Assisting solar power debate in Sri Lankan Cabinet

Sri Lanka has a real opportunity to rebrand itself as a renewable energy island

The purpose of this article is to inform the Cabinet discussion on solar power proposed by the Ceylon Electricity Board (CEB) 

By I.M. Dharmadasa, Nilmini Roelens Solicitor, and Saroj Pathirana

Net metering and the prosumer

The CEB has put forward a motion to the Sri Lankan Cabinet which proposes to reduce the unit price payable under the various net metering schemes to the “prosumer” (the owner of a solar panel system). 

A prosumer is a blend of producer and consumer, referring to individuals who both create and consume. This is based on the notion that most producers of electricity through self-owned solar panels generate more than double their own needs as consumers. It thus enables the prosumer to connect to the national grid and receive money on a pay back scheme from the CEB for the excess electricity they produce.

What is this debate about?

Currently there are four schemes. 

The Public Utilities Commission of Sri Lanka explains the various schemes involving roof-top solar solutions thus under a heading published in October 2023 – Rooftop Solar PV Connection Schemes. The two most noteworthy schemes are the Net plus and the Net plus plus schemes.

https://www.pucsl.gov.lk/rooftop-solar-pv-connection-schemes/.

Through the Net Plus Plus Scheme CEB regards the prosumer as a mini power plant holder which maximises roof top generation well beyond the prosumer’s own needs making maximum use of extra roof space. This would work well for schools and companies with large buildings. CEB used to pay Rs. 37 per unit to the prosumer for up to 500kW. This unit price was available between 26 October 2022 and 1 July 2024. However, as of 1 July 2024 the unit price was reduced to Rs. 27.

We understand the new CEB proposal to the Cabinet is to scrap this scheme altogether. 

In relation to the Net Plus scheme which is the more accessible and popular scheme for ordinary householders the current CEB proposal is to reduce the unit price even further to Rs. 19 for solar power systems generating less than 20 kW, whilst for those generating between 20 – 100 kW the unit pay back will be Rs. 17 and those generating between 100 – 500 kW will receive Rs. 15 per unit. 

The installation costs of a 5-kW solar panel is now around Rs. 1.0 million. The cost of solar panels has in fact come down over the years and the units are recyclable. The lifespan of a solar unit is expected to be in the region of 22 to 25 years. There are now over 300 active solar companies in Sri Lanka. This is a rapidly growing sector with the prospect of generating employment for tens of thousands of young Sri Lankans for many years to come as technicians, administrators and entrepreneurs. The potential advantages for the economy are extensive Sri Lanka’s growth of the renewable energy sector using freely available sunshine available virtually all year-round given the geographical proximity to the equator.

It is not just about reducing the electricity bills of the prosumer. This green energy solution would also mean we avoid the heavy annual cost of the import of fossil fuels into Sri Lanka which very seriously affects its balance of payments each year. 

The unwarranted need for environmentally damaging energy sources like coal, diesel and nuclear (with its inherent dangers and enormous costs), etc. will lead to a meaningless downward spiral of more debt, enhanced climate risk and pollution.

The intermittency argument

The argument of intermittency of renewables is a misguided premise. Some may argue that seasonal variations of renewables such as solar or hydro power may make them unreliable. This can very easily be remedied by investment in a smart grid. This can be done by upgrading the existing transformers and grid lines. A policy decision would be required at Cabinet level to advise the CEB to reinvest any profits for this purpose.

The reduction will discourage the use of clean renewable energy in favour of higher imports and a move towards dangerous and expensive sources of energy. The consequences of a reduction of unit price will thus be far reaching beyond the loss to the prosumer. Lithium battery storage options mean that even when the sun stops shining at night or in the wet season the solar panel produced energy can continue to be used 

Green Hydrogen is the future

Solar generated power can be harnessed to invest in Green Hydrogen solutions which could mean that rather being an importer of fossil fuels, that the rest of the world is turning away from, Sri Lanka becomes an exporter of green hydrogen to countries in the northern hemisphere where sunshine is scarcer. 

Picture what it could do to the Sri Lankan economy if, rather than being dependent on imports of polluting and expensive fuel which can exacerbate the climate crisis, we transform our island into an eco-tourist paradise and become an exporter of clean green hydrogen. 

Green hydrogen is created by splitting water molecules into its components of Hydrogen and Oxygen. The hydrogen gas can be compressed and stored for export. The minimum voltage required for splitting the water molecule is about 1.50 Volts DC and scaling up and commercialisation is happening throughout the world currently. 

Rebranding Sri Lanka as a renewable energy island

To limit imports of fossil fuels for automobiles, a policy decision at governmental level could provide concessions for electric cars for solar roof owners and encourage the use of solar powered charging stations. The annual cost of imports of petrol and diesel would reduce overtime as Sri Lanka encourages clean and green electric cars.

Whilst the rest of the world is turning to renewable energy with alacrity, Sri Lanka ought not turn to fossil fuel imports in breach of its commitments to the international community.

In 2015 Sri Lanka signed up to the United Nations 2030 Agenda. Ahead of the Paris Summit Sri Lanka set out its climate action plan which UN Framework Convention on Climate Change (UNFCCC) stated: “Countries have agreed that there will be no back-tracking in these national climate plans, meaning that the level of ambition to reduce emissions will increase over time.”

(https://unfccc.int/news/sri-lanka-submits-its-climate-action-plan-ahead-of-2015-paris-agreement) 

Sri Lanka has a real opportunity to rebrand itself as a renewable energy island. This means moving towards the commitments made at UNFCC – COP25, Sri Lanka Country Statement in Madrid in December 2019:

“Sri Lanka recognises the importance of the role of COP and highlights the need to take effective and definitive steps for finalising the follow up actions of the Paris Agreement. 

The rise of the global mean temperature and the resulting changes have created adverse impacts on key sectors of Sri Lanka, such as agriculture, forestry, biodiversity, marine and fisheries, tourism and energy (hydro power) sectors, leading to disastrous effects on its people, ecosystems and economy. According to official statistics from 2008 to 2018, droughts, floods and landslides have affected over 15 million people, and losses and damages resulting from these calamities have been borne by Sri Lanka’s national budget…

Sri Lanka is committed to inclusive and participatory climate actions to ensure that affirmative actions are taken to address the vulnerabilities of climate change.”

https://unfccc.int/sites/default/files/resource/SRILANKA_cop25cmp15cma2_HLS_EN.pdf

Why is reduction of the unit price a very regressive, harmful measure?

The reduction will discourage the use of clean renewable energy in favour of higher imports and a move towards dangerous and expensive sources of energy.

The consequences of a reduction of unit price will thus be far reaching beyond the loss to the prosumer.

Lithium battery storage options mean that even when the sun stops shining at night or in the wet season the solar panel produced energy can continue to be used. 

It is very likely that current solar companies will need to diversify to survive and move towards lithium battery storage solutions and inverters so that year long, 24-hour access to energy is available without recourse to the national grid for their customers. As individuals and institutions go off grid CEB’s income will dwindle in the long run as the private sector takes over. 

Recommendations to the Cabinet

We make the following recommendations to the Government of Sri Lanka:

I. At present we have a fragile grid, and the CEB should strenuously endeavour to minimise energy leakages and improve the grid by replacing weak transformers and grid lines. Such continuous improvements will enable us to move towards a “Smart Grid” enabling absorption of large amounts of intermittent renewable energies like wind and solar. 

II. At present we have ~1500 MW of renewables installed, comparable to hydroelectricity. When solar power is plentiful during the daytime, hydro power can be reduced simply by controlling the water flow without any technical difficulties. This is one way of assuring energy storage while balancing the grid energy. 

III. Another solution for this is pumped water storage plants. It is important to follow through with such measures which have now been under discussion for some time.

IV. The future energy carrier is green hydrogen (GH) produced by electrolysing water using both wind and solar. A global Green Hydrogen revolution is taking place, and GH can be used to run vehicles using fuel cell technology. Trains and buses are being run with GH technology in Europe. GH can also be converted into ammonia and methanol to produce fertiliser and be applied for other industrial uses. Sri Lanka must not be left behind.

V. GH can be stored and burned whenever energy is needed, especially during nighttime. Only water vapour is produced during the burning of hydrogen without any air pollution. Sri Lanka already has the Sobhadanavi LNG plant which is almost ready to use. Since we must import LNG to run this power plant, we should be able to reduce the LNG import bill by half by mixing the natural gas (methane) with the locally produced GH. See here:

https://www.youtube.com/watch?v=YcywQnR99-Q&ab_channel=reneenergy.com

VI. Local solar energy companies should install high quality solar energy systems and provide “after sale services” in accordance with their guarantees. 

VII. PV companies should also be encouraged to collaborate with local electronics departments to manufacture accessories like inverters and other components needed for these systems, creating new jobs, and reducing the total cost of the systems. 

VIII. In addition to grid tied solar roofs, the PV companies should also market hot water systems and water pumping systems. As a country reliant mainly on agriculture, solar water pumping and drip irrigation systems, especially in the dry zone, provide a huge potential for increasing food production. 

IX. Battery capacities are improving, and costs are coming down. This can be encouraged pending replacing grid infrastructure.

X. It is important to increase public awareness through government-funded campaigns. The public should recognise the dangers of using imported and expensive fossil fuel and the importance of using renewables. 

XI. The public should also recognise the advantages of having a clean environment, health benefits and enhanced living conditions. 

XII. A community development project called “Solar Village” to empower needy communities, accelerate their sustainable development, reduce poverty and take climate action has been developed over the past two decades. Seven solar villages have been established and funding for three more solar villages have been obtained. 

(I.M. Dharmadasa is an Emeritus Professor, Nilmini Roelens a Solicitor, and Saroj Pathirana a Journalist. The authors are Directors of Solar Village SDG CIC www.solarvilllagesdg.org. Solar Village SDG, a UK-based community interest company has been established to encourage the use of renewables and to pilot programs which will support sustainable development goals. This includes providing access to a quality education for all via smart rooms which will be set up alongside solar villages in rural schools. Such initiatives could be encouraged and supported.)