Battle for Energy begins in Sri Lanka

sampur-coal-plantThe demand for energy is of paramount importance for the economic growth of a developing nation like Sri Lanka; as such should come up with a national energy policy that is holistic in approach that is sustainable and formulated with energy mix keeping in mind the various growth sectors as industries and services. As per the Central Bank Annual Report for 2015, the total electricity generation in 2015 was 13,090 GWh. The power generated by the CEB is 79 per cent in 2015, while the remainder was purchased from Independent Power Producers (IPPs). The new ‘yahapalanaya’ government following protest from the locals at Sampur has decided against coal plants, requesting CEB to go for alternate renewable energy sources and the decision was welcomed by the environmentalists as a positive move in the right direction.  Sri Lanka is in a prime spot for solar power, as an island nation has wind power and ocean wave energy in addition to oil & gas available offshore. Some of these resources available in the island nation round the year are being utilized to generate electricity.

For many years in the past, Sri Lanka was living in isolation from rest of the world without facing up to reality on energy related matters; began with small thermal powered power stations and progressed to utilizing hydro power, a renewable energy source found in abundance in the little island nation. As the energy demand increased in the 1970’s, hydro power reached optimum levels and Sri Lanka thereafter began installing more thermal plants. Sri Lanka is a net oil importer at present, spending around US$ 6 billion per year to import crude and refined oil. Part of these funds could be saved if Sri Lanka can produce oil and gas, there is a long way to go before this happens and in the meantime, should explore the possibility of reducing its fuel import bill by reducing the overall fuel consumption, one of the largest users of oil is the Ceylon Electricity Board (CEB), which in 1985 used little oil for generating electricity, and by 2009 had increased to 60-65%. Out of the above installed capacity, hydro power and wind which are considered as renewable sources, account for 1288 MW. The hydro power generation is mainly dependent on the water in reservoirs basically under the multi-purpose Mahaweli project. During periods of prolonged drought the generation of power is severely curtailed compelling the authorities to increase the thermal power generating capacity utilizing gas or oil and lately coal. The future fossil fuel price will most likely increase, which means that the price of oil and coal will increase making it prohibitively expensive. On the other hand the Government is heavily subsidizing fossil fuel for power generation at present and therefore the true cost of a unit is much higher than the average tariff. It is clear that the Government cannot continue with these subsidies forever and therefore it is necessary to encourage the consumers to tap into the renewable energy available in the surroundings. At a time many developed nations were phasing out their coal power plants, due to its negative impact on environment; as a way forward in the past two decades to meet the increasing demand for electricity, CEB selected to install 3300 MW of coal plants by the year 2020. Most of them at Sampur, east of the country in addition to already installed 900 MW Lakvijya Coal Power plant in Norochcholai, Puttalam that was commissioned in 2011. By using coal a non-renewable energy source coal dusts will be dispersed being hazardous to the people and plants living around the plants, besides emissions of large quantities of CO2 to the atmosphere contributing to global warming.

Unfortunately, planning of past rulers were more on ethnic and religious grounds than economic based which only helped to divide the country than developing the nation that led the country eventually to a civil war. To give an idea of how things went, after the war, during Governor’s rule in the Northern Province a detailed bottom-up proposal was presented at a seminar held at Pradeshiya Sabha, Chulipuram in August 2010 and later in September 2010 to Divisional Secretariat, Chankanai with the concept of managing waste land as an entry point for development of Vali-West Division. Key aspects of this complete proposal included Artificial recharging of ground water, Increase storage capacity of ‘kulam’s (surface water storage tanks), Reforestation, Waste management, Water Desalination and Power Generation.

One initiative was to install series of wind powered generators along west cost of Vali-West and to feed the generated power into the national grid, based on the Report on Wind Power – A Sustainable Response to the Energy Crisis in Sri Lanka by a new agency called the Sustainable Energy Authority (SEA) – 2009 as per which the terrain orientation to prevailing wind is good with exposure to southeast and northeast monsoon winds. Wind resource potential in limited areas identified as large enough for at least a 20-MW project. The Vali-West Pradeshiya Sabha was to invite private organizations to install and operate these plants for power generation. The idea could then be extended in every District that has the potential to develop wind power and from other renewable energy sources such as solar power and bio-fuel to benefit the whole country. Wind resource evaluation results indicates that the islands and coastal locations in the peninsula as excellent. The proposal was respectfully turned down by the Governor, who was busy implementing the State preferred plan of changing the demography of the region and the concerned administrators did not raise their eye lids as that is the way cookies crumbled in the north during the Governor’s rule. It was therefore disheartening to note that the national planners did not given serious thought to the renewable energy potential available in the country, namely wind and solar energy, perhaps because they were pre-occupied with the bloody civil war.

As per the Central Bank Annual Report for 2015, the total electricity generation in 2015 was 13,090 GWh, Hydropower generation (excluding mini-hydro generation) during the year 4,904 GWh and reflecting the enhanced capacity of the Norochcholai coal power generation increased substantially to 4,443 GWh during the year. Meanwhile, the generation of electricity through nonconventional renewable energy (NCRE) sources, including mini-hydro generation, increased to 1,466 GWh. Accordingly, of total generation, the share of hydro, fuel oil, coal and NCRE power generation was 37 per cent, 17 per cent, 34 per cent and 11 per cent, respectively. The share of power generated by the CEB increased to 79 per cent in 2015, while the remainder was purchased from Independent Power Producers (IPPs). Meanwhile, coal power generation at Norochcholai continued to face issues in relation to storage capacity limitations during the periods with rough sea conditions and frequent interruptions. The new ‘yahapalanaya’ government following protest from the locals at Sampur has however decided against coal plants, requesting CEB to go for alternate renewable energy sources and the decision was welcomed by the environmentalists as a positive move in the right direction.

Oil and gas exploration in Sri Lanka began with the collection of seismic data in the late 1960s both onshore and offshore and there was evidence that the seabed in the Mannar region had potential petroleum deposits. Further exploration work had shown that two prospective offshore sedimentary basins namely the Cauvery and Mannar basins are situated in Sri Lanka. Recent studies have also identified the existence of hydrocarbon potential parallel to the continental shelf margin of the country, spreading out from the south to the east and north. However, the water depth at this margin is over 4km and was therefore at the limit of then exploration capabilities and was considered not worthwhile by timid leadership of the country, crude oil and derivatives were made easily available by Shell and other large oil companies operating in the country. But then India took a different decision and has been drilling since 1959; today Cauvery basin is a key oil province for India with many oil and gas strikes in the offshore portion of the basin. The basin covers much of Tamil Nadu state and extends from Pondicherry along the Coromandal coast south to Cape Coromin and into Palk Bay and the Gulf of Mannar. The basin in all covers 25,000 sq km onshore and 23,000 sq km offshore. The discovery off Tamil Nadu coast holds special promise for the Cauvery basin offshore and currently, there are rigs operating in the onshore portion of the basin and rigs are working offshore. Oil found has complemented increasing industrialization of the region including refineries fed by Cauvery crude and sodium silicate plants fed by Cauvery gas and more are planned.

On Sri Lanka side the Cauvery basin is located at approximately 90-110 North latitude and 790-810 East longitude, lying between north to north west Sri Lanka and south east India, and includes adjacent on land Cenozoic sedimentary cover. In terms of size, the Sri Lanka side of the northern Cauvery basin approaches in an area of approximately 20,000 square kilometers, with a sediment accumulation at the deeper parts of the sub basins exceeding 4.5kms, thus provide an adequate sedimentary thickness for basin prospectively. The Mannar basin is located at approximately 60-90 North latitude by 780-800 East longitude, and lies from south west to north west Sri Lanka, south east of India and south of the Cauvery basin. In terms of size, the Sri Lanka side of the Mannar basin approaches in an area of approximately 42,000 square kilometers with a sediment accumulation of possibly up to10kms in the deeper water areas of the basin.

The first oil shock caused with the Oil Crisis of 1973, when members of the Organization of Arab Petroleum Exporting Countries (OPEC) proclaimed an oil embargo and the price of crude shot up overnight from US$3 per barrel to nearly $12 globally. It was then the Sri Lankan leadership woke-up to evaluate the crude potentials in the country; in 1974 drilling in the Mannar Basin encountered small amount of dissolved gas with heavy ends to pentane trapped in significant reservoir rocks. It resulted in 1975 recording of marine seismic data along with some onshore data to evaluate the Palk Bay area in the Cauvery Basin. By this time the country had warning signs of things to come with the southern youth uprisings and was followed by the three decades of civil war by the northern uprising that engulfed east and eventually affected the whole country and put the development back by five decades. Only with the end of the civil war in 2009, the country was able to turn to development again and first hydrocarbon discovery in the Mannar basin was made in 2011 and normalcy did not return to the country due to misrule and the Mannar basin remained unexplored. Following a change in government in 2015, the National Gas Policy and Petroleum Resources Development Act was formulated to take the natural gas industry forward to attract investments into nation’s oil and gas exploration activities. Sri Lanka’s petroleum exploration efforts were renewed during the year, with the government’s decisions to further explore and develop the natural gas discovered in the Mannar Basin and expedite exploration in other areas. With India exploring in the same zone since 1960s the resources may have depleted by now and even if Sri Lanka is able to find and extract viable deposits of oil and gas, they are finite resources that may last at most for a century or two.  In any case, it will take years, but has the potential to change the entire economy of the country.

As Sri Lanka is blessed with vast wind energy resources due to its location in the Indian Ocean and realizing the importance of developing sustainable sources of energy, the Government of Sri Lanka has set up the Sustainable Energy Authority (SEA), but due to negative peace years that prevailed following the end of civil war in 2009, has only one small wind power plant connected to its national grid. The initial investment for these alternative sources of power may be higher than for conventional systems, but once the investment cost is recovered, the running cost is low. The Government has initiated a new community based power generation project to promote the setting up of small solar power plants on the rooftops of households, religious places, commercial establishments and industries. It is expected to add 200MW of solar electricity to the national grid by 2020 and 1000MW by 2025 through this intervention. Householders will have the options to generate and use electricity in their premises and feed the excess to the national grid or bank it for later use.

(Refer also to previous postings relevant to the subject on Northern Breeze such as ‘China Bay Tank Farm to be renovated’, posted on 21 August 2016. ‘Doing wrong for right reason and doing right for wrong reason’ on proposed LNG processing plant, posted on 15 May 2016 and ‘Concerned Environmentalists’ on phasing out coal plants posted on 7 March 2016).