Sri Lanka towards a greener future

ADB assists the transition to renewable energy

As a developing country, Sri Lanka’s demand for electricity is going to increase in the years to come. It is important for the country to secure its energy future by focusing on the development and adoption of renewable sources of energy to meet this growing demand. This interview focuses on an outlook for the Sri Lankan power sector and Asian Development Bank’s support in helping Sri Lanka achieve its renewable energy goals. In 2021, ADB approved a new energy policy to support universal access to reliable and affordable energy services, while promoting the low-carbon transition in Asia and the Pacific. Biznomics in conversation with ADB’s country director for Sri Lanka, Mr Chen Chen, shares insights into the importance of renewable energy for Sri Lanka and the futurist goals Sri Lanka hopes to achieve with the support of ADB. Mr Chen Chen is a professional on international development with over 20 years of experience across the region of Asia and the Pacific. He is skilled in infrastructure investment (development, asset management, and finance), as well as development strategy and policy analysis. Mr Chen holds a Ph.D. in Civil Engineering from Virginia Polytechnic Institute and State University (Virginia Tech) in the United States, and has authored sixteen publications on a variety of topics related to infrastructure and development.

Is 100% electricity generation through renewable energy a realistic objective?

It is possible for any country to generate 100% of its electricity through renewable energy and is also important for the country to set such an ambitious target. We believe this is the future we are looking forward to, not just for Sri Lanka but also for the whole region of Asia, the Pacific and the whole world. This objective is even more important when we view it in the context of climate change. At the recently concluded COP26, Sri Lanka made a commitment to achieve carbon neutrality by 2050. The transition to renewable energy will be a key pillar of Sri Lanka’s actions towards meeting the target.

At present Sri Lanka generates around 40% of its electricity demand through renewable energy sources. Across the globe, the rapid transition – from a predominantly thermal-based conventional system to a renewable energy-based system will be driven by the reductions in the cost of renewable energy, technological advances, socio-economic benefits, and the impact on climate change. However, this transition to renewable energy requires careful planning considering energy security, technical, economic, financial, social, and environmental implications. Usually, this process is carried out in stages designed in accordance with natural endowments, technologies, institutional capacity, and policies.

Although a successful transformation is technically possible, it will require the timely introduction, review, and adjustment of policies, as well as concerted, coordinated, and sustained efforts from all stakeholders.

What challenges does the country face in making this vision a reality?

The most critical challenges for renewable energy development include attracting adequate, usually significant, capital investments and facilitating the transition in an efficient and just manner. A conducive business environment is the first key to success in many countries. To encourage private sector participation, a policy framework is required to minimize regulatory uncertainties and streamline statutory processes.

Due to the fact that non-conventional renewable energy sources, such as wind and solar, require significantly more generation capacity additions than a conventional power plant to serve the same level of demands, related infrastructure, such as renewable-energy ready grids should be developed to timely accommodate the growth of renewable energy. For instance, a solar power plant would require the capacity of approximately three times of a conventional power plant to generate the required energy at a given time interval.

Finally, new technologies may help a country to leapfrog in the transition process. Technologies such as gridscale battery energy storage pumped hydro, floating solar, offshore wind etc. may be considered in a phased manner to enhance renewable energy penetration while addressing challenges such as cost-effectiveness and land availability.

What types of renewable energy projects are best suited for Sri Lanka?

Sri Lanka, being a tropical island, has huge potential to harness hydro, solar and wind power generation in scale. Our country has already harnessed most of its hydropower potential. Most remaining potential sites are in advanced stages of development, except for some mini and micro-hydro’s. Several initiatives of solar and wind power development are ongoing. Moving forward, floating solar and offshore wind may be gradually developed to overcome challenges in land scarcity and socio-environmental and biodiversity impacts. It’s also important to keep an open mind to other emerging technologies too, such as wave, tidal, and ocean thermal energy etc.

What role does the ADB play in achieving this?

ADB is one of Sri Lanka’s long term development partners in the power sector. We are providing holistic support to renewable energy transformation. Our assistance will be guided by ADB’s new energy policy which was just approved last October, and focus on increasing renewable energy deployment, supporting energy efficiency, expanding the power evacuation facilities to enhance renewable penetration, and improving the reliability and quality of the power supply.

Some of our recent assistance to renewable energy include (i) the development of the 100MW Mannar wind power generation project (the first large scale wind farm in the country); (ii) 30.5 MW Moragolla hydropower plant; (iii) a credit line facility to install about 70MW of solar rooftop capacity; and (iv) the technical studies of specific subjects for prospective renewable parks at Siyambalanduwa, Pooneryn, and Mannar. This is in addition to ADB’s continuous support to strengthen the transmission and primary distribution networks to facilitate the absorption of more renewable energy into the system. ADB through its sovereign and non-sovereign operations will continue to support Sri Lanka to achieve its vision of a greener power sector. More importantly, as a development bank for Asia and the Pacific, ADB stands ready to mobilize the knowledge required in the renewable energy transition.

What opportunities will the local producers have when making this transition, and what is the estimation of green job opportunities resulting from this?

In order to meet the government’s target of 70% renewable energy for power generation by 2030, an addition of about 8GW of renewable energy installations would be required considering future demand forecast. This is significant considering that the total installed capacity of the country (both conventional and nonconventional renewable energy) at present is around 4.3GW.

Currently, Sri Lanka doesn’t have a well-developed manufacturing industry for renewable energy. With proper planning and policy reforms, the scenario of renewable energy transition may catalyze the rapid growth of an ancillary industry supporting the primary renewable energy generation, which will create jobs and promote greater economic productivity. This transition will incentivize innovation and research in the power sector. Eventually, this transition is likely to create immense opportunities for local service providers.

It will also provide opportunities for local service providers to collaborate with global and regional renewable energy players as well as international markets in the space of renewable energy. If Sri Lanka can become a regional or global centre for renewable energy, the whole economy will benefit.

How important is developing local competencies and expertise, when it comes to achieving renewable energy goals?

Renewable energy is a fast evolving industry. At the same time, it is an industry that is highly expected to perform in the battle against climate change. Developing competencies and expertise timely and adequately is a challenge for all players in the space. Forerunners in this race not only will be rewarded by the local market but will also gain an edge in the regional and global markets. Therefore, the importance of building competencies or a competence early and firmly can’t be overstated.

ADB has been contributing in different ways to build capacity in the energy sector to handle these new challenges. One of the most recent examples is our support to establish a pilot micro-grid system and a research laboratory at the University of Moratuwa in collaboration with LECO. This will help the engineering students in the local universities to learn from the new technology, and experts at LECO to explore options of replicating microgrids in other parts of the distribution network in the future. Such capacity building support has been attached to almost all our assistance.

Interview by

Azquiya Usuph

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