Key inputs at public consultation on non-conventional renewable energy – feed in tariffs

PUC Commission to make Final Decision on Tariffs on the 14th Of September

By Devin Jayasundera

The Public Utilities Commission (PUC) had its annual Public Consultation regarding the Non-Conventional Renewable Energy Tariffs for 2012/2013 amidst the presence of its major stakeholders yesterday.  

According to PUC Director General Damitha Kumarasinghe this progressive step was taken with the objective of ensuring a fair and transparent decision making process in the commission with the participation of the industry representatives and consumer protection authorities.

Currently 30 to 50 Mw of Non-Conventional Renewable Energy (NCRE) plants are installed with a US$ 50 to 100 million investment.

Many industry representatives from mini hydro, wind power, bio energy, solar energy industries and consumer protection authorities voiced their concerns regarding the sustainability of the industry and for better incentive packages such as feed in tariffs.

Feed in tariffs are introduced as a policy mechanism to promote the development of the renewable energy industry. This allows corporates which are involved in the industry a guaranteed payment from electricity or any other energy suppliers for the energy that’s been generated.

Kumarasinghe stated that the Ceylon Electricity Board purchases these energies from the producers and then distributes it among consumers. The main requirement of PUC is to ensure whether these tariffs are acceptable for the general public as well as for the investors.

The Bio Energy Association emphasised that an effective feed in tariffs scheme would pave the way to achieve a new challenging target of 20% in using renewable energy resources by 2020. They also professed that the only support that is given currently to the industry by the Government is through feed in tariffs and Standardised Power Purchase Agreements (SPPA) and also pointed that the industry needs Rs. 250,000 million by 2020 to fill the gap of inadequate capital available to the industry.

Speaking at the forum Air vice Marshall Thilak Dissanayake of Silver Mill Holdings Ltd., a company which pioneers in bio mass energy stressed the need to adopt proactive measures in the effort to make the nation independent of energy, decrease carbon foot print and pollution and also to limit the excessive foreign exchange outflow.

From the solar energy sector BAM Green (Pvt) Ltd. Project Manager Asanka B. Thennakoon showed in his presentation how effectively China fulfils its energy needs through solar power.

China, from almost 0% in 2000, increased its share in solar power to 65% in 2012. He noted the aggressive push by the public authorities in China where even non-claimable loans that are given for these companies.

In comparing to Sri Lanka, Thennakoon said that 85% energy of Sri Lanka’s needs are still fulfilled by thermal power which has a huge monetary cost and lots of negative externalities. Therefore he insisted that solar energy plants should get the benefit of feed in tariffs, develop the necessary skills for sustainability of the industry, immunity against foreign dumping and also for the Government to implement a zero per cent tax policy for this industry.

Responding to the criticism of adopting of Non-Conventional Renewable Energy (NCRE) sources with the expense of the higher price that consumers have to pay, PUC Director General Damitha Kumarasinghe stated that NCRE tariffs are generally higher in most of the countries, but considering energy security and the environmental aspects, it is more beneficial in the long-term. He also pointed out that in the Sri Lankan context, diesel power plants which are also very expensive with a higher social cost are on par with these renewable energies.

With regard to the final outcome of the forum, Kumarasinghe stated that the commission would analyse all the comments and ideas expressed by the stakeholders and take them into account to determine the final tariffs for 2012/2013 and present it on 14 September.

The Ceylon Electricity Board, Small Hydro Power Developers Association, Wind Power Association, Bio Energy Association, Consumer Consultative Committee, Renew Gen Enviro Ventures India (Pvt) Ltd. and Sampath Bank presented their views and contentions at the forum.