When Worlds Collide #64: Good Governance for Clean Energy

Text of my ‘When Worlds Collide’ column published in Ceylon Today Sunday newspaper on 28 April 2013

Cartoon by Ron Tandberg

Cartoon by Ron Tandberg

One of my favourite cartoons on energy is one drawn years ago by Australian cartoonist Ron Tandberg. It shows two men standing on a bare land, looking down at the ground. One says to the other: “There must be a source of energy down there!”

Overhead, meanwhile, the sun looms large and blazes away.

As we reel from the latest energy shock – delivered by the state owned electricity monopoly, the CEB – I wonder whether all 20 million of us have become like those two narrowly focused men.

How can our tropical island plug into the sun, wind, trees and the ocean to meet more of our energy needs? Why don’t renewable energies produce a larger share of our energy mix? Who or what are the bottlenecks?

Such questions pop up each time there is a hike in oil prices or electricity tariffs. We must not allow the quest to die down after a while.

The main — though not the only — reason for hiked electricity tariffs is our heavy reliance on petroleum to operate thermal power plants that generate a lion’s share of grid energy.

Imported fossil fuels power several different sectors: transport uses 50%; power generation 28%; industry 8%; and household and office 14%.

In 2012 Sri Lanka spent USD 6 billion importing oil. Asoka Abeygunawardana, Executive Director of Energy Forum, an advocacy group, points out that this was 1.5 times the total export earnings from tea, rubber and coconut in 2011. The Rupee’s depreciation in recent months has made matters worse.

Despite recent prospecting, we have yet to find our own oil deposits. In a recent analysis, Asoka cautioned that oil import costs could ‘at least double’ in the coming decade. Political or climatic disruptions can also disrupt supply of foreign oil.

Energy independence

All the more reason to work on ‘energy independence’ by developing home-grown renewable energy sources as well as improving energy use efficiency. Achieving these twin goals require the right mix of policies, regulation, technologies and investment.

The National Energy Policy and Strategy (NEPS) of 2006 set a goal of at least 10% of grid electricity to be generated from non-conventional and renewable energy sources by 2015. It’s not clear if this target could be achieved.

Sri Lanka’s total installed electricity generation capacity in 2011 was 3,141 MegaWatts (MW). Peak electricity demand was 2,160 MW and the annual electricity consumption was 10,000 GigaWatt-hours. Two thirds of this is thermally generated.

But every household is not on the grid. Despite political slogans promising electricity for all by 2012, some locations are just too remote to be connected to centrally generated power.

And there is no need, either. The global trend, especially for domestic and small scale electricity users, is towards decentralized and distributed energy systems. In this scenario, users generate power on site, tapping into renewable sources available locally, says Lalith Gunaratne, a pioneer in off-grid domestic solar power in Sri Lanka.

He adds: “However, it has to move this way along with SMART grid technologies where the energy mix will be decentralised with technologies such as solar, wind, small hydro, biomass and biogas (waste to energy), ocean based technologies and geothermal complementing larger thermal technologies.”

Of all the renewable energy types, the simplest is solar photovoltaic (PV) technology. Off the shelf modules have been on the market for over a generation. Catching sunlight on a rooftop requires no permissions of any kind.

In the late 1980s, three entrepreneurs – Lalith Gunaratne, Viren Perera and Pradip Jayewardene – pioneered local assembling and marketing of solar PVs. Their company, named Power & Sun (Pvt) Ltd, offered simple, easy-to-use solar units for rural homes not yet connected to the grid.

Branded as SUNTEC, their basic solar unit ran five light bulbs plus a radio and a black and white TV. It sold for LKR 7,000 in 1988. Bulbs and battery were extra.

Grassroots Revolution

By reaching out to the grassroots through innovative marketing schemes and tech support, the SUNTEC team ushered in a quiet revolution. They not only provided clean, safe and cheap energy but in that process, raised aspirations and inspired dreams. (Read their story at: http://tiny.cc/SunTec)

During the 1990s, other companies — and non-profits such as Sarvodaya and SoLanka — entered the domestic solar market. The World Bank infused funding. Thanks to these efforts, over 100,000 homes adopted solar PV within a dozen years.

Sir Arthur C Clarke with Sri Lanka's solar PV pioneers from SUNTEC. L to R: Ajit Chanmugam, Viren Perera, Clarke, Mahes Perera and Lalith Gunaratne. [Photo courtesy Lalith Gunaratne]

Sir Arthur C Clarke with Sri Lanka’s solar PV pioneers from SUNTEC. L to R: Ajit Chanmugam, Viren Perera, Clarke, Mahes Perera and Lalith Gunaratne. [Photo courtesy Lalith Gunaratne]

While the solar market still has room to grow in villages, a second solar revolution is urgently needed in cities and towns. Higher consuming homes, offices and other buildings in Sri Lanka don’t have simple and affordable solar energy solutions.

Self-generating electricity from renewables is slowly picking up, partly encouraged by the introduction in 2009 of net metering. This allows private individuals or companies to “sell” their surplus power to the national grid (the transaction happens in kind, not cash). A two-way electricity meter enables this process.

But harnessing the Sun can almost cost the Earth. For example, a 1 kW solar system is currently priced around LKR 700,000.

“Considering the cost of individual PV panels sold in the market and those of the net-metering inverter systems, there is a wide price difference. The vendors seem to be fleecing the customers,” says physicist Dr Janaka Ratnasiri.

In a recent article, he urged state research institutes involved in electronics to locally produce inverters and help bring down costs.

Energy security

Ensuring energy security and independence will take some serious investments. While initial costs are high for most renewables, their running costs are much lower. In the long run, the investment can be more than recovered.

“Sri Lanka has to kick-start both renewable energy and energy efficiency technologies on a long-term and concessionary lending scheme,” says Asoka. He estimates the cost to be around USD 30 billion.

At first glance, it seems a massive price — but is only five times the 2012 oil import bill. Over time, the avoided oil and coal import costs would be much greater.

Renewables are not a panacea for all energy problems. Some limitations apply, such as cloudy days that reduce sunshine intensity. Their contribution to the grid needs to be balanced by power from more conventional sources. At least until storage systems get better…

“Renewables have an important role in any developing country energy mix as a part of the national energy supply security strategies,” says Lalith. “Yet, thermal energy technologies like oil, coal and gas will not go away in a hurry. Most of them, unless we have large hydro, will provide base load power from large centralised stations for two or three more decades.”

Sri Lanka’s large hydro potential is now almost fully tapped. Actual hydro power generation varies from year to year depending on rainfall.

Governance crucial

The energy sector can quickly become a sink for large volumes of public and private funds — unless there is an effective regulatory process.

“Countries like the Philippines have developed a sound regulatory framework — they have encouraged private sector to develop solar and wind farms, waste to energy and geothermal projects, which the utilities buy at reasonable prices,” says Lalith, who has worked across Asia and Africa as a renewable energy specialist.

He adds: “They have also created a transparent spot market for the purchase of a certain percentage of their electricity needs…The important issue for Sri Lanka is to create a long term vision for the energy sector based on integrity. Consumers pay a huge price for lack of governance and transparency, and for corrupt practices rampant in the sector.

Good governance as a precondition for clean, affordable energy? Now that’s something to dream and strive for!

Follow me on my blog: http://nalakagunawardene.com, and on Twitter: NalakaG

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About Nalaka Gunawardene

A science writer by training, I've worked as a journalist and communication specialist across Asia for 25+ years. During this time, I have variously been a news reporter, feature writer, radio presenter, TV quizmaster, documentary film producer, foreign correspondent and journalist trainer. I continue to juggle some of these roles, while also blogging and tweeting and column writing. There's NOTHING OFFICIAL about this blog. In fact, there's NOTHING OFFICIAL about me! I've always stayed well clear of ALL centres of power and authority.
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