Strategies to overcome barriers for cleaner generation technologies in small developing power systems: Sri Lanka case study

Abstract

The penetration of cleaner and energy efficient technologies in small power systems such as the one in Sri Lanka has encountered many problems. This has caused major concerns among the policy makers, mainly in the context of the growing need to reduce harmful emissions in the electricity supply industry from the point of view of both local environmental pollution as well as the global warming concerns.

This paper presents the outcome of a study involved in identifying and ranking the barriers to the promotion of cleaner and energy efficient technologies and strategies to overcome these barriers in Sri Lanka. Barriers for renewable energy based systems such as wind and wood fuel fired plants (dendro thermal power) and cleaner technologies such as liquefied natural gas (LNG) fired combined cycle and IGCC (coal) were identified based on a survey. A direct assessment multi-criteria decision making method called Analytic Hierarchy Process (AHP) was used to rank the barriers. The most effective strategies are proposed to address the three major barriers for each of these technologies based on extensive discussions with all the stakeholders in the electricity industry.

It was found that lack of financing instruments, high initial cost and lack of assurance of resource supply or availability are the main barriers for renewable technologies. As for cleaner fuel and technology options associated with conventional generation systems, the lack of a clear government policy, uncertainty of fuel supplies and their prices and the reliability of the technologies themselves are the major barriers.

Strategies are identified to overcome the above barriers. Establishment of a proper feed in tariff, geographical diversification of installations and capacity building in commercial banks are suggested for wind power. Investment incentives, streamlining of wood production and research on site identification are proposed for wood fuel fired plants. Also the study suggests delayed implementation, combined planning with other sectors of the economy, incorporating environmental cost in planning and investment incentives as strategies for IGCC and LNG based technologies.