Unexplored opportunities in NCRE sector

Still there are unexplored opportunities in area of the Non-Conventional Renewable Energy (NCRE) sources such as small scale hydropower, wind and biomass in the country, Hemas Power Managing Director Kishan Nanayakkara said.

“There still is a sizeable area of unexplored NCRE opportunities. On the other hand opportunities in the wind and biomass front are hardly tapped,” he said.

Although the country’s best small hydropower sites have already been developed, we believe there are still a few sites with reasonably good hydrological properties available for development. All these undoubtedly point to interesting times ahead for the development of NCRE in the country,” Nanayakkara said.

Sri Lanka’s small hydropower sector has today evolved into a sizeable industry. As of June 30, 2009 a total of 81 NCRE projects are supplying 164MW to the national grid. Of this 76 small hydropower projects accounts for 153MW of installed capacity representing 93 percent of the NCRE sector.

“These NCRE sources are on the rise, with wider awareness on the minimization of the carbon footprint of the country and the intention to reduce dependence on imported fuel-based power plants.

Although the potential for medium scale hydro power projects might be limited due to environmental constraints, opportunities for small scale hydro, wind and biomass plants are considerable,” he said.

The National Energy Policy of Sri Lanka has identified fuel diversity and energy security in electricity generation as a strategic objective.

The development of NCRE projects was part of the strategy. According to the National Energy Policy, the target is to generate 10 percent of country’s energy output through NCRE sources by 2015.

The National Energy Policy also outlines plans to set up a special “Energy Fund” to provide incentives to promote NCRE technology and thus strengthen the transmission network.

With this in view, the GOSL recently obtained a USD 160 million long term loan from the ADB to support energy efficiency improvements, develop the use of renewable energy and increase connections and services to rural households, he said. “Hemas initially entered the power generation industry at a critical time, when the Government of Sri Lanka actively encouraged private sector participation in power generation in the face of the country’s rapidly increasing demand for energy coupled with the GOSL’s own inability to effectively meet this demand,” Nanayakkara said.

Hemas Power has, since its launch in 2003, supplied local consumption through both its joint venture thermal power plant in Puttalam and its hydro power plant in Teldeniya in its efforts to supplement the national demand for power.

Following the Hemas Group’s initial foray into the power generation sector via its JV investment in Heladhanavi and the success of its power plant, the Group further explored opportunities in the area of mini-hydro power generation. This saw the commissioning of its first-ever hydro power plant in Teldeniya in October 2008.