• Energy today and trends
• What are the priorities?
• Meeting the energy needs of tomorrow
Source: World Bank Databank
Source: SEA, 2011 Energy Balance
Sri Lanka Oil Demand Forecast
Petroleum Import Cost (Millions US$)
6000
160
140
5000
120
4000
100
3000
80
60
2000
40
1000
20
0
0
1995
Source: CEYPETCO
2000
2005
2010
Cost mm$/year
2015
2020
Oil demand
2025
2030
Oil Demand 000' bpd
Source: SEA
• Peak MW demand expected
to more than double by 2025
• CEB expects energy demand
to increase at ~6.5% per
annum and they plan to meet
it principally by coal power
Source: SEA
Source: SEA
Computed from: Historical data and CEB (2011), Generation Expansion Plan 2011-2025
•
•
Oil based generation expected to decline to 7% of total generation by
2020 from 50% in 2011
Coal generation share to increase to over 50% by 2020 and to 70% by
2025
•
Volatile prices
–
–
•
•
•
•
Source: www.indexmundi.com. Coal cost forecast from UK, Department of Energy and Climate Change,
October 2012
Petroleum and
coal price
Dendro fuel
Resource
uncertainties for
hydro, wind,
solar
Currency
depreciation
National and
international
policies
International
crises
•
•
•
•
Key sectors
Risk and uncertainty
Technological
Policy
• Transport
• Electricity supply and demand
• Petroleum supply
• Why is the most efficient form of transport, least
used?
– Why not benefit from shifting more goods and passenger
transport to rail?
– Why is capacity utilization of such a valuable national asset low?
– Adopt open access policy to permit others to access to rail
lines?
• Increase efficiency in mobility and use of less fuel
intensive modes such as:
– Increase road transport fuel efficiency
– Reduce congestion
– Adopt “transport substitutes” (e.g., ICT sector and non-motorised
transport)
• Support next major lighting transition to LED
lighting
• Day-lighting for offices/factories
• Adopt and promote appliance efficiency
standards and labelling
• Support industrial/commercial efficiency
improvements
– Focus on 1500 industrial/commercial customers
accounting for 80% of their sector’s energy use
• Coal power
dominance could
pose price risks
• Important that
energy planners
undertake risk
assessments over
and above traditional
engineering
sensitivity analyses
Sources: PUCSL 2012/13 NCRE Tariff
Order. Coal fuel cost from UK/DECC
forecasts adjusted using PUCSL
Puttalam coal power plant cost
parameters, national inflation and LKR
depreciation
Invest in supply technologies with costs not correlated with oil/coal
power costs
• Pumped storage to use coal power more efficiently and to
increase value of intermittent renewable energy
• Renewable energy development needs
– Improved governance and reduced pre-investment delays
– Credit line to offer lower cost debt financing
– SEA support to access Government-owned unused marginal lands
for fuelwood growing
NCRE Type
Biomass Dendro
Biomass Agriwaste
Mini-hydro
Wind
Solar (Calculated)
Cost of Debt (LKR)
Capital Cost
Fuel Cost
Share of Tariff Share of Tariff
47%
47%
62%
31%
92%
0%
96%
0%
97%
0%
Proposed 2012/13
Tariff with Lending
Rate per PUCSL
25.09
17.89
16.15
21.64
24.96
Tariff if IBRD-type
Loans can be
Obtained
24.41
17.09
14.63
19.39
21.90
17.88%
13.50%
Percent Decline in
Tariffs with Lower
Interest Debt
3%
5%
10%
12%
14%
Part IV (12) of the SEA Act gives it
authority to promote/develop
renewable resources:
• Minister can declare an area with
renewable resources as an Energy
Development Area.
• SEA is then "responsible for
conserving and managing all
renewable energy resources
within a Development Area and
take all necessary measures to
promote and develop such energy
resources…”
• Use a portion of ~1.7 million
hectares of scrub and abandoned
agricultural lands to grow fuelwood
• 1000 MW of biomass power will
need about 250-350,000 hectares
of such lands
• But, despite declaring Gliricida as
a 4th plantation crop in 2005, little
has been done
SEA could access such lands
under the authority granted it
and make lands available for
fuelwood development
• Refinery upgrade
• Oil and gas exploration
IEA (2011) Technology Road Map: Smart Grids
• Sri Lanka is in advantageous position of higher
energy productivity today
• But faces high energy costs and could run risk
of energy supply disruptions or further price
shocks
• Focus could be on five areas:
1.
2.
3.
4.
5.
Transport sector interventions
Refinery upgrade and oil/gas exploration
Broader energy efficiency interventions
Increase diversity of electricity supply
Build the electric utility of the future - The Smart
Grid