FiT in Sri Lanka

Asoka Abeygunawardana
Adviser to the Hon. Minister of Power and Energy Executive Director - Energy Forum Asoka Abeygunawardana

Energy consumption per capita (Tons of oil equivalent (toe) per person)
7.8859 6.932

Per capita/day electricity Consumption USA - 125 kWh/day EU - 80 China - 20 Sri Lanka - 12
4.519 4.187 4.1353 3.8946

1.316 0.491 0.478

Electricity access in South Asia in 2009

SOURCE: IEA, World Energy Outlook 2010
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Afghanistan Bangladesh Nepal Pakistan India Sri Lanka

Sri Lanka 100% electrification by 2012

About 5 million hh Vidulamu Lanka - Grid extension for 450,000 hhs Viduli Athwela - Concessionary loans for grid connection 30,000 hh Grama Shakthi - Off-grid renewables 130,000 + 150,000 hh

Power consumption Percentages - 2009

HP SL 2% 1%

GP 23%

Domestic 41% IP 33%

Religous 0%

Domestic Sector Power Consumption Distribution 2009

120% 100% 80% 60% 40% 20% 0% 5% 0 16% 20 27% 30 48% 50 57% 60 73% 80 81% 90 100% 300

Consumption

Low carbon lifestyles

General Purpose Distribution

Small Medium Large

Industrial Purpose Distribution

Small Medium Large

0% 1%

11%

0% 9% 40%

38%

99% 51%

91% 52% 8%

GP Connections

GP consumptions

IP IP Connections Consumption

Power Generation in Sri Lanka 2009

Oil 60%
(18 USD cents/Unit)

Hydro 40%
(3.5 USD cents/Unit)

Electricity Demand Forecast - 2010-2030 Capacity MW

8000 7000 6000 5000 4000 3000 2000 1000 0

Not due to poor, but due to rich, and the willingness to be rich

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

CEB Generation Plan - 2009

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0

Coal - 4000 MW; 70% of the capacity & 85% by 2025 NC Renewable Energy - 225 MW; 10% by 2015 - A carrot for the environmentalists

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cumulative new Oil Cumulative new Hydro Cumulative Coal MW Oil

Qatar

United States

Singapore

Japan

Germany

United Kingdom

China

India

Sri Lanka

55.4

18.9 12.1 9.8 9.6 8.9 4.9 1.4 0.6

Metric tons of CO2 emissions per capita Per Annum

CEB Generation Plan - before 2010 April Projected CO2 % Increase in Sri Lanka (Electricity Generation Expansion Plan- 2008 )
1000 900 800 700 600 500 400 300 200 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

850% 230%

World Bank Study - 2010 May 'Sri Lanka: Environmental Issues in the Power Sector' "The EIPS analysis confirms that coal-fired power plants, complying with Sri Lankas environmental regulations, should be the technology selected if cost minimisation is the primary objective of policy." "... the analysis indicates that the reference case, involving coalfired plants, does not lead to significant increases in local environmental impacts." "... the stack height and population weighted emissions are lower than those produced by the oil-fired plants today." "--- CO2 emissions increase on a per capita basis means Sri Lankas 2028 emissions would be an order of magnitude lower than per capita emissions in the United States this ten-fold increase barely registers when compared to the remainder of the world." - page 98

Latest target of the Sri Lanka Government

Carbon Neutral Growth by 2020

Triple E Concept: Energy - Economy - Environment A single solution for energy supply, economic development and protection of the environmental Provide basic energy services at an affordable price - Low cost power for basic needs Janahitha Consumer tariff (70% of the population consumes only 40% of electricity) Provide quality uninterrupted secondary power at a cost reflective tariff - Expensive power for secondary needs encouraging energy efficiency

Neutral Growth by 2020 - Role of FiT Above 25 MW - should have government shares Between 10 MW to 25 MW - negotiated price Less than 10 MW - First come first serve basis Avoided Generation Cost - early 1990 Lack of transparency in calculating the actual avoided cost Hidden subsidies given to fossil fuel Generated enthusiasm for mini-hydro power Technology Specific Financial Cost Reflective Tariff - (Flat and 3 -tier) - 2007 Generated enthusiasm for mini-hydro and wind power There was no way to meet the additional cost A Cap based on Technology Specific Avoided Economic Cost- 2011 Cost reflective consumer tariff Strict on 10 MW rule Benefit for local value addition Open process after the first applicant

Neutral Growth by 2020 - Role of FiT Avoided Economic Cost of Renewable Energy Technologies
In the Sri Lankan context, considering the life time of a new power plant, renewable energy based electricity will be economically viable than imported fossil fuel based electricity : Current subsidies on fossil fuel- Fossil fuel is subsidized hence true cost should be considered Impact on foreign reserves - As there are no proven fossil fuel reserves in Sri Lanka, fossil fuel is imported and hence economic costs should be considered Possible future fossil fuel price increases - Fossil oil, gas and coal prices will increase drastically during the next 30 years due to depletion resources, lack of infrastructure to cater to the increasing demand and increasing environmental considerations Carbon benefit - Carbon neutral technologies have a negative cost Decreasing trends of capital costs of renewable energy - Capital costs of renewable energy are coming down drastically due to increased research and development and due to wider application of the technologies Advantages of distributed power- If the distributed renewable energy generation is significant in capacity and reliable in energy output, then the generation, transmission and distribution costs and losses will be less

New Approach- Carbon Neutral Growth by 2020 Avoided Economic Cost vs Levelized Tariff-2011 (USD Cents/kWh)
30 25 20 15 10 5 0 Benefit to the farmer Carbon benefit Capacity charge Fuel price increase (escallation 5%/y) NPV Import Tax - 10% Subsidy on fuel Avoided cost

Mini Dendro Dendro Wind Mini hydro hydro (AEC) (tariff) (AEC) (AEC) (tariff)

Wind (tariff)

Levelized tariff for 2011

FiT in Sri Lanka - Flat tariff All inclusive rate for years 120 (LKR/kWh)
25.00 Mini-hydro 20.00 Wind Biomass 15.00 Agricultural & Industrial Waste Municipal Waste Waste Heat Recovery Wave Energy 5.00

10.00

2007

2008

2009

2010

2011 (proposed)

New Approach- Carbon Neutral Growth by 2020 Major Technical issue - systems ability absorb fluctuations

Solution - Pump storage Potential sites

Samanalawewa (Keriketi Oya) 1000 MW Maussakele (Adam's Peak Falls) 500 MW Randenigala (Halgran Oya) 500 MW Kotmale (Maha Oya, Gurugal Oya, Kuda Oya) 900 MW Upper Kotmale (Dambagastalawa, Agra Oya) 600 MW Total 3500 MW

New Approach- Carbon Neutral Growth by 2020 Long-Term Action Plan

A detailed study for forecasting the power sector demand growth considering all development plans of the Government Formulate a Government master plan for reducing capital costs and getting technical assistance To conduct a thorough study on dendro power prices, and potential A comprehensive study on absorbing wind and solar power to the system. Include biomass co-firing option for coal power plants Take necessary steps to claim carbon credits for renewable energy and other low carbon emitting fuels Explore the possibilities for Pump storage Design financing schemes for meeting the up front costs Rehabilitation of Laxapana Hydro Power plants Explore possibilities of having a LNG plants. Build the capacity for establishing Nuclear power plants to keep the option open

New Approach- Carbon Neutral Growth by 2020 in MW Hydro Power Potential = 1290+150+240+280= 1960 (40% pf) Dendro Power Potential = 10 + 900 (70% pf; 3,000 BEASL estimate) Wind Power Potential = 23 +90 + 3000 (30% pf; 20,000+24,000 NREL estimate) Solar Power Potential 4.5 to 6.0 kWh/m2/day (16% pf) Wave Power Potential 200 (65% pf; 2000 NARA estimate) OTEC -Trincomalee Canyon is the one of the world best places Geothermal Potential 10 MW x 3 (GSMB estimate)

New Approach- Carbon Neutral Growth by 2020 Long-Term Generation Expansion Plan CO2 Emissions (kTon)

A Possible Energy Mix by 2030

(If we are to continue with the current electricity consumption trends)

20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 High Coal Option Energy mix option