Why does Sri Lanka need Dendro Energy?

The energy crisis

  1. Sri Lanka needs at least 150 MW to be added to the generation capacity every year to meet the projected 7-8% growth in demand for electricity
  2. We have nearly exhausted all hydro capacity except for about 200 MW of Mini Hydro
  3. The future generation will need to be thermal which is currently based on imported fossil fuel only
  4. This means increasing costs and vulnerability to world fuel prices and insecurity of supplies
  5. The true cost of imported fossil fuel based electricity should include the infrastructure costs such as fuel unloading and transfer facility when comparing with alternatives
  6. The requirement of Foreign exchange for net import of petroleum fuels already exceed the total earning form export of tea, and will surpass all FE earnings from Tea, Rubber and Coconut by year 2008

The Opportunity and Benefits

  1. The major portion of the increasing demand can be met by using indigenous bio fuels for thermal generation, which utilizes the same technology as coal. We propose that 50% of all future thermal based electricity generation should be targeted from Dendro energy. The local fuel wood resources available are adequate for this.
  2. The supply of fuel wood can be major boon to rural farmers as a subsidiary income by part time activity. We target 1000 MW by year 2015 which will pump in Rs 15, Billion annually to the rural economies
  3. The availability of foliage from the Dendro plantations will over come the main barrier for the development of the dairy industry. The above target will generate enough fodder to produce 2700 Million litres of milk with a value of Rs 81,000 million.
  4. The use of the foliage or the dung from the dairy farms is equivalent to 400,000 tons of Urea annually with a market value of Rs 2800 Million
  5. The above avenues will generate an income of Rs 235,000 per year for a family having one Ha of Dendro plantations and Six cows. By integrating with the Samurdhi project, we could alleviate abject poverty (10 % of population) in Sri Lanka in 10 years.
  6. The distributed generation of electricity will reduce the transmission losses currently at near 20% , and will promote private sector investments in small power generation plants say 5- 25 MW , which will promote centers of economic activity in the rural areas. The burden on the State for investments in the energy sector will be minimized.

What Needs to be done

  1. Implementation of the cabinet decision dated 7th September 2005. Grant a tariff of Rs. 8.50 per kWh for the first 50 MW of Dendro power Projects. For power plants with capacities less than 5 MW, this would require a contribution of Rs. 3.00 per kWh from the Government. The 1 MW power plant at Walapane has been stopped due to non-implementation of this. For this purpose Rs. 25 million per year is needed. Treasury to be directed to provide Rs. 25 million immediately for this purpose.
  2. State commitment to generate 50% of future thermal based generation from Dendro resources and firm directive to the CEB to achieve this target.
  3. Proactive role by the CEB to streamline the approval process and development of the grid to accept the Dendro Power generated in the rural areas.
  4. Development of the dendro plantations (targets already being set by the Coconut Cultivation Board as per cabinet decision to declare Gliricidia as a National Plantation Crop).
  5. Appoint two senior officials from Ministry of Power and energy and Ministry of Finance to implement the two Cabinet decisions.

Present Status

  • Technical viability of Energy Plantations and Energy Conversions have been proven
  • Economic viability in heat applications has been established. Many commercial facilities are in operation. Many more are expected in the future, once the plantations reach adequate extent
  • Many investors are convinced that with scaling –up to economically attractive levels, biomass based power generation is commercially feasible. Many are ready to embark on Grid-connected biomass projects on a commercial basis. Awaiting the implementation of the Cabinet Decisions.

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