ADB tells Sri Lanka to keep all options open for an energy-secure future

From left: ADB Senior Energy Specialist David Elzinga and ADB Energy Sector Chief Yongping Zhai

By Indika Sakalasooriya 
Sri Lanka should keep its options open when it comes to electricity generation to secure the country’s energy future and meet the increasing demand as its economy grows, according to energy sector experts at the Asian Development Bank (ADB).

Currently the state-run Ceylon Electricity Board (CEB) and energy sector regulator, the Sri Lanka Public Utilities Commission (PUCSL), are in a tug of war regarding the country’s future energy mix with the CEB engineers favouring coal-fired power plants and the PUCSL opting for LNG in the short term and renewables in the long term.

This deadlock situation has led to fears that Sri Lanka may experience blackouts in a couple of years’ time as the country has not commissioned a single power plant since 2014, despite the steady growth in demand.

“ADB will work together with the CEB and other authorities to meet Sri Lanka’s electricity demand and we believe that all options should be open. But coal is not the preferred option for ADB,” ADB Energy Sector Chief Dr. Yongping Zhai said, responding to a question raised by Mirror Business during a press briefing in Manila, the Philippines. 

Sri Lanka has set itself some lofty goals to become energy self-sufficient by 2030 and is among the 43 countries of the Climate Vulnerable Forum that agreed to make their electricity generation 100 percent renewable by 2050 at the earliest.

ADB last year announced US $ 200 million in funding for the CEB to set up a 100MW wind farm in Mannar, which is scheduled to be completed by 2021. Also, the Manila-based development financier has funded a number of hydropower projects in Sri Lanka.

Zhai said ADB will continue to support Sri Lanka in developing the country’s renewable energy space.
“The question is moving forward, when the economy grows, what would be the source of additional power supply. I think that would be a debate not only in Sri Lanka, but also in all over the world.”
While endeavouring to secure the country’s energy future, Zhai pointed out that Sri Lanka should also be mindful of its commitment under the Paris climate accord.

“Coal may be an option but Sri Lanka should look into whether any additional coal will derail its commitment under the Paris agreement. At ADB, we consider renewable energy should be considered first. Also, import of LNG may be another option,” 
Zhai said.

India’s Petronet and Japan’s Sojitz Corp. have expressed setting up a US $ 300 million floating LNG terminal in Kerawalapitiya. The Cabinet approval has been given to Sri Lanka Gas Terminal Company Limited to enter into a memorandum of underst anding with Indian and Japanese parties for a feasibility study.

Meanwhile, Zhai said ADB also encourages regional co-operation in attaining the country’s energy security, probably hinting that Sri Lanka should keep its options open to work together with India on energy co-operation.

“For all these things to happen you need a proper pricing system. You should send the right signals to investors. For example, those who are willing to put up a wind farm, they should get adequate tariff,” he said.