Annual General Meeting – 2008
The President’s Report
One more year has passed and it is time to take stock of the progress achieved and the barriers that still hinder us in our efforts to harvest the multitude of benefits from proper utilization of the Bio Energy Resources of Sri Lanka. The BEASL still remain the main organ for the promotion of this dream and it our collective responsibility to renew and re invigorate our efforts building up on the successes and over coming existing and emerging challenges. In this task the support given by my colleagues in the council and by the general membership is gratefully acknowledged. I would like to appeal for your continued support in the coming year for the new council as well.
1.0 Highlights of the Year
The sustained efforts the past 12 months since the last AGM have yielded some significant results , although not up to the level that was expected but which will augur well for the future of bio energy. We are justifiably proud of our contributions which led to these advances.
2.0 Positive Advances Made
2.1 Non Conventional Renewable Energy Tariff Structure
The principle of this tariff structure was supposed to be Technology based and Cost Reflective. Although there is some concerns about the basic philosophy it self which one might argue supports expensive technologies while there is no special incentives for the more economical technologies, we welcomed this initiative of the Ministry as a stepping stone to a more realistic tariff structure and a very significant advance from the totally unacceptable avoided cost system in place in the past. The pot of greater concern was the actual numbers and indices used in the calculation of the tariff for the different technologies. This has led to a lower tariff being announced for the use of agricultural waste based entirely on an incorrect and inadequate understanding of the sector. We continued our efforts to make the relevant committees to appreciate the ground realities but without much success. We will not give up this effort.
These efforts are continued to ensure that the new tariff tables for the year 2009 yet to be announced will be more realistic. The new tariff is expected to be announced during the month of January.
Then positive result of the announcement of the NCRE tariff of course has been the renewed interest in renewable energy and on bio energy.
2.2 Amendment of the SPPA
It was expected that the new tariff structure would require the amendment of the existing Power Purchase Agreement, as the CEB insisted in bringing in the Sustainable Energy Authority as a third party to a Tripartite Agreement. Thus many months of negotiations led to draft of such an agreement which was submitted to the Attorney generals department who has rejected this format. Thus many months was wasted in this futile exercises and the developers are still in some doubt about the final version of the SPPA. However it is understood that two Wind Power SPPAs have been signed in December 2008 which may mean a final version of the4 SPPA is now available. BEASL will obtain a copy and make it available to the membership.
2.3 Sustainable Energy Authority
The SEA has been in existence for over a year now. An important step taken by the SEA has been the call for new project proposals targeting the new NCRE Tariff structure. This evoked a large number of applications mostly from the mini hydro sector. Of greater interest to us is the fact that from a satisfactory number of applications for dendro power projects, 16 projects have received the provisional approval of the SEA amounting to 46 MW . While none of these projects are yet to reach construction stage it is hoped that at lease t a few will commence construction during this year.
BEASL has provided what ever assistance and support possible for these developers who have approached us.
We have also lobbied with the SEA to be more proactive in supporting these developers to help them over come the considerable amount of bureaucratic and other barriers that still hinder their reaching the stage for commencement of the projects.
The act provides the SEA with very wide powers and if used judiciously and proactively it can make great strides in the development of renewable energy and hopefully catch up on the lost time, when much progress should have been made.
The greater efforts and resources of the SEA are still focused on the continuation of the themes undertaken by The Energy Conservation Fund . It is important that the SEA appreciates its new responsibilities and the challenges and thus emerges out of the limited role played by the ECF.
A new Chairman Dr Kishan Deheregoda has taken over the duties as Chairman SEA from mid December 2008. BEASL wishes to express its sincere gratitude to the former chairman Mr Ananda Gunesekera who was always willing to listen to our views .
BEASL wish the new chairman success in meeting the many challenges faced by the SEA to make a significant impact on the renewable energy sector and offer our unstinted support.
2.4 Sub Station Augmentation
A major barrier to expansion of the renewable energy sector in the grid connected power sector has been the lack of capacity in the gird substations to absorb the power generated. We are thankful to the SEA for providing us with the plans of the CEB to augment a number f these substations . While this is a positive and encouraging sign we understand that the funding for these augmentation is expected from the ADB and the scheme is still In absence pending the restructruingof the CEB .
On the other hand there are plans to establish some new substations in the east which are t be funded from other sources and we wait more details of these schemes which are of greater interest to the Dendro Power Sector .
2.5 National Science and Technology Award 2008 for BEASL
BEASL is proud to announce the award of the National Science and Technology Award for 2008 in the “Development of eco-materials / eco friendly processes for Industry” by the National Science Foundation to Vidya Jothi Dr Ray Wijewardene, Mr Parakrama Jayasinghe , Mr P G Jospeh and Dr HA J Gunethilake , all prominent members of the BEASL. This award as a result of the great efforts of Mr P G Jospeh is in recognition of the work done in promoting Gliricidia Sepium as a source fuel, fodder and fertility.
2.6 Lanka Carbon Fund
The Lanka Carbon Fund which is expect to be a Private Public Partnership to exploit the Carbon Credit Potential in Sri Lanka of which the Renewable Energy sector sis a major player was launched in August 2008. The potential role that the Bio Energy can play in the future endeavors of the Lanka Carbon Fund was highlighted by the presentation made by the President BEASL in the inaugural seminar.
BEASL will work closely with the LCF to help the members to harness the benefits of the CDM scheme in relation to their projects.
2.7 Integrated Trial at Rathmalgara
The demonstration project at Ratmalgara to practically prove the triple benefits of Gliricidia as a source of fuel fodder and fertilizer as advocated by us is a great boon to us. The results of this demonstration has now been published in a technical paper by Dr H A J Gunethilake, presented at the recent seminar of the Asia Pacific Coconut Community We will upload this paper in our web with the permission of Dr Gunethilake for the use of our members and the general public.
2.7 Gassifier project at Gannoruwa
We are pleased that this project has now been completed and the official handing over was done on the 17th November 2008. Hon Hema Kumara Nanayakkare Minister of Agriculture graced the occasion as the chief guest . The gassifier of electrical capacity 10 kW installed at the to the Agri Park at Gannoruwa of the Department of Agriculture will serve as a demonstration unit for farmers as this is focal point where many rural farmers visit.. We acknowledge with gratitude the assistance received from the RERED project to cover the cost of the equipment. The cost of the building and other incidental expenses were funded from our own resources.
The unit fabricated by Messrs. Lanka Gassifers Ltd headed by Mr Lalith Seneviratne and our gratitude is due to them for an excellent job done.
2.8 Publication of a Promotional CD
The publication of a publish a promotional CD on the growing and utilization of Gliricidia Sepium for the benefit of all stake holders was undertaken by the Audio Visual Unit of the Department of Agriculture at Gannoruwa. The official launching of this CD was also done by the Hon Minister and we are sure that his support will be available to us and the Department in promoting the growing of Gliricidia by the farmers. The CD exhibits the dedication of the Director and staff of the Audio Visual Unit of the Department of Agriculture in producing a highly professional product and our sincere thanks are due to them.
2.9 New Thermal Energy Projects in Industry
The financial advantages of conversion of industrial thermal energy generation from fossil fuel to fire wood has been advocated by the BEASL for several years. Although, the very significant costs savings are appreciated by the industries the adoption of this change has been slow. However over the last year a several large industries have made the conversion and we are please dot note a fuel wood market of about 200 tons a day is now established. The expected growth of this industry is still slow mainly due to the lack of a formal market and a supply chain for the fuel wood.
This has received a major blow recently due to the drastic drop in the fossil fuel prices. However any far thinking industrialist will realize the advisability of pursuing this conversion efforts , considering that the low oil prices in the world market is a temporary phenomenon. This investing some of the savings resulting from the current low fuel prices against an inevitable price hike in the future is advocated by the BEASL.
We are continuing in our efforts to make the state authorities realize this situation, which is of immense importance to the country’s economy, by some proactive measures to establish or at least facilitate the growing of the energy plantations. In particular specific proposal have been made to the Ministry of Industrial Development , who sought our advice at the time of high oil prices. But the interest appears to have waned with the drop in oil prices which is indeed a shortsighted vision.
To over come this barrier BEASL has been trying to approach the respective industrial groups independently and through the Chamber of Commerce. In particular, the Ceramic Sector has been targeted as they are the mostly affected by the very high fuel costs in their production process.
3.0 Promotional Activities
The BEASL participated in several exhibitions able it with meager funds available, to continue to disseminate the information on the value of growing Gliricidia and its uses for different segments of the society. Our stalls were well attended and the results of these efforts will only be seen in the years to come. The hard work and the dedication of our tow staff members Mr Poorna Senanayake and Mr Harsha Pathirana in conducting these events successfully is acknowledged.
We were fortunate in obtaining an interview with the Chief Minister of the Eastern Province to make a presentation on our vision and programs. We are grateful to the Chief Minster for spending a considerable time with us and his understanding of the concepts presented by us. He has assured us of his support if we are able to generate the funds needed to intimate the multi faceted projects proposed by us at village level. Our gratitude is also due to Mr Thavasalingam, The deputy Secretary Technical at the Eastern Province Provincial Council for arranging for this appointment and we look forward to his continues support.
Discussions are under way with the UNDP to try to develop and aid program to leverage on the interest generated in this area.
4.0 Problems and Barriers
Of the many problems and barriers that is still prevalent two major sues have surfaced which requires the concerted efforts of the BEASL.
The most pressing need is the expansion of the fuel wood supply to overcome the diffidence of both investors and the lending institutions in entering the dendro industry. It is unfortunate that this is a problem that should not exist if the true value of the Gliricidia leaves is appreciated adequately. Our efforts to create this awareness and thus generate the interest in plantations targeting the leaves rather than the fuel wood is yet to yield significant results. We will however concentrate on this effort as it has the greatest potential of kick starting the industry.
The second barrier which is of greater concern is the lack of capital for the dendro power projects. While the investments needed for fuel switching is relatively small and will not pose a problem if the fuel wood supply issue is adequately solved, the investments needed for the dendro power projects are considerably larger. For the projects to be viable and to justify the considerable efforts required to develop a project, the size of the project should be a minimum of 1.5 MW and 5.0 MW being a preferred size. However at this level there is a distinct reluctance by the lending institutions to provide the loan capital which is essential for the development of the projects. Even those banks who are participant of the RERED projects show some reluctance.
The larger power projects are undertaken by the government with international loans and funding schemes at low interest. These avenues are not available for the dendro developers and even though some foreign investors are available they would like to see some local funding to as a measure of confidence building for the project.
This problem should receive the attention the BEASL in the coming year.
5.0 Staff Movements
There has been no staff movements during the year
6.0 Financial Status
The BEASL manages to survive on the interest received from the fixed deposits. However this drastically limits the scope of activities that can be undertaken. As such the generation of some project activities or other means of generation of funds is urgently needed.
L P Jayasinghe
President
4th January 2009
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