By Sarah Hannan
The Government has settled on a target of improving the renewable energy generation of Sri Lanka up to 70% of the energy mix during its tenure. With the national grid seemingly running out of the required energy generation and the breakdowns that were experienced in 2019 and at the beginning of 2020, much development is needed in the energy sector.
[caption id="attachment_106835" align="alignleft" width="300"]
State Minister of Solar, Wind, and Hydro Power Generation Projects Development Duminda Dissanayake, Photo Krishan Kariyawasam[/caption]
This week, State Minister of Solar, Wind, and Hydro Power Generation Projects Development Duminda Dissanayake took The Sunday Morning Hot Seat to discuss the present situation, the next steps for 2021, and how the Ministry plans to improve the renewable energy sector in the coming years.
Following are excerpts of the interview:
How do you view the 2021 Budget presented by the Government?
My perception of the 2021 Budget is that we have thought well about how the country’s economy can be stabilised and how it would strengthen the economy of the country. If we take the development of local industries as an example, almost all budgets that have been presented so far in the history of Sri Lankan politics have spoken about it during the budgetary promises. But these promises never materialised.
If you look at the 2021 Budget, it clearly defines how the local industries will be developed and what sort of measures the Government is going to take to strengthen the local industries.
Opposition politicians claim that the 2021 Budget lacks clarity and relief to resuscitate the Covid-19-hit economy. How do you respond?
Rather than saying that it lacks clarity on how we would resuscitate the country’s economy in a pandemic-ridden environment, they can suggest the steps that they see fit which the Government could adopt, in addition to the measures that are already in place that are proposed in the Budget.
The Opposition MPs should not limit themselves to merely observing the situation, they too will have to come to power one day and will have to govern the country. Rather than passing observatory comments, they can challenge the decisions that the Government has taken and suggest alternatives.
What about the lack of clarity on revenue generation methods?
I suppose we all have a lack of clarity on how the revenue is going to be generated. If I am to freely speak about the present economic environment of Sri Lanka, how we will continue to generate sufficient revenue to develop the country and to bear the expenditures that are forecast is actually questionable.
Just because it is our government that is in power, we cannot claim that we can easily manage the situation. The country’s debt portfolio was gradually generated by all the previous governments that have contributed towards its growth by taking foreign loans, the carried forward debts, the settlements, and the debts that were taken towards the development of the country, which has brought us to a difficult position financially.
But just because we are in such a position, that does not stop us from moving forward, which is why we have financial modules that are fitted to Sri Lanka.
There are experts in the fields of finance and economy, whom we should attentively listen to and if we lack clarity in a certain area, it is best that we seek their counsel and get it analysed by them.
The 2021 Budget has given somewhat of a priority status to the renewable energy sector. Do you think they are achievable targets or ambitious ones?
We are very grateful towards the Finance Ministry, the President, and the Prime Minister for including all the proposals we had for the renewable energy sector. President Gotabaya Rajapaksa has a lot of faith in implementing the renewable energy projects in Sri Lanka, and is very keen on doing so during his tenure as President, which is why he even created this State Ministry that will specifically focus on the development of this sector. We believe that the Government will provide us the necessary support in initiating many of these projects that are in the pipeline, along with the 2021 Budget.
Today, the world is converting to using 100% renewable energy. Sri Lanka too can achieve the 100% renewable energy generation mix, as it is blessed with renewable energy sources – long hours of daylight, sufficient wind, and even alternatives such as biomass. Although there were a number of discussions about harvesting these renewable energy sources, they did not translate into action, as it was not prioritised. But our President has now made this a priority.
We have a three-year plan in place where we will empower 100,000 low-income families, by fitting their roofs with solar panels to generate solar power.
The next project that is in the pipeline is the installation of 10,000 transformers, each with a capacity of 100 kV that would turn each village into a substation and would add 1,000 MW to the national grid.
Should an individual decide to fix a solar farm in their property and decide to contribute towards the energy mix of the country, they too will be encouraged to do so. So, when interested investors come forward to join in the solar project, then the 200 solar companies in Sri Lanka will have an opportunity to improve their sales along with it.
The State Ministry is looking at proposing to the Samurdhi Authority to give us 100,000 families out of the 1,700,000 Samurdhi beneficiaries, who will be given the opportunity to generate solar power worth of 5 KW and instead of receiving the Samurdhi benefit from the Government for free, they would have the opportunity to earn Rs. 2,500 by letting the Government use their roof to generate solar power.
Our targets are not only focused on improving the energy mix of the country, but also empowering the people of this country by turning them to small business holders in the energy sector.
Renewable energy was also focused on by the previous Government through projects like the Soorya Bala Sangramaya, but the perceived targets could not be met. Why do you think that was?
As a practice, I do look at the history of things. However, it is not in my nature to look at history and then pick on the faults and assign blame to anyone. What we should ideally do is look at the past and find out what caused the said projects to fail and fix those issues.
The Ceylon Electricity Board (CEB) can actually look into this. I must say that the CEB has been very co-operative towards the State Ministry, and they have agreed to work closely with the Ministry to launch the projects that are planned out for the next few years.
There are many renewable energy projects that have been stuck in the pipeline for years while there are new proposals as well. How will you address this issue?
We actually have several issues that need to be addressed; energy project tenders that were awarded in 2016 and 2017 are yet to add their full capacity to the national grid and mini projects that received tenders in the years to follow which too have failed to add the full capacity of energy that was required.
In addition to the 100,000 solar power generating homes and 10,000 transformers, we also have three other projects – the Siyambalanduwa Solar Park, the Pooneryn Solar and Wind Farm, and the Mannar Wind Farm. The initial leg work for these projects was done by the Government, from securing the real estate to obtaining the necessary permission and getting the environment impact assessment (EIA), after which we float tenders. Whoever is selected by the tender procedure can start work on the site right away from the day they win the tender.
Rather than staying for years to complete the project, now the investors have the ability to complete the project within six months to one year.
Therefore, we are now implementing a process where the necessary permission, financial aid, and property to initiate the project will be secured and processed through the Ministry.
Certain technical issues including some shortcomings in the Electricity Act, as well as objections raised by some CEB officials have been attributed as reasons for delays in renewable energy generation projects. How will you overcome these hurdles?
If you take the Electricity Act into consideration and in the case of the Sustainable Energy Authority, they can give permission to initiate smallholder energy projects. However, if we look at the Ceylon Electricity Board Act that was amended in 2013, they are only allowed to purchase electricity on a least cost. Therefore, there were certain disputes within the sector and we had to look at a solution for these issues.
Any act is not carved in stone and they can be amended to match the necessities of the country. Even President Gotabaya Rajapaksa has clearly stated that many of the archaic acts and ordinances of the country need to be amended to match the present needs of the country.
To answer your question, on adding renewable energy to a grid that has been designed to handle base power, we need to look at the technicalities that need to be in place. The transformers that are presently in use are not metred; it would have been better if these 20,000 transformers that are fitted across the country were metred, but that does not mean that we should not upgrade the infrastructure. I am told that the CEB has taken the necessary measures to metre these transformers.
If we take the substations that are in the country into consideration, we are now looking to improve the capacities of these substations and upgrade the national grid by updating the infrastructure that is in place. For this, we will need time and a budget and we are also presented with the challenge of getting the job done within a shorter time period with the best efficacy, by spending the least amount of money.
If we are to get a private investor, be it a local or a foreign entity, if they have the ability to supply a unit at say Rs. 10-12 and if the unit that we bill for a consumer is priced at Rs. 15, we will be able to turn a profit by purchasing energy from these small and medium energy generators.
This is a sector that can leapfrog in terms of return on investment and savings that the country could make in terms of expenditure.
Through the years, we have heard of mafias in the power sector that have blocked cheaper and sustainable energy generation projects. How will you address this issue to ensure that your targets are met?
Energy mafia has become a hot topic in recent years, if there is a mafia at work, then why should there be a State Minister who is overlooking the matters? I was not appointed to talk about the mafia. I don’t look at the issues that are present in the sector as the work of a mafia. However, even if there is a so-called mafia, I am ready to meet them head on and continue with the work that I am assigned to do.
The Government is focused on foreign investments rather than loans to fund projects. How will investments take place in renewable energy generation projects, given that all projects have to be subjected to a competitive bidding process?
The three energy parks that we have in place in Siyambalanduwa, Pooneryn, and Mannar are good examples, where we have taken all the necessary measures to ensure that the ground work is in place so investors can be called.
We are looking at reducing the time that is needed to wait for the necessary clearance and permissions that need to be obtained. Some projects have spent about 10-15 years just to get these basics in place. We also have the blessings from the President and the Prime Minister to fast-track these projects, and even the approval process is getting streamlined so that once a request is made, the relevant institutions are asked to respond to them within a period of two weeks.
As mentioned in the 2021 Budget, we are also looking at starting the offshore wind project as well. That would allow us to install floating solar parks that will eliminate the requirement of having to look for land or acquiring farmlands. These floating solar parks will be placed on reservoirs that are connected to mega hydropower projects that already have an established grid network.
The grid connectivity will serve a dual purpose; whereas during the day, we can utilise the energy that is generated through the floating solar farm, and in the night, we can use the hydropower.
Apart from government-to-government (G2G) projects, how will foreign direct investments be accommodated in the renewable energy sector?
Foreign direct investments will be done through the Board of Investment (BOI) of Sri Lanka. If it is an investment that is coming through a government, then the Foreign Ministry gets involved. The process has been streamlined, providing us sufficient clarity as to how we would be negotiating the terms of investments. Otherwise, the responsibility of looking for funders too is assigned to the subject ministry.
Interested private investors are to contact the BOI and if they meet the necessary criteria set out by the BOI, they can approach the Ministry. If it is a G2G project, the investment can be co-ordinated through the Foreign Ministry, and we are willing to work together with the investor and the relevant institution or ministry to facilitate the funding.
They are to follow the government tender procedure and the Government will decide which projects need to be prioritised and what terms will be in place when these investments are accepted.
What are your targets for the renewable energy sector for next year, given the issues that need to be addressed to achieve the 70% power generation target through renewable energy?
As mentioned in President Gotabaya Rajapaksa’s “Vistas of Prosperity and Splendour” manifesto, the target was set for 80% renewable energy. After the Government was established following the parliamentary elections, we discussed with the President and brought the target down by 10%. The energy sector in Sri Lanka cannot change on a daily basis and we need to have an energy generation plan. We are still functioning according to an old energy generation plan that was designed ages ago.
Although the presidential manifesto agreed to have 70% renewable energy generation, we are yet to announce the energy generation plan that will allow us to improve the grid facilities to reach that target. With the 2021 Budget speech and the mention of improving the renewable energy capacity to 70%, we have conducted extensive discussions on improving the energy sector, and we are now able to announce the energy generation plan for the next years through a gazette notification which would issue directives indicating that by a certain time period, we will be able to achieve the 70% target for renewable energy generation.
The CEB will have to then look at a new energy generation plan going forward once the gazette is issued.
A common problem that we face, when it comes to infrastructure development, is that there is not enough focus towards research and development (R&D) and there is a lack in allocating resources or funding for it. How will you address this, given that the renewable energy sector is constantly evolving with the latest technology that is made available?
If we take the Sustainable Energy Authority, we are restructuring it in a manner that it becomes a one-stop shop for all energy solutions and related matters. Previously, it functioned as another institution that was signing off on the documents to provide approval for activities.
This will begin with the commencement of work at the renewable energy parks; that way, the Sustainable Energy Authority will actually be putting their knowledge into practice and getting involved in field work.
Moreover, we are looking to allocate space in our Hambantota Park to establish the R&D unit for renewable energy. While we are developing that division, we will require the support of the assistance of higher education and tertiary education institutions to design the necessary courses.
State Minister of Solar, Wind, and Hydro Power Generation Projects Development Duminda Dissanayake, Photo Krishan Kariyawasam[/caption]
This week, State Minister of Solar, Wind, and Hydro Power Generation Projects Development Duminda Dissanayake took The Sunday Morning Hot Seat to discuss the present situation, the next steps for 2021, and how the Ministry plans to improve the renewable energy sector in the coming years.
Following are excerpts of the interview:
How do you view the 2021 Budget presented by the Government?
My perception of the 2021 Budget is that we have thought well about how the country’s economy can be stabilised and how it would strengthen the economy of the country. If we take the development of local industries as an example, almost all budgets that have been presented so far in the history of Sri Lankan politics have spoken about it during the budgetary promises. But these promises never materialised.
If you look at the 2021 Budget, it clearly defines how the local industries will be developed and what sort of measures the Government is going to take to strengthen the local industries.
Opposition politicians claim that the 2021 Budget lacks clarity and relief to resuscitate the Covid-19-hit economy. How do you respond?
Rather than saying that it lacks clarity on how we would resuscitate the country’s economy in a pandemic-ridden environment, they can suggest the steps that they see fit which the Government could adopt, in addition to the measures that are already in place that are proposed in the Budget.
The Opposition MPs should not limit themselves to merely observing the situation, they too will have to come to power one day and will have to govern the country. Rather than passing observatory comments, they can challenge the decisions that the Government has taken and suggest alternatives.
What about the lack of clarity on revenue generation methods?
I suppose we all have a lack of clarity on how the revenue is going to be generated. If I am to freely speak about the present economic environment of Sri Lanka, how we will continue to generate sufficient revenue to develop the country and to bear the expenditures that are forecast is actually questionable.
Just because it is our government that is in power, we cannot claim that we can easily manage the situation. The country’s debt portfolio was gradually generated by all the previous governments that have contributed towards its growth by taking foreign loans, the carried forward debts, the settlements, and the debts that were taken towards the development of the country, which has brought us to a difficult position financially.
But just because we are in such a position, that does not stop us from moving forward, which is why we have financial modules that are fitted to Sri Lanka.
There are experts in the fields of finance and economy, whom we should attentively listen to and if we lack clarity in a certain area, it is best that we seek their counsel and get it analysed by them.
The 2021 Budget has given somewhat of a priority status to the renewable energy sector. Do you think they are achievable targets or ambitious ones?
We are very grateful towards the Finance Ministry, the President, and the Prime Minister for including all the proposals we had for the renewable energy sector. President Gotabaya Rajapaksa has a lot of faith in implementing the renewable energy projects in Sri Lanka, and is very keen on doing so during his tenure as President, which is why he even created this State Ministry that will specifically focus on the development of this sector. We believe that the Government will provide us the necessary support in initiating many of these projects that are in the pipeline, along with the 2021 Budget.
Today, the world is converting to using 100% renewable energy. Sri Lanka too can achieve the 100% renewable energy generation mix, as it is blessed with renewable energy sources – long hours of daylight, sufficient wind, and even alternatives such as biomass. Although there were a number of discussions about harvesting these renewable energy sources, they did not translate into action, as it was not prioritised. But our President has now made this a priority.
We have a three-year plan in place where we will empower 100,000 low-income families, by fitting their roofs with solar panels to generate solar power.
The next project that is in the pipeline is the installation of 10,000 transformers, each with a capacity of 100 kV that would turn each village into a substation and would add 1,000 MW to the national grid.
Should an individual decide to fix a solar farm in their property and decide to contribute towards the energy mix of the country, they too will be encouraged to do so. So, when interested investors come forward to join in the solar project, then the 200 solar companies in Sri Lanka will have an opportunity to improve their sales along with it.
The State Ministry is looking at proposing to the Samurdhi Authority to give us 100,000 families out of the 1,700,000 Samurdhi beneficiaries, who will be given the opportunity to generate solar power worth of 5 KW and instead of receiving the Samurdhi benefit from the Government for free, they would have the opportunity to earn Rs. 2,500 by letting the Government use their roof to generate solar power.
Our targets are not only focused on improving the energy mix of the country, but also empowering the people of this country by turning them to small business holders in the energy sector.
Renewable energy was also focused on by the previous Government through projects like the Soorya Bala Sangramaya, but the perceived targets could not be met. Why do you think that was?
As a practice, I do look at the history of things. However, it is not in my nature to look at history and then pick on the faults and assign blame to anyone. What we should ideally do is look at the past and find out what caused the said projects to fail and fix those issues.
The Ceylon Electricity Board (CEB) can actually look into this. I must say that the CEB has been very co-operative towards the State Ministry, and they have agreed to work closely with the Ministry to launch the projects that are planned out for the next few years.
There are many renewable energy projects that have been stuck in the pipeline for years while there are new proposals as well. How will you address this issue?
We actually have several issues that need to be addressed; energy project tenders that were awarded in 2016 and 2017 are yet to add their full capacity to the national grid and mini projects that received tenders in the years to follow which too have failed to add the full capacity of energy that was required.
In addition to the 100,000 solar power generating homes and 10,000 transformers, we also have three other projects – the Siyambalanduwa Solar Park, the Pooneryn Solar and Wind Farm, and the Mannar Wind Farm. The initial leg work for these projects was done by the Government, from securing the real estate to obtaining the necessary permission and getting the environment impact assessment (EIA), after which we float tenders. Whoever is selected by the tender procedure can start work on the site right away from the day they win the tender.
Rather than staying for years to complete the project, now the investors have the ability to complete the project within six months to one year.
Therefore, we are now implementing a process where the necessary permission, financial aid, and property to initiate the project will be secured and processed through the Ministry.
Certain technical issues including some shortcomings in the Electricity Act, as well as objections raised by some CEB officials have been attributed as reasons for delays in renewable energy generation projects. How will you overcome these hurdles?
If you take the Electricity Act into consideration and in the case of the Sustainable Energy Authority, they can give permission to initiate smallholder energy projects. However, if we look at the Ceylon Electricity Board Act that was amended in 2013, they are only allowed to purchase electricity on a least cost. Therefore, there were certain disputes within the sector and we had to look at a solution for these issues.
Any act is not carved in stone and they can be amended to match the necessities of the country. Even President Gotabaya Rajapaksa has clearly stated that many of the archaic acts and ordinances of the country need to be amended to match the present needs of the country.
To answer your question, on adding renewable energy to a grid that has been designed to handle base power, we need to look at the technicalities that need to be in place. The transformers that are presently in use are not metred; it would have been better if these 20,000 transformers that are fitted across the country were metred, but that does not mean that we should not upgrade the infrastructure. I am told that the CEB has taken the necessary measures to metre these transformers.
If we take the substations that are in the country into consideration, we are now looking to improve the capacities of these substations and upgrade the national grid by updating the infrastructure that is in place. For this, we will need time and a budget and we are also presented with the challenge of getting the job done within a shorter time period with the best efficacy, by spending the least amount of money.
If we are to get a private investor, be it a local or a foreign entity, if they have the ability to supply a unit at say Rs. 10-12 and if the unit that we bill for a consumer is priced at Rs. 15, we will be able to turn a profit by purchasing energy from these small and medium energy generators.
This is a sector that can leapfrog in terms of return on investment and savings that the country could make in terms of expenditure.
Through the years, we have heard of mafias in the power sector that have blocked cheaper and sustainable energy generation projects. How will you address this issue to ensure that your targets are met?
Energy mafia has become a hot topic in recent years, if there is a mafia at work, then why should there be a State Minister who is overlooking the matters? I was not appointed to talk about the mafia. I don’t look at the issues that are present in the sector as the work of a mafia. However, even if there is a so-called mafia, I am ready to meet them head on and continue with the work that I am assigned to do.
The Government is focused on foreign investments rather than loans to fund projects. How will investments take place in renewable energy generation projects, given that all projects have to be subjected to a competitive bidding process?
The three energy parks that we have in place in Siyambalanduwa, Pooneryn, and Mannar are good examples, where we have taken all the necessary measures to ensure that the ground work is in place so investors can be called.
We are looking at reducing the time that is needed to wait for the necessary clearance and permissions that need to be obtained. Some projects have spent about 10-15 years just to get these basics in place. We also have the blessings from the President and the Prime Minister to fast-track these projects, and even the approval process is getting streamlined so that once a request is made, the relevant institutions are asked to respond to them within a period of two weeks.
As mentioned in the 2021 Budget, we are also looking at starting the offshore wind project as well. That would allow us to install floating solar parks that will eliminate the requirement of having to look for land or acquiring farmlands. These floating solar parks will be placed on reservoirs that are connected to mega hydropower projects that already have an established grid network.
The grid connectivity will serve a dual purpose; whereas during the day, we can utilise the energy that is generated through the floating solar farm, and in the night, we can use the hydropower.
Apart from government-to-government (G2G) projects, how will foreign direct investments be accommodated in the renewable energy sector?
Foreign direct investments will be done through the Board of Investment (BOI) of Sri Lanka. If it is an investment that is coming through a government, then the Foreign Ministry gets involved. The process has been streamlined, providing us sufficient clarity as to how we would be negotiating the terms of investments. Otherwise, the responsibility of looking for funders too is assigned to the subject ministry.
Interested private investors are to contact the BOI and if they meet the necessary criteria set out by the BOI, they can approach the Ministry. If it is a G2G project, the investment can be co-ordinated through the Foreign Ministry, and we are willing to work together with the investor and the relevant institution or ministry to facilitate the funding.
They are to follow the government tender procedure and the Government will decide which projects need to be prioritised and what terms will be in place when these investments are accepted.
What are your targets for the renewable energy sector for next year, given the issues that need to be addressed to achieve the 70% power generation target through renewable energy?
As mentioned in President Gotabaya Rajapaksa’s “Vistas of Prosperity and Splendour” manifesto, the target was set for 80% renewable energy. After the Government was established following the parliamentary elections, we discussed with the President and brought the target down by 10%. The energy sector in Sri Lanka cannot change on a daily basis and we need to have an energy generation plan. We are still functioning according to an old energy generation plan that was designed ages ago.
Although the presidential manifesto agreed to have 70% renewable energy generation, we are yet to announce the energy generation plan that will allow us to improve the grid facilities to reach that target. With the 2021 Budget speech and the mention of improving the renewable energy capacity to 70%, we have conducted extensive discussions on improving the energy sector, and we are now able to announce the energy generation plan for the next years through a gazette notification which would issue directives indicating that by a certain time period, we will be able to achieve the 70% target for renewable energy generation.
The CEB will have to then look at a new energy generation plan going forward once the gazette is issued.
A common problem that we face, when it comes to infrastructure development, is that there is not enough focus towards research and development (R&D) and there is a lack in allocating resources or funding for it. How will you address this, given that the renewable energy sector is constantly evolving with the latest technology that is made available?
If we take the Sustainable Energy Authority, we are restructuring it in a manner that it becomes a one-stop shop for all energy solutions and related matters. Previously, it functioned as another institution that was signing off on the documents to provide approval for activities.
This will begin with the commencement of work at the renewable energy parks; that way, the Sustainable Energy Authority will actually be putting their knowledge into practice and getting involved in field work.
Moreover, we are looking to allocate space in our Hambantota Park to establish the R&D unit for renewable energy. While we are developing that division, we will require the support of the assistance of higher education and tertiary education institutions to design the necessary courses.