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Meeting the Energy Needs of Tomorrow

Meeting the Energy Needs of Tomorrow. Anil Cabraal Director, Energy Forum Director, KMRI Lanka (pvt) Ltd. Presented at: Powering the Nation for the Future Sri Lanka Economic Summit 2013 The Ceylon Chamber of Commerce Cinnamon Grand, Colombo July 11, 2013. Overview.

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Meeting the Energy Needs of Tomorrow

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  1. Meeting the Energy Needs of Tomorrow Anil Cabraal Director, Energy Forum Director, KMRI Lanka (pvt) Ltd. Presented at: Powering the Nation for the Future Sri Lanka Economic Summit 2013 The Ceylon Chamber of Commerce Cinnamon Grand, Colombo July 11, 2013

  2. Overview • Energy today and trends • What are the priorities? • Meeting the energy needs of tomorrow

  3. Economic development and energy use Source: World Bank Databank

  4. Energy use Source: SEA, 2011 Energy Balance

  5. Transportation is main user of petroleum Source: SEA Source: CEYPETCO

  6. Electricity sector • 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

  7. Electric Power: Move to coal • 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 Computed from: Historical data and CEB (2011), Generation Expansion Plan 2011-2025

  8. Risk and uncertainty by depending on few generation sources • Volatile prices • Petroleum and coal price • Dendro fuel • Resource uncertainties for hydro, wind, solar • Currency depreciation • National and international policies • International crises Source: www.indexmundi.com. Coal cost forecast from UK, Department of Energy and Climate Change, October 2012

  9. Factors to consider in meeting tomorrow’s energy needs • Key sectors • Risk and uncertainty • Technological • Policy

  10. Priorities • Transport • Electricity supply and demand • Petroleum supply

  11. Options – Transport • 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)

  12. Electricity – Demand-side interventions • 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

  13. Managing risk and role of diversity • 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

  14. Increasing power supply diversity 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

  15. Increasing fuelwood supplies • 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 • 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…”

  16. Petroleum sector priorities • Refinery upgrade • Oil and gas exploration

  17. Smart Grids to improve efficiency, reduce peak loads and costs, integrate distributed generation, and load management IEA (2011) Technology Road Map: Smart Grids

  18. Conclusions • 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: • 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

  19. Thank You

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