Financial Times

Dendro power opens up business opportunities all around Sri Lanka
By Nilooka Dissanayake
I have been sucked into this whole area of renewables and with it your Business@Home column when I started a series of articles on investment opportunities for the future.

I am not complaining because it has opened up huge vistas of what is happening around the world and how everyone can, in their own way, contribute towards solving the looming global power crisis. It also shows, as with any crisis, the business and other opportunities that are born as a result. One such area that will create many opportunities will be the adoption of Dendro power, or as readers of this column would be familiar with, biomass energy.

As you know, a Cabinet Paper has been approved allowing Sri Lanka purchase biomass energy, particularly Dendro power into the national grid. Dendro power for Sri Lanka for the most part, will be generated using wood of Glyricidia.

But how does it create business opportunities?
A Q&A session with the Minister of Science and Technology, Prof. Tissa Vitharana came up with interesting perspectives on this issue.

Do you believe Dendro power is suitable for Sri Lanka?
I see it as having a very bright future if we can mobilize the country to go along.

On the one hand, Dendro power will be generated from small generators spread throughout the country. This helps ease the security concerns and spreads the risk. Secondly, because the distances over which electricity is distributed can be substantially reduced, it will help Sri Lanka reduce currently, very high energy losses. At the moment approximately we lose about one fifth of the energy generated because of system losses.

Also, unlike coal power or hydroelectric power, there is no seasonality for the dendro power supply. It will be available all year round. The crops can be grown all over Sri Lanka.

Everyone is concerned about the immediate energy needs. Dendro power is a viable option to consider because, if taken seriously and implemented, Dendro generating capacity can be added to the national grid within a matter of two or three years starting from now. The time frame for a coal power plant would be something like five to six years.

If this is such an attractive option, why is there a delay in implementation even though a Cabinet Paper has been approved for purchase of Dendro power into the national grid and prices have been set? The delay is one of attitudes and varying points of view. Technically once the Cabinet Paper is approved it is up to the line Ministry to go ahead and implement it. However, you must remember this Cabinet Paper was approved during the time of Minister Susil Premajantha who became totally convinced on the matter.

Now, we need to again start the process to discuss the matter with the new Minister. This is critical because, the key implementing agency, the Ceylon Electricity Board, is generally oriented towards big projects. Dendro is an entirely different proposition from what they are used to handling. They also believe that there are technical issues that might render this project infeasible. So, without the support at the highest level, the Dendro power project will not move forward. We intend to set up a meeting shortly with the Minister of Power & Energy to take up the matter. I feel positive about the outcome.

Do you think the private sector in Sri Lanka will take on this opportunity in the same way they have taken on the micro hydropower projects and thermal power generation?
I know for sure the private sector will come forward. At the rates that have been agreed in the Cabinet Paper they find it attractive to come forward and install generating capacity, paying for it themselves. I have discussed this matter and a number of private sector organizations were quite positive.
So, there you are. If you are interested, there will be opportunities for you in Dendro power at many levels. On one hand, there will be the need for Glyricidia grown on a large scale. On the other hand there will be the power generating units. And if Dendro power is to become a big part of life in Sri Lanka’s energy map, so many other aspects will also open up business opportunities, big and small at a regional level.

On another level, if Dendro is demonstrated as a widely implementable option, many private sector organizations can get into it themselves to try to reduce their energy bills using power generated inhouse, depending on national grid as only a back up option. Then sky is the limit for the business opportunities, both direct and indirect.

Share with us your ideas on this topic. Send your comments and questions to ft@sundaytimes.wnl.lk.

Back to Business