The President while presenting the 2013 budget offered a basket of incentives for the renewable energy sector to attract both local and foreign investors to embark on this much neglected renewable energy sector that has not received the desired attention in its development drive for the last six decades. He emphatically noted that promoting renewable [...]

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The Sundaytimes Sri Lanka

Wind Power- A solution to the energy crises

By J.A.A.S.Ranasinghe
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The President while presenting the 2013 budget offered a basket of incentives for the renewable energy sector to attract both local and foreign investors to embark on this much neglected renewable energy sector that has not received the desired attention in its development drive for the last six decades. He emphatically noted that promoting renewable energy is a key necessity to slash the heavy crude bill and the resultant foreign exchange savings would have a positive cushioning effect on the trade deficit. Hence, the granting of tax concessions through exemption of import taxes for solar, wind and bio mass power systems and other renewable energy equipment which could not be manufactured in the country backed by the slashing of corporate tax rates to concessionary 12 per cent is viewed as a noteworthy incentive given for the development of wind farm projects in the right direction.

In this context it is heartening to note that a team of new investors who have had hands on experience in the construction of mega wind power plants in Europe are expected to meet government authorities this week, even before the dust of the second reading of the budget debate settles down in response to the budget proposals. These three experts – Micheal Huntings Ford, Peter Crone and Jens Dickmann who have been reportedly instrumental in setting up the world’s largest off shore wind farms in Array and Bristol, UK, where there are generating 1,000 MW and 1.500 MW to the national grid of UK-, are expected to have a series of discussions with the Sri Lankan Government.

Undoubtedly, it is a herculean task for the government to convince them on the commercial viability of the off shore wind farm projects in Sri Lanka in the light of the tax concessions and other forms of incentives declared in the 2013 budget and secure their technical and financial support, as Sri Lanka is woefully lacking expertise and technology in this wind farm energy sector.

Lankan energy sector

Sri Lanka no longer can depend on hydro-power or thermal power given the sheer number of power cuts imposed annually. Though this adverse trend was somewhat resurrected with the opening of Norochcholai Coal Power plant, its frequent break-downs have aggravated the issue time and again bringing untold hardship to the people and industry. Hence the reliability of an environmentally friendly and easy accessible renewable energy source has to be found, which is sine-qua-non for the economic development of the country.

In 2011 and 2012, our energy sector experienced significant pressure due to high oil prices and lower hydro power generation caused by erratic weather conditions which prompted the increase of thermal power use. The average price of crude oil which was in the region of US$80 in 2010 drastically increased to $112 per barrel in 2011 resulting in a $4.8 billion cost. Though the government has taken some measures to promote energy conservation and development of renewable energy, the vulnerability to oil prices has had a debilitating effect on the economy and this unhealthy situation could create economic imbalances unless remedial measures are taken for the generation of an alternate energy source such as wind energy power.
Though the Sri Lanka Sustainable Energy Authority (SLSEA) has an ambitious plan to increase the share of renewable energy in power generation to 10 per cent in 2015 and 20 per cent in 2020, it is extremely doubtful whether it is able to achieve these targets given the paucity of foreign exchange restrictions and the lack of technology and expertise. Hence, it is in the light of these inhibitions, the Sri Lankan Government should seize the visit of this delegation and have a productive dialogue for the setting up of an off shore wind farm project in Sri Lanka. The discussion, in my understanding, should revolve around a strategy for the investors to build the off shore wind farm project at their cost and later to transfer the project to Sri Lankan government (BOT) when the pay-back period is over for which necessary tax concessions have been provided in the budget.
These investors from British and Germany, I believe, have the required financial resources and technology expertise for a gigantic investment on off shore wind farm projects, provided the negotiations are taking place at the highest level in a true spirit of understanding and mutual trust. The Sri Lankan Government should understand that it has a bleak future unless the heavy drain out of foreign exchange on the oil bill is curtailed. It should learn lessons from other countries that are working on wind power generation at breakneck pace. Sri Lanka is an island and it is surrounded by the sea, which is an ideal platform for the establishment of offshore wind farm mills.

Global scenario

Since 2004, wind energy deployment has risen dramatically. Global installed capacity increased from 40,000 MW to 94,000 MW at the end of 2007 at an average annual growth rate of nearly 25 per cent. Europe is the undisputed global leader in wind energy tchnology. Some 60 per cent of the world’s capacity was installed in Europe by the end of 2007 and European companies had a global market share of 66 per cent by 2007. Penetration levels in the electricity sector have reached 21 per cent in Denmark and about 7 per cent and 12 per cent in Germany and Spain, respectively. Achievements at the regional level are even more impressive: the North German state of Schieswig-Holstein is reported to have over 2,500 MW of installed wind capacity enough to meet 36 per cent of the region’s total electricity supply demand, while in Navarra, Spain, some 70 per cent of consumption is met by wind power.

Offshore wind by now accounts for more than 3 per cent of total installed wind power capacity in the world and development has taken place mainly around North Sea and the Baltic Sea. At the end of 2007, there was a capacity of more than 1000MW located offshore in five countries: Denmark, Ireland, the Netherlands, Sweden and the UK. Most of the capacity has been installed in relatively shallow water (less than 20m) and no further than 20 KM from the coast, so as to minimize the costs of foundations and sea cable.

The nature of business in wind energy is changing at a rapid pace. This change brings new money to the industry and decreases dependence on banks for initial funding. Powerful sponsors are also arriving on the scene. Projects are increasing in size and large-scale off shore activity is taking off; since banks favour big projects, this is a change for the better. There is a strong political and environmental support for renewable energy which means that wind energy funding is still viewed as a very attractive option.

Renewable Non-Polluting Resource

Wind energy is a free, renewable resource, so no matter how much is used today, there will still be the same supply in the future. Wind energy is also a source of clean, non-polluting, electricity. Unlike conventional power plants, wind plants emit no air pollutants or greenhouse gases. According to the U.S. Department of Energy, in 1990, California’s wind power plants offset the emission of more than 2.5 billion pounds of carbon dioxide, and 15 million pounds of other pollutants that would have otherwise been produced. It would take a forest of 90 million to 175 million trees to provide the same air quality.

Cost issues

Even though the cost of wind power has decreased dramatically in the past 10 years, the technology requires a higher initial investment than fossil-fueled generators. Roughly 80 per cent of the cost is the machinery, with the balance being site preparation and installation. Wind costs are much more competitive with other generating technologies because there is no fuel to purchase and minimal operating expenses.

In general, the cost of conventional electricity production is determined by four cost components, namely fuel, carbon dioxide emissions (CO2), operation and maintenance (O&M) and capital cost component including planning and site work. Implementing wind power avoids the full fuel and CO2 costs, as well as a considerable share of conventional plants O&M costs. The amount of capital costs avoided depends on the extent to which wind power capacity can displace investments in new conventional power plants; this is linked directly to how wind power plants are integrated into the power system.

Wind Energy Resources in Sri Lanka

Wind energy is very abundant in many parts of Sri Lanka. Wind resources are characterized by wind-power density classes, ranging from class 1 (the lowest) to class 7 (the highest). Good wind resources (e.g., class 3 and above, which have an average annual wind speed of at least 13 miles per hour) are found in many locations. Wind speed is a critical feature of wind resources, because the energy in wind is proportional to the cube of the wind speed. In other words, a stronger wind means a lot more power.

Since site location of off shore wind farms is inherently restricted by the accessibility to grids, utmost care has to be taken in selecting possible locations. Puttalam peninsula in which the Norochcholai Coal Power Station is located is reported to be an ideal site for the set of offshore wind farm mills. Currently two onshore wind farms, namely Seguwantivu and Vidatamunai and Powergen contribute power to the national grid. By analyzing the historical wind data from the Meteorological Department, a proper assessment could be made with regard to the location of offshore wind mills. A fact to be bone in mind is that a minimum wind speed of 3.5 meter per second is required. During the monsoon period, the wind power increases from 13 to 15 meters per second.

According to bathymetry figures, the north east coast where the Sampur Coal Power Station near Mutur is located is also reported to be a potential site for off shore wind power projects. However, it being on the east coast, the exposure the prevailing south westerly winds could be reduced by the effect of the landmass. Secondly, the east coast is prone to tsunamis and although the impact of tsunamis on offshore turbines in 15m-45m water depth may be manageable, it may be a prudent step to critically examine these issues in much detail. The off shore site adjacent to Kerawalapitiya is expected to have a favourable wind speed considering the easy access to the 220KV transmission network

Advantageous

Nimal de Silva, a Sri Lankan wind farm expert domiciled in the UK is of the view that Sri Lanka could reap enormous benefits by resorting to this new source. Sri Lanka experiences heavy drought annually, which has a deleterious impact on the generation of hydro-power. The size of the water reservoirs is another inhibiting factor whereby the reservoirs cannot store the entire in-flow of water during rainy seasons. The heavy dependability of fuel for the operation of thermal power plants during drought can be avoided, as wind farms are not dependant on fuel but on wind which is readily available around Sri Lanka.

Though the initial investment is exorbitant, Sri Lanka could recover the entire cost of investment within a relative period of 10 to 12 years. The wind farm sector could create employment opportunities more than 10,000 people initially by way of direct and indirect jobs. Wind energy companies in the EU employ around 108,000 people; when indirect jobs are taken into account this figure rises to more than 150,000, according to Mr. Silva. He says the concentration should therefore be off shore wind farms because of the limited land space of the country. Environment pollution is minimal. With the transfer of technology, our engineers could secure lucrative employment in Europe, as the trend in Europe is for wind power. It is the ideal time for our universities; preferably the University of Moratuwa to establish a faculty of wind farm energy technology so that gainful employment could be found for young engineering graduates. According to Mr. Silva, some 160 off shore plants are currently in operation, under construction or being planned around the coastline of the European continent.

Funding arrangements

Having realized the potential benefits that could be reaped from the off shore wind farms, many countries have come forward to lend their financial support for the expansion of the wind farm industry. Green Investment Bank of UK is on course to substantilly reduce the cost of electricity from off shore wind over the next seven years. The UK is clearly relying on offshore wind farms to achieve its renewable energy goals.

In Germany, the off shore wind business model is becoming more attractive to the banks who are signalling their readiness to co-operate to develop the industry. The KfW’s Offshore Wind Energy programme is providing up to Euro 5 billion for offshore wind farms in the Baltic and North Sea. The KfW has indicated their willingness to give Euro 100 billion to help finance. The KfW has long been highlighted as a possible source of credit for upfront costs relating to off shore wind projects and is planning to make huge loans available for renewable energy projects including wind energy.

We cannot expect the Sri Lankan Government to fall in line with the same financial model due to paucity of funds but it could certainly look forward to financial assistance from international funding agencies for these projects. Or else, the government could enter into bilateral agreements with developed countries such as Germany with a view to establishing these wind farms on BOT basis.

Even the Maldives, our neighbour has embarked on a massive investment of US$ 200 million for an off shore wind farm mill in Kaafu Island, which is located 54.3 km from the shore.

Wind Energy and Power

Wind is a form of solar energy. Winds are caused by the uneven heating of the atmosphere by the sun, the irregularities of the earth’s surface, and rotation of the earth. Wind flow patterns are modified by the earth’s terrain, bodies of water, and vegetative cover. This wind flow, or motion energy, when “harvested” by modern wind turbines, can be used to generate electricity

The terms “wind energy” or “wind power” describe the process by which the wind is used to generate mechanical power or electricity. Wind turbines convert the kinetic energy in the wind into mechanical power. This mechanical power can be used for specific tasks (such as grinding grain or pumping water) or a generator can convert this mechanical power into electricity to power homes, businesses, schools, and the like.

Wind turbines, like aircraft propeller blades, turn in the moving air and power an electric generator that supplies an electric current. Simply stated, a wind turbine is the opposite of a fan. Instead of using electricity to make wind, like a fan, wind turbines use wind to make electricity. The wind turns the blades, which spin a shaft, which connects to a generator and makes electricity.

Wind turbines are often grouped together into a single wind power plant, also known as a wind farm, and generate bulk electrical power. Electricity from these turbines is fed into a utility grid and distributed to customers, just as with conventional power plants.

Environmental concerns

Although wind power plants have relatively little impact on the environment compared to fossil fuel power plants, there is some concern over the noise produced by the rotor blades, aesthetic (visual) impacts, and birds and bats having been killed by flying into the rotors. Most of these problems have been resolved or greatly reduced through technological development or by properly siting wind plants.

Supply and transport issues

The major challenge to using wind as a source of power is that it is intermittent and does not always blow when electricity is needed. Wind cannot be stored (although wind-generated electricity can be stored, if batteries are used), and not all winds can be harnessed to meet the timing of electricity demands. Further, good wind sites are often located in remote locations far from areas of electric power demand (such as cities). Finally, wind resource development may compete with other uses for the land, and those alternative uses may be more highly valued than electricity generation. However, wind turbines can be located on land that is also used for grazing or even farming.

Exceed benefits of the Mahaweli

It is hoped that saner counsel will prevail among the governmental delegation who negotiates with the expert panel on this crucial issue considering the far-reaching benefits the country could derive, which in my opinion, would exceed the economic and social benefits of the accelarated Mahaweli project.

(The writer is a Productivity Consultant and an External Trainer presently attached to the Ministry of Public Reforms)




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