently allowed by the CEB, is referred to as net metering or grid tie. This is where an electricity consumer is able to generate electricity at the consumer’s own premises, using any form of alternate energy source and can then synchronize the electricity thus produced with the CEB system and ‘export’ it to the CEB.

The consumer is not paid for this ‘exported’ electricity but is given credit (in kWh), which is set off against his normal electricity consumption off the grid. There will be metering for consumption as well for export of energy to the CEB network.

Each month, consumption and export of energy will be compared. If the export is more than the consumption, credit is given (in kWh). If consumption is higher than export, the consumer is charged for net amount of consumption (consumption - export).

 This is effectively a ‘win-win’ situation for both the consumer and the electricity service provider (the CEB or LECO). The consumer benefits by being able to export the electricity he generates without having to store it, thereby reducing the need and the cost for a storage battery bank.

From the CEB’s/LECO’s point of view, there is some form of electricity demand reduction from the grid, since the consumer is now producing some quantum of electrical energy.

At present, the cost of investing in a grid tie Solar PV is around Rs.350,000 per kW and the cost of investing in a conventional Solar PV system is around Rs.700,000.

Solar PV installation in hotel industry

In spite of grid tie options being available, the reduction in cost of Solar PV panels and increased cost of electricity, Solar PV for larger industrial applications is still not financially attractive, due to the long pay back periods of around 15 years for a grid tied system and around 30 years for standalone systems.

Hence, from the surveys and studies carried out by the SWITCH-Asia Greening Sri Lanka Hotels programme, it has been found that Solar PV installation in hotels is still few and far between. In fact, from the 350 odd hotels working with the Greening Hotels programme, there are only three hotels, which have some form of Solar PV installations.

Ulagalla Resort

This 80 roomed resort hotel in Anuradhapura has been the trailblazer in taking a bold step in installing the largest Solar PV system in a hotel so far. It has a bank of Solar PV panels covering 900 sqms, generating 120 KW of electrical energy, which amounts to about 40 percent of the hotel’s total electrical demand.

The system operates on a net metering platform and cost about Rs.125 million for the entire installation, which was done with the commissioning of the hotel in 2010. While certainly the hotel has taken a bold and pioneering step in having such a large Solar PV installation, payback periods are still quite high.

However, the hotel has been able to market this unique installation to give it a strong identity as a hotel which embraces good sustainable consumption practices.

Jetwing Sea and Jetwing Blue

When the former Jetwing Seashell Hotel was refurbished and relaunched as Jetwing Sea, a self-contained (inclusive of battery bank) Solar PV was installed for one wing of the guest rooms in the hotel. The installation cost was about Rs.12 million in 2010 and generates approximately 15 kW.

Former Jetwing Blue Oceanic was also refurbished and relaunched in the same year as Jetwing Blue and a Solar PV system, similar to Jetwing Sea was installed of capacity 20 kW, at a cost of Rs.16 million.

More than being a financial consideration, here again, it has become a unique selling proposition (USP) and a powerful marketing tool. The hotel proudly advertises itself that most of its rooms’ electrical energy is powered by the sun and each room has an indicator to show when the room is powered by solar (green light) and when it is powered by the mains, during low sunlight periods (red light).

Hence, other than for selective marketing and differentiating propositions, currently, larger Solar PV installations, either grid tied or standalone systems do not seem to be that viable in large scale hotel applications.

Solar PV for residences

However, with the rapid increase in electricity rates for residential buildings which consume higher loads, grid tie Solar PV installations are becoming a very much more feasible option. 

Provided adequate roof area or space on the ground is available, any residence utilizing more than 300 units of electricity (kWh) per month, with the grid tie Solar PV installation at current cost and new electricity rates (which are being proposed),  will pay back in just about less than six years. 

The project has developed a ready reckoner, which gives a quick approximate indication of the financial feasibility of a Solar PV installation for residences.

It is evident from the table below, which shows the co-relation of payback periods for Solar PV installations and units consumed, it is evident that the moment a domestic consumer exceeds the lower thresholds of consumption of around 250 units, the effective electricity charges increase exponentially, bringing the payback period rapidly down to  seven years and less.

(Srilal Miththapala, an Electrical Engineer by profession and a senior tourism professional and Suranga Karavita, a Mechanical Engineer, are Project Director and Industry Technical Services Manager of EU SWITCH-ASIA Programme Greening Sri Lanka Hotels project implemented by Ceylon Chamber of Commerce respectively).

Related Info :

• SWITCH-Asia Sustainable Consumption and Production for Food & Beverage Sector SMEs Sri Lanka Success Storie

• Greening Sri Lanka Hotels Project under SWITCH-Asia Programme Enhances Environmental Performance of Sri Lankan Hotel

• Solar Energy Can Free Sri Lanka's Dependence on Fossil Fuels - Kanagalingam Gnanalingam, Rtrd Additional General Manager of Ceylon Electricity Board

• Sri Lanka to Provide Solar Power to the 10pct National Grid doesn't Reach in its bid for 100pct Electrification by 2012

• Ultra Modern Solar Power system for Sri Lanka's Yala National Park, Buthawa Wild Life Bungalow

• Push for Larger Solar Power Plants Connected to the National Grid by Sri Lanka's Renewable Energy Promotion Agency

Ultra Modern Solar Power system for Sri Lanka's Yala National Park, Buthawa Wild Life Bungalow

29th January 2012, www.sundayobserver.lk, By M Nelson Piyaratne

Sri Lanka's first green energy system was declared open by the Wild Life Conservation and Agricultural Minister S.N. Chandrasena on Wednesday (25) at Buthawa Wild Life bungalow in Yala National Park.

This solar system was introduced to Sri Lanka by James Consulting (PVT) Ltd, NiceLux (PVT) with the partnership of Nawoo L.D.D. Incorporated in Korea.

This ultra modern solar power system is the only one of its kind in Sri Lanka and its special feature is that this solar panel needs only half an hour sunlight to get the batteries fully charged and the power lasts for four days.

In addition to supplying solar power to illuminate the bungalow the company has installed two street lamps with separate solar panels which change its direction according to the movement of the Sun.

So that regular solar power is absorbed to the panels without interruption.

The other special feature is that these street lamps react to the heat of the body and the movement of the objects so that automatically lamps give a brighter light if a vehicle or a wild elephant came within the ten metre radius of the lamps.

These street lamps are automatically switched on at the dusk and switches off at the dawn saving energy and money.These solar panels of the street lamps automatically come to a vertical position in the night allowing all the dust got collected in the day time to be cleaned up by the overnight falling of dew drops in the night. Minister Chandrasena said that he was thankful to Korean companies for installing this invaluable system in his tenure as the minister of Wild Life.

Managing Director of the Korean CompanyDavid Kim said that he was happy to install this system in Sri Lanka under the invitation of minister Chandrasena and they would like to co- work with Sri Lankan government to introduce this independent electrical system to isolated places of Sri Lanka where wired electricity system is expensive.

Related Info :

• Solar Energy Can Free Sri Lanka's Dependence on Fossil Fuels - Kanagalingam Gnanalingam, Rtrd Additional General Manager of Ceylon Electricity Board

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• Sri Lanka LOLC 48 kW Solar Power Array, the Largest Solar Power System in the Corporate Sector

Sri Lanka Cuts Import Duty & VAT on Buses & Trucks. Value Added Tax Lifted on Solar Cells & PV Panels

10th January 2012, www.lankabusinessonline.com

Sri Lanka has cut import duties on buses, trucks and engines, which will help improve the standard of tourist and commuter services in the island the finance ministry said in a statement.

The state has also lifted a custom import duty charged on imported lorry bodies and tyres for lorries and busses by 50 percent, the finance ministry said. It was not clear what the existing tax rates were.

Sri Lanka's customs office in a statement posted on its website said from January 01, value added taxes on buses, lorries and trucks were also lifted giving effect to a proposal on the 2012 budget.

Other items from which value added taxes were lifted, raw material used for spectacles and frames, sunglasses, perfumes, sports equipment, speakers and digital cinema equipment, photo sensitive semiconductor devices.

Value added tax on spares for poultry industry, sawn wood, mammoties, forks, moulding (steel, glass, rubber, plastic), machinery for rubber and plastic industries, greenhouses and poly tunnels.

Related Info :

• New Vehicle Registrations in Sri Lanka up by 55pct in June 2011

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Finco to Construct 3 Additional Hotels at Rs 2.2bn Investment that Couples Extensive Use of Solar Power

29th July 2011, www.dailynews.lk, By Shirajiv Sirimane

Uga Resorts (Pvt) Ltd, a fully-owned subsidiary of the Finco Group of companies will invest a further Rs 2. 2 billion to construct three additional hotels. Finco Vice President Priyanjith Weerasooria said in addition they have already invested Rs 800 million for their first boutique property investment, Ulagalla Resort, in Thirappane, Anuradhapura.

He said they acquired a property belonging to Associated Developers in Pasikudah three months ago to construct a luxury resort in the Tourism zone next to Malu Malu.

“In addition we have also leased a property in Kuchchaveli for another luxury hotel.”

Both projects are scheduled to be completed by mid 2012.

The company is also looking to build a 30-room property in the South.

He said that out of the investment 75 percent would be equity and 25 percent from borrowings.

They are looking at the niche market and hope to market the rooms for over US $ 325. “We are looking at the US, Canada, India, UK, and Chinese markets,” he said.

Uga Resorts Head of Marketing Subandu Perera said they paid emphasis in developing eco-friendly resorts, and intends on positioning itself in the ‘Luxury’ segment.

Ulagalla Resort, the first luxury hotel in Anuradhapura consists of 20 artistically designed luxurious Chalets scattered over an unrestricted area of 58 acres.

This was opened one year ago. “In keeping with our “Go Green” concept, 50% of the energy requirement of the resort is generated through solar power; the resort has the largest solar farm in the country with a capacity of 125 KVA and is proud to be the only supplier of Solar Energy to the National Power Grid,” he said. The concept of ‘Jungle Beach Resort’ in Pasikudah the first hotel in the zone is to create an experience of both jungle and beach in one location.

Finco Group is one of Sri Lanka’s leading private sector organizations with a solid business reputation and sound financial standing.

Related Info :

• Sri Lanka to Permit Eco Friendly Hotels in Buffer Zones of Nature Reserves to Cater to Increased Local & International Interest

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• Eastern Sri Lanka Tourism Takes Off with 1,000 Star Class Rooms in Pasikuda

Sri Lanka to Provide Solar Power to the 10pct National Grid doesn't Reach in its bid for 100pct Electrification by 2012

06th May 2011, www.lankabusinessonline.com

Sri Lanka is to provide solar power for the 10 percent of homes that cannot be reached by extending the national electricity grid in its bid to ensure 100 percent electrification by 2012.

The Cabinet of ministers has approved a proposal by the power and energy minister Patali Ranawaka to introduce advanced solar powered white LED (light emitting diode) lighting products, a statement said.

The LEDs will be to power the basic lighting needs of about 150,000 homes and other locations beyond the reach of the grid.

About 10 percent of homes still depend on kerosene for lighting and most are beneficiaries of the state 'Samurdhi' welfare programme, the statement said.

The project will save 1.15 billion rupees spent on kerosene a year.

Related Info :

• Solar Energy Can Free Sri Lanka's Dependence on Fossil Fuels - Kanagalingam Gnanalingam, Rtrd Additional General Manager of Ceylon Electricity Board

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New Solar Power Station at Hambantota to Produce 737kw. Solar-Powered Street Lights Considered

27th December 2010, lankapuvath.lk

With the intention of overcoming the power crisis, focus is now on regeneration power sources.

Accordingly, with Korean and Japanese aid, Sri Lanka is to set up a Solar Power station in Baruthankanda, Hambantota said the ministry of Power and Energy.

The power station, which is the biggest solar power generation in Sri Lanka, is expected to produce 737 Kw of energy.

The first stage would be opened next August and the land has already been allocated. Construction is expected to commence in January.

Power and Energy Minister Champika Ranawaka said that the investment for this project would be Rs. 1.7 billion. It would be partly funded by Japan (Rs. 1.2 billion) Korea (Rs. 513 million) and the Ceylon Electricity Board (Rs. 153 million).

Sri Lanka would be able to save 429,000 litres of diesel used for power generation with the completion of the project while it would also assist in preventing the release of 963 tons of carbon dioxide to the environment.

The Ministry also plans to install solar-powered street lights in selected areas.

Related Info:
Solar Energy Can Free Sri Lanka's Dependence on Fossil Fuels - Kanagalingam Gnanalingam, Rtrd Additional General Manager of Ceylon Electricity Board

Sri Lankan Households Can Sell Solar Power to Ceylon Electricity Board. Pilot Project for Domestic Net Metering Started

Sri Lanka's New Renewable Energy Tariffs Displace Wind as the Most Expensive

03rd December 2010, www.lankabusinessonline.com

Sri Lanka's new tariffs for renewable energy show that dendro (wood) would be more expensive than wind and municipal waste heat would be paid the highest tariff, displacing wind as the most expensive source.

New tariffs released by the Public Utilities Commission in November 2010 say that municipal waste fired plants would be paid 22.02 rupees a unit (kilowatt hour), up from 15.31 rupees listed last year, under the so-called flat tariff scheme.

Municipal waste disposal is increasingly becoming a problem in Sri Lanka.

Dendro or wood based energy would now be paid a higher 20.70 rupees, up from 18.56 rupees, while the exorbitant rate 23.07 rupee rate paid for wind under the previous scheme had been cut to 19.97 rupees.

Renewables plants under standard contracts cannot be 'dispatched' or dis-connected from the grid during off peak times. They only have an energy charge and no capacity charge.

There have been suggestions by industry experts to give a peak and off-peak tariff for dendro plants so that they will have an incentive to operate at peak times.

Plants such as wind and mini-hydros do not have 'storage' but biomass (including municipal waste) can be run when needed.

At the moment, the CEB's cheapest thermal plant run on residual oil has a energy charge (variable cost) about 9.45 rupees a unit, while private combined cycles costs up to 16.00 rupees.

Biomass from agricultural and industrial waste would be paid 14.53 rupees, up from 13.88 rupees. Waste head recovery plants would be paid 6.64 rupees down from 9.55 rupees earlier.

Mini-hydro plants fabricated locally will be paid 13.32 rupees and others will be 13.04 rupees a unit.

Renewable plants smaller than 10 MegaWatts are connected to Sri Lanka's state-run Ceylon Electricity Board's grid on 20-year standard power purchase agreements, either on the flat tariff scheme or on a tiered scheme.

Under the tiered tariff, plant operators are paid a higher rate in the early years with a commitment to pay a royalty after the end of year 16.

Solar Energy Can Free Sri Lanka's Dependence on Fossil Fuels - Kanagalingam Gnanalingam, Rtrd Additional General Manager of Ceylon Electricity Board

11th January 2009, sundaytimes.lk, By Jagdish Hathiramani

The first impression of anyone discussing the future of Sri Lanka's energy landscape with retired Additional General Manager of the Ceylon Electricity Board (CEB), Kanagalingam Gnanalingam, must undoubtedly be that he is steadfast in his convictions that the large-scale adoption of solar energy is the only way to achieve a Sri Lanka free from its dependence on fossil fuels.

Currently, an independent consultant volunteering for organisations focused on renewable energy issues, particularly in the area of solar energy utilisation programmes, Mr. Gnanalingam first started researching solar energy in 1970 while at the University of Ceylon, Peradeniya. He continues his passion for all things solar to this day, sometimes spending as much as 15 hours a day on his research since retiring from CEB (aged 55 years) and migrating to Canada in 2001.

Considering his fascination with solar energy, it should come as no surprise that Mr. Gnanalingam's greatest influence was Sri Lankan solar energy pioneer, and his former teacher, Prof. J.C.V. Chinnappa, then Professor of Mechanical Engineering at the University of Ceylon, Peradeniya, who now serves as an Advisor on Solar Energy to the Australian Government. While a part of Prof. Chinnappa's team, Mr. Gnanalingam and others were credited with designing the first solar refrigerator working solely on solar energy as well as designing, constructing and testing a pressurised solar water heater in 1971.

Rural Homes
Continuing his calling in the solar field, Mr. Gnanalingam later worked at CEB as an engineer in the Energy Unit in 1984 where, together with other engineers, he was responsible for the introduction of solar in rural homes and schools, at that time sold at subsidised prices by CEB. Since these programmes proved to be successful, CEB left it to the private sector to take over and, at its highest point, there were more than 14 companies involved in this industry, supported by micro credit facilities lent by banks as initial costs were very high. He goes on to note that although his team's work was ultimately the cause of the first energy centre to be constructed by CEB with World Bank aid, a centre which used Solar Wind and Biogas Energy to feed a village in Tangalle, the project was abandoned when the electricity grid was extended to encompass this village. However, many solar home systems were later taken over as commercial ventures by private companies assisted by micro credit lending by DFCC.

Responding to views that solar energy may prove feasible for large scale power generation in Sri Lanka, Mr. Gnanalingam suggests that not only is solar energy useful for the rural poor with no access to the electricity grid, but it also has the potential for a much wider impact for the nation: "With the introduction of Net Metering and Tax relief by [the government] this year for renewable energy, we believe that now, with lower cost of Thin Film Solar Cells, it is viable to install solar panels in grid connected homes.

The energy generated during the sunshine hours of the day can be used or pumped back into the grid and the house metre will run in the opposite direction and reduce your monthly bill. Without a costly storage battery system this will produce reduction in the monthly bill with payback period of 2 to 3 years depending on where your house is and the present monthly consumption."

Not only is it feasible but, according to Mr. Gnanalingam, solar energy may prove to be the best choice for Sri Lanka's future, especially should the country wish to meet the high target set for itself to increase non-conventional, renewable energy to 10% in 2017 from a current level of 4%: "Very soon many developing countries like India and China are going for 20% of total energy used to be derived from Solar energy. Germany, even though it has only about half of the sunshine we have in Sri Lanka, has the maximum percentage of use in the world of solar energy in its system for generation of electricity." He adds that although natural gas 'has its place', it is currently very costly since it has to be totally imported like oil.

Wind Options
The wind environment in Sri Lanka, says Mr. Gnanalingam, is not ideal so, unless wind power plants are set up off-shore, making it very costly, there are no good wind options. However, he does endorse private sector moves to currently erect larger wind power plants in the Puttalam area, while further suggesting that there are good wind areas, such as in Mannar and in Jaffna, which may prove useful once peace is achieved. He also indicates that while Hambantota was previously determined to be an unsuitable location – “due to the presence of airfields and bird sanctuaries, the best sites in Hambantota were not available for the CEB’s [proposed] 3 Mega Watt Wind Power plant” as well as breakdowns caused by pollution from the sea air, etc. - the expected Hambantota harbour may improve this situation.

Therefore, suggests Mr. Gnanalingam, the only feasible choices left to Sri Lanka are wave energy, an area to be further explored since the country is on an island with large seashore; and solar energy. He further indicates that solar energy is bound to achieve greater efficiencies while becoming more cost effective. Recent innovations include Nano technology based printable cells featuring a 12% conversion solar energy rate and less expensive, while concentration solar cells, currently used in space vehicles, will be available next year and have a higher conversion efficiency (approximately 40%) when compared to today's crystalline silicone Solar cells which have maximum of 20% conversion efficiency.

Meanwhile, when asked whether there were any lessons learned from his adopted home, Canada, which could positively impact Sri Lanka, Mr. Gnanalingam has this to say: “Canada is introducing feed-in tariffs for Solar energy home systems similar to Germany, U.K. and Japan. They buy power from solar home systems owners at a higher price to promote this green Solar energy. This distributed electricity generation helps to reduce the transmission and distribution losses in the electrical system. These losses are high in the Sri Lankan grid which was as high as 16% last year. The extra cost incurred is recovered by a very small extra charge from all electrical consumers. We could achieve large reduction on this large loss by going for feed-in tariffs in Sri Lanka. Costly private power generation can be reduced and the fuel import bill for the country can be reduced with savings of valuable foreign exchange for the country”.

Finally, Mr. Gnanalingam identifies some important facts which should be included in the debate regarding whether renewable energy should play a larger role in the country’s future energy strategy: Currently, over 15,000 homes have obtained solar home systems, while small village micro hydropower schemes managed through electricity consumer societies have provided electricity to a further about 20,000 homes.

Costly Rates
Further, Sri Lanka has one of the costliest electricity rates in Asia as it was forced to go for costly oil generation from still more costly private power generation sources. Meanwhile, coal generation is not going to be cheaper as promised by the government as they will definitely tax the now costly coal like petrol.

Also, it is estimated that a single kerosene lamp emits 1 tonne of carbon dioxide over a lifetime of 5 years as well as producing soot and other health hazards and being very unsafe as it has resulted in many accidents and deaths.

So every year kerosene lamps are responsible for over 100 million tonnes of carbon dioxide emissions into the atmosphere.

Sri Lankan Households Can Sell Solar Power to Ceylon Electricity Board. Pilot Project for Domestic Net Metering Started

28th July 2010, www.dailymirror.lk, By Sumaiya Rizvi

For the first time in Sri Lanka domestic solar power energy could now be sold to the Ceylon Electricity Board (CEB) as a pilot project of the Net metering system, Minister of Power and Energy Patali Champika Ranawaka said yesterday.

“If there is an excess in the domestically produced solar power they can sell it to the CEB and if they have a shortage they will be automatically provided with electricity by the CEB,” said the minister.

The thin solar films have the capacity to generate 4.5 Kilowatts or electricity with a maximum of 23 units and a minimum of 12 units, Minister Ranawaka said. The net metering system in place at the house of industrialist B.A. Mahipala is the first of its kind and was done at a cost of Rs. 17 lakhs, the Ministry said.

The Power and Energy Minister added that households have to bear the installation cost of the net metering system and the solar paneling.

Image: Minister of Power and Energy Champika Ranawaka with house owner Mr. B.A. Mahipala inaugurating the domestic net metering system yesterday, where domestic solar power energy could be sold to the Ceylon Electricity Board (CEB). Pic by Indraratna Balasuriya.

Sri Lanka LOLC 48 kW Solar Power Array, the Largest Solar Power System in the Corporate Sector

02nd September 2010, www.lankabusinessonline.com

Sri Lanka's LOLC financial group commissioned a 48 kiloWatt solar power array that will supply 15 percent of energy needs at its head office in Colombo, reducing its 'carbon footprint', officials said.

"This is the largest such solar power system set up by the corporate sector in Sri Lanka," LOLC group chief executive Kapila Jayawardena said.

"This would reduce our dependence on the national grid by 15 percent and reduce our carbon footprint."

A 'carbon footprint' is the amount of so-called greenhouse gases usually carbon dioxide, emitted in the course of generating power used by an entity over a period.

Power minister Patali Ranawaka said Sri Lanka's per capita carbon emissions was comparatively low at 600 kilograms a year, compared to 2,200 for India, 5,600 for China and 24,000 for the United States.

He said the government's future power policy was placing more emphasis on renewable sources of energy.

At the moment Sri Lanka's state-run power utility, the Ceylon Electricity Board, generated about 40 percent of its energy through renewable sources, Ranawaka said. CEB has substantial large hydro capacity and also private grid connected mini-hydros.

Jayawardena said LOLC also had a motor vehicle service centre which harvested rainwater for 70 percent of its needs and 90 percent of its water was cleaned to 'drinkable quality' water and recycled.

The LOLC head office uses about 50,000 units (kilowatt hours) of energy a month. The firm already had used solar panels in its possession. It had spent 19 million rupees to import inverters and other equipment to connect the solar panels to the building's power supply.

Officials say the 19 million rupees system has a 10-year pay-back period, based on current tariffs of about 13.50 a unit for active power.

Large commercial establishments are charged on units of active power, a fixed fee and another charge for peak demand, which incorporates a cost for reactive power.

Reactive power is needed to transmit power, though not actually 'used'. Solar panels do not generate reactive power and though reactive power can be inserted with the use of capacitors.

Large hydro plants are one of the cheapest sources of renewable energy. Most other sources of renewable energy, especially solar, are expensive and need tax rebates and other subsidies to make them viable.

Korea Funds $50mn 500KW Solar Power Project in Hambantota, Sri Lanka

24th March 2010, www.dailynews.lk, By Ramani Kangaraarachchi

The Korean Government will grant US$ 50 million to install Lanka's first 500 KW grid connected solar power generation project in Hambantota.

It will also lend money for the Gampaha sanitary waste management yard.

Korea's Ambassador Choi Kichul said their Government is also considering promoting Sri Lanka among Korean investors in solar, wind and biomass power generation, clean development mechanisms, carbon credit, solid waste management, energy efficiency and transmission lines.

He was the chief guest at a seminar on Clean Development Mechanisms organized by the Sri Lanka Sustainable Energy Authority held jointly with Ecoeye of South Korea.

The Ambassador said there are also possibilities of sponsoring visitors from Sri Lanka to Korea's energy exhibitions to view latest technologies and technological developments in these sectors.

"We have an interest in assisting the Sri Lankan Government to meet the country's energy requirement by the implementation of a policy framework of increasing diversity of energy supply sectors specially in alternate technologies for better energy efficiency and utilization," he said.

He pointed out that engaging the private sector and civil society as stakeholders and partners is crucial to success of a green economy and the efforts to pursue sustainable energy.

Sri Lanka's First Grid-Connected Solar Power Project to be Set up in Hambantota. 500KW $50mn Project Funded by Korean Government

23rd January 2010, www.island.lk, by Ifham Nizam

Sri Lanka’s first large scale grid-connected solar power project of 500 kw power generating capacity will be set up at Buruthankanda, in the Hambantota district with funds provided by the Korean Government, Sustainable Energy Authority (SLSEA) Director General Chandana Samarasinghe said.

The Memorandum of Understanding to set up the 500kW plant was signed between the Korean and the Sri Lankan governments on Wednesday with the participation of Power and Energy Minister W. D. J. Seneviratne, Korean International Cooperation Agency Resident Representative Song Min – Hyeon, Power and Energy Ministry Secretary M. M. C. Ferdinando and SLSEA Chairman Dr. Krishan Deheragoda.

According to Samarasinghe the agent of the Korean Government would undertake the project up to the level of the grid connection.

He said that the project would function as the pathfinder for solar based power generation projects in Sri Lanka.

Being the first of its kind, the project would provide valuable knowledge required to operate a commercial scale solar power generation project and it would allay any fear of the investors about the solar (photo voltic)PV technology and drive investments in this sector.

The revenue generated from this project will be channelled to the rural electrification programme of the SLSEA which has already identified 12 rural villages for immediate implementation. Through the revenue generated, more than 100 families of the most vulnerable section of the community can be provided with a basic electricity supply every year, he added.

Sri Lanka 400kw Solar Project with Japanese Government

20th January 2010, www.thebottomline.lk

The Minister of Power and Energy John Seneviratne, is to sign the Memorandum of Understanding with the Japanese government for the construction of a 400 kW grid connected solar power generation plant at Buruthankanda, Hambantota, under a grant from Japan.

The Government of Japan has provided a grant of Japanese Yen 860 million (approximately Rs. 1,075 mn) to the project which will be implemented by the Sri Lanka Sustainable Energy Authority.

To address the issues on climate change and to access the clean energy, the government hopes to reduce dependence on fossil fuels for electricity generation in Sri Lanka. Development of renewable energy sources is now at a very important stage, with only hydropower being the only significant renewable energy sources for the electricity generation.

A massive 55 to 60 percent of the power supply was generated by diesel, while the share of hydroelectricity averaged between 40 and 45.

Electricity costs in Sri Lanka are among the highest in the world with all users paying high cost for industrial, commercial and domestic uses and driving away the investors. Average electricity tariff rates to industrial sector is from Rs 7.00 to 7.50 in Sri lanka; Indonesia 1.52 – 3.90; Malaysia 2.63 – 10.52; Singapore 4.32 – 6.78; Thailand 2.89 – 7.01, according to the Central Bank’s Annual Report of 2004.

The installed capacity in the country was 2,544 MW (Hydro and thermal combined) in 2006.

Demand for electricity in Sri Lanka is said to increase by about 10 percent annually.
Presently the daily electricity requirement of the country stood at 1.9 GW out of which one third was contributed by hydropower projects and the rest by thermal power plants.

Push for Larger Solar Power Plants Connected to the National Grid by Sri Lanka's Renewable Energy Promotion Agency

12th December 2009, www.lankabusinessonline.com, By Anushika Kamburugamuwa

Sri Lanka's renewable energy promotion agency is in a new drive to push larger solar power plants connected to the national grid in Sri Lanka though the technology is still relatively expensive.

In rural Sri Lanka small off-grid plants are being sold by a number of private firms and solar hot water systems are also being used in grid connected buildings.

Sunny Isle

"Sri Lanka considered as a solar hot spot due to many reasons," says Harsha Wickramasinghe, deputy director general of Sri Lanka's sustainable energy authority.

"One is the good radiation level available in the country. And we are far ahead compared to other countries using solar electricity for rural areas.

"To this date there are about 106,000 solar power systems in Sri Lanka."

The authority has standardized power purchase contracts (SPPA) for hydro and wind plant operators of under 10 MegaWatts. Under the contract the operators can sell power to the state-run Ceylon Electricity Board, the grid operator.

"There are many investors coming to see us trying to develop grid tied solar power system projects," says Wickramasinghe.

"That is you directly export energy to the CEB national grid. But unfortunately the technologies considered for that scheme under 10MW scheme does not includes solar energy as yet.
"But we have consulted certain analysis and found out solar power energy is expensive compare to other technologies like hydro power and wind power."

For small renewable plants a 20 year SPPA is given on a three tier structure. For the initial stage the developer is paid about 24 rupees a kilowatt hour or a unit of electricity for wind and 15 rupees for hydro. From year nine it falls.

From year 16 onwards after the capital costs is recovered a royalty will be paid by the buyer to the state. Wickramasinghe says wind operators will get about 22 rupees a unit on average.

Solar Costs

"For solar power lowest we can imagine it will be some where around 35 rupees," he says.

"But if you take the plant factor and the capital cost of solar power projects it is much above that. About 80 rupees per kiloWatt hour will be required to break even."

"But some developers are claiming that they can come around 35 rupees and even lower if the government is agreeable."

Critics say other than hydro most renewable energy sources are pushed to the people through powerful 'clean energy' lobbies. Tax payer money is used to subsidize renewable energy technology firms.

But other than dendro (wood) energy, most renewable energy sources do not emit pollutants.

Meanwhile cheaper thermal energy such as hydrocarbons are taxed at several stages pushing up their final cost.

Wickramasinghe says the authority is establishing a solar energy park in Hambantota, an arid area with low rainfall in Sri Lanka's southern coast.

"We will have closer to one MegaWatt of capacity up and running during next year," he says.

"So, after that we will conduct an evaluation of the solar resources in the country and then decide on a deployment calendar."

A recent government statement said that a 400 kiloWatt wind plant will be set up in Hambantota with a Japanese grant.

Net Metering

Meanwhile efforts are underway set up a net metering system where grid connected customers who have solar power units will be able to export power to the grid during daytime and deduct it from their bills.

"We have taken initiative to introduce net metering in Sri Lanka, that is a roof top system where people who can afford solar power system can have a roof top solar system," says Wickramasinghe.

"Presently it is available in the LECO (Lanka Electricity Company) served areas and it will be available in the CEB areas too."

"And you can export energy during the day time to the national grid and consume some of it during the night and the CEB or the LECO will act as an energy bank.

"So no money transaction will be there. But utility will show a reduced amount."

400kW Solar Plant in Hambantota with Japanese Aid, Helps Demonstrate the Sustainability of Commercial Scale Solar Power Generation

03rd December 2009, www.lankabusinessonline.com

The Japanese government will give Sri Lanka a grant of 860 million yen or just over a billion rupees to build a 400 kiloWatt solar power plant in the southern Hambantota district which will be connected to the national grid.

Investment Promotion Minister Anura Yapa told a news conference the island's Cabinet had approved the project aimed at introducing clean energy.

The plant will help to demonstrate to developers, lending agencies and equity investors the sustainability of commercial scale solar power generation, a government statement said.

"Development of renewable energy sources using solar power is vital due to the fact that only hydro power sources are used as renewable energy sources at present," it said.

The solar project will be implemented by the Sri Lanka Sustainable Energy Authority under the Ministry of Power and Energy.