Straps

• Power sector in need of reforms to streamline response to local and international investments
• CEB’s debate over 70% renewable energy target announced by President delayed gazette 

By Asiri Fernando Sri Lanka is exploring the possibility of exporting renewable energy to Singapore by using offshore wind farms, State Minister of Solar Power, Wind and Hydro Power Generation Projects Development Duminda Dissanayake told The Sunday Morning in an interview held last week. However, Dissanayake acknowledged that the power sector in the country was in need of reforms and said the Government was trying to streamline the process used to respond to significant interest by the local and international industry to meet the national goal of securing 70% of Sri Lanka’s power needs through renewable sources by 2030. According to Dissanayake, Sri Lanka plans to issue a clear roadmap for the policy implementation by the end of the year. Sri Lanka plans to generate close to 9,000 Megawatts (nine Gigawatts) of renewable energy by the end of the decade to meet the 70% target. However, the opinion of the State utility provider – the Ceylon Electricity Board (CEB) – does not seem to facilitate the national policy. Dissanayake said that foreign investment into renewable energy projects would not be allowed to cause a disadvantage to the local industry which was keen to invest in them. Following are excerpts of the interview: Has Sri Lanka conducted an assessment of the renewable energy potential of the island and what potential does Sri Lanka hold? Who did it? Is the report public? How much GW potential is mapped? Yes, the Sustainable Energy Authority (SEA) has carried out a survey of how much renewable energy potential Sri Lanka has; it has formulated a report on how much onshore and offshore green energy potential Sri Lanka holds and created an energy map. Our plans to reach the 70% renewable energy target is based on their mapping.   How has the renewable energy industry responded to the call for interest, following the policy decision to achieve 70% renewable energy by 2030? When we called for Expressions of Interest (EOIs), we did not anticipate that we would get such a big response. The response has been great. We have received nearly 600 proposals. There are a number of local and foreign companies lining up to invest in renewable energy projects. I think this is a good opportunity for Sri Lanka, given our current economic climate. This is an indication that investors are keen on coming to Sri Lanka. With the 70% target, we plan to add around 9,000 MW of power generation to the national power grid. Is there scope for the national renewable targets to be expanded? Who will draft the long-term plans to reach the set policy goals? As we reach 2030, we may have to revisit generation needs as the demand may be greater in several years. Therefore the possibility of adding to it is there. There is a scope for expansion as we can look at bringing in part of the public transport sector to be fuelled by renewables. Currently, we spend a lot of foreign currency to import fossil fuels to run the transport sector. There is a lot that can be done there and this Ministry is studying that approach. For the 70% target, the SEA is planning the renewable options. The CEB is drafting a generation plan with a focus on how to absorb the new power sources to the grid. The power generation plan which the CEB launched after the national policy was announced was aimed at a 50% renewable energy target by 2030, not the stated 70%. Why did this happen? We got the CEB on board to reach this 70% target with difficulty. Even though the President had issued the 70% target, the CEB was debating the details of the target and wanted changes made. This debate went on for some time. This even caused a delay in the 70% target being gazetted by the Power Ministry. Now it has been gazetted and the CEB will have to fall in line with national policy and deliver. The CEB had raised a number of technical questions, particularly regarding the changes that would be needed to the power transmission system, which would have been costly. This Ministry was of the view that we cannot postpone implementing national policies using implementation cost as an excuse. If the CEB has issues, it needs to inform the Government what it requires to fulfil national policies; then it is up to the Government to provide solutions. Finding solutions to funding problems is not the role of CEB engineers.  This is a problem we face in Sri Lanka. Some people don’t do their job and try to do other people’s jobs. CEB has to focus on implementing national policy. It needs to understand its role and perform.    Does Sri Lanka have the necessary skilled professionals to plan, implement, and manage such renewable energy projects? If not, is your Ministry looking to bring in the required expertise? We are of the opinion that we have the knowhow and experience within the local industry to build the renewable energy generation plants that are required. We have local industry entities which have built green power plants overseas too. There are companies in Sri Lanka that manufacture some components needed, like transformers, turbines, and cables. There is room for local industry to grow with new technology. There has been criticism about the lack of transparency surrounding the recent call for EOIs for projects by the Sri Lanka Sustainable Energy Authority (SLSEA). How do you respond to these concerns and what is being done to improve the transparency of the process? In the first week of January (2022) we gazetted the new regulations and process for the proposals. It outlines how to file an application to the SEA regarding a renewable energy proposal and what the process is. Now it is transparent for anyone to see how the process works. In the past when an investor planned to build a renewable energy project, they had to get approvals from about a dozen or more State agencies and ministries. When I was tasked with this portfolio, we knew that a new system was needed to streamline the process. For example, earlier the SEA was envisaged as a one-stop shop to deal with all matters related to renewable energy. However, over the last few years that did not happen; the SEA had become another hurdle to jump. But with the new regulations issued, that has changed.  Now all State sector stakeholders sit on the SEA Board, they are given a project proposal, and when they return to a meeting in a month, each stakeholder needs to submit in writing if they are giving approval for the project or not. We have however given a period of three months for the Environmental Impact Assessment to be submitted, this is because we can’t make mistakes when dealing with the environment of our country. Therefore, now the process is transparent; and we have clear and announced timelines for project progression based on the new regulations. How is the rollout of the proposed projects planned? What timeline will be followed till 2030? Is there an investor roadmap for the 2030 energy target? Based on the EOIs we have received, we are planning a schedule from 2022 to 2030. A roadmap is being developed at present. The roadmap and the CEB generation plan will need to be in sync. The ministries, SEA and CEB will plan out how much of the annual and long-term target will be met by hydro, solar, wind (both onshore and floating), etc. The roadmap will be ready before the end of this year.   What type of renewable energy projects will be launched this year or in 2023? How much power are they expected to contribute to the national grid once completed? We will be prioritising floating solar as there will be less issues in sourcing land for such projects. Similarly, offshore wind will be a focus in the early stages of the roadmap.  Solar projects on private lands will also be quickly implemented. By the end of 2023 we anticipate seeing new renewable power generation of around 1,000–1,200 MW ready to be added to the national grid. How does the Government plan to connect renewable energy projects to the national grid? Will the grid be updated? What needs to be done? For the generation volume expected by the end of 2023, the national grid may need a few modifications. One of the key issues the CEB was arguing about was that it didn’t have funds for the transmission development to facilitate the new projects. However, what we are trying to do is to include the transmission cost in the renewable energy power project proposals.  The Government plans to repay the transmission cost incurred in the projects over a 10-year period. We do not want the transmission cost included in the generation tariff. We are looking at solutions for these bottlenecks. Once we map out where the new renewable power plants will be built, we can then look at what technology and funds are needed for the CEB to modernise the national power grid accordingly. Some in the renewable energy industry have blamed the CEB for dragging its feet on green energy and state that the CEB uses bureaucratic mechanisms to create challenges for them. What is your opinion on these allegations as the Minister responsible for renewable energy projects and what is being done to streamline the process? We had some issues with the CEB before, but they are being ironed out. Even the CEB has now come to the realisation that the 70% target is a national policy it needs to adhere to. Further, it is very clear that the world is heading towards a renewable energy generation market. There are a few issues about the CEB that persist and need to be cleared up. For example, if you plan to install a rooftop solar system, you will want to have it approved and then connected to the grid as soon as possible. You wouldn’t want to waste your funds and time. We need to fast-track the process of clearance and connecting to the grid; we find that there are still delays in this process. We are working to streamline it. Do you think that the power and energy sector needs reform? Certainly, I do. We have already informed the President that in order to reach the 70% target of renewable energy, we will need some new mechanism like a presidential task force. If not, we are wasting time trying to get permission from a number of State institutions and the process gets delayed. We need a streamlined process. What new incentive will the Government offer the public and State enterprises to move towards more renewable energy options? We are also studying the possibility of encouraging State institutions and enterprises with rooftop space to install a solar power system to reduce their power consumption bill along with other waste reduction mechanisms. This can be done through an Indian line of credit provided to Sri Lanka by the Indian Government. The extra power generated can be sold to the grid and used to repay the Treasury loan.  For the public, we have provided a good rate for rooftop solar to be sold to the national grid. We have offered good terms through the contract for consumers. Once the anticipated renewable energy project begins to come online and power generation costs begin to reduce, how soon will the reduction be reflected in the power tariffs? It is too early to predict tariff reductions. As more renewable power comes online, power generation costs should reduce so tariff reductions in the future is a possibility.   Indian and Japanese conglomerates have indicated interest in renewable energy projects in Mannar and in the North. Will the Government follow the established EOI and tender process to award such contracts? If not, what message will that send to other investors? Given the current economic situation, Sri Lanka needs foreign investments. However, this does not mean that local investors will be disadvantaged. Also many instances of foreign interest shown for the EOI included a local partner. The local renewable energy industry has highlighted the possibility of it becoming an export for our dollar-strapped economy. What are your views on this? Can Sri Lanka export renewable energy? Yes. We are currently looking at some proposals for exporting energy. One such proposal looks at the possibility of offshore wind power based off the southern coast of Sri Lanka being harvested and exported to Singapore. The Singaporean Government has indicated its interest in purchasing renewable power from Sri Lanka. Discussions in this regard are ongoing and if successful, we may be able to export energy to other countries in the future as well.