Presentation by Mr. Harsha Wickramasinghe: Deputy Director General-Sustainable Energy Authority on Research related to energy security : Opportunities & pitfalls" conducted at the Roundtable Discussion on Energy Security on September 16, 2014 and SLIDA Sri Lanka

1. Energy Security
Harsha Wickramasinghe
Sri Lanka Sustainable Energy Authority

2. What is energy security?
• IEA definition
– energy security as the uninterrupted availability of
energy sources at an affordable price.
• Energy security has many aspects:
– Long-term energy security mainly deals with timely
investments to supply energy in line with economic
developments and environmental needs.
– Short-term energy security focuses on the ability of
the energy system to react promptly to sudden
changes in the supply-demand balance.

3. Many aspects of Energy Security
1. Diversity of supply
2. Level of imports
3. Security of trade flows
4. Geopolitics and economics
5. Nuclear proliferation
6. Diversity of resources
7. Market/price volatility
8. Affordability / economic impact
9. Energy intensity
10.Reliability
11.Feasibility Centre for Strategic and International Studies www.csis.org

4. 1 Diversity of supply
• Over-reliance on:
– any one supplier
– group of suppliers
– A particular region
• security of a given region:
– political instability
– economic risk
• More diversity = better energy security.
• Ease of finding a replacement for a fuel being supplied:
– Fungibility (substitutability)
– Surplus capacity

5. 2 Level of imports
Passed
50% of all
our
earnings
60
50
40
30
20
10
0
12,000
10,000
8,000
6,000
4,000
2,000
0
1970
1976
1982
1988
1994
2000
2006
2012
Net imports as % of non petroleum exports
USD Million
Impact of oil bill
Net oil imports Non petroleum exports Net oil imports as % of non petroleum exports

6. Level of imports
• Less imports, the better
• Access to globally traded energy commodities
• Links to regional grids, gas networks etc.

7. 3 Security of trade flows
• Major portion of world oil squeezes through
five narrow channels
– Always better to depend on multiple channels
• Cross border energy trade
– Transit countries can make or break supply

8. 4 Geopolitics and economics
• Rise of large economies (India / China) with
growing appetite for energy
– Who will wield power over whom?
• Free and open global trade is a thing of the
past
• Oil producing countries now ‘awake’
– Rise of militancy an indication

9. 5 Nuclear proliferation
• Nuclear energy was seen as a cure
• Proliferation risks and safety issues took away
this opportunity
• No solution to waste problem

10. 6 Diversity of fuels
• Over dependence on one source
– Hydro then, oil now and may be coal next
• Whether renewable or not, the risks are
similar
– Droughts driven power cuts and severe impact of
oil price peak
• Over diversification
– If the fuels are not easily substitutable
– May need large infrastructure investments

11. Vulnerability

12. 7 Market/price volatility
• Higher volatility = uncertainty
– Differs or scuttles long term investments
– Degenerated infrastructure
• Energy ‘futures’
– Renewable energy and energy efficiency are two
such insurance schemes

13. 8 Affordability / economic impact
• Individual citizens
– Cost of energy products in the total cost
– Even if energy supply is secure, affordability and
affordability alone will drive economic growth
• Nations
– Cost of providing energy to realise economic
output

14. 9 Energy intensity
• Lower, the better insulated we are
– Price driven reductions are not counted!
70
60
50
40
30
20
10
0
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
Energy Intensity of Economy toe/GDP LKR million
GDP
Energy Intensity of Economy
Primary Energy Intensity Commercial Energy Intensity

15. 10 Reliability
• The prevalence of an energy supply
– Aging infrastructure, mismanagement and neglect
• Issues with technology and knowledge
– Coal power plant vs. refinary

16. 11 Feasibility
• Enlarging the workspace – the only way to
embrace new things (technology)
– Pushing further is a must
– Pushing too hard may be harmful
• The pace of previous evolutions must be
understood
– Case of biomass energy models
– Case of affordable storage

17. Technology roadmaps
• As a decision aid, roadmaps are useful tools for:
– Strategic and operational decision making and action planning
– Achieving a desired future state of development
– Portraying structural relationships among S&T and applications
– Improving coordination of activities and resources
– Identifying, evaluating and selecting strategic alternatives
– Communicating visions to attract resources
– Stimulating investigations
– Monitoring progress

18. Basic architecture of roadmaps
Phaal (2003)

19. Basic architecture of roadmaps
• An S&T roadmap consists of
nodes and links
• These elements can have
quantitative and qualitative
attributes.
• Construction of a roadmap
requires identification of the
nodes and their attributes,
connecting the nodes with
links, and specifying the link
attributes.

20. Generalised architecture of a roadmap
Markets/Customers/Competitors/
Environment/Industry/
Business/Trends/Drivers/Threats/
Objectives/Milestones/Strategy
Products/Services/Applications/
Capabilities/Performance/
Features/Components/Families/
Processes/Systems/Platforms/
Opportunities/Requirements/Risks
Technology/Competencies/
Knowledge/Development
Skills/Partnerships/Suppliers/
Facilities/Infrastructure/
Organisation/Standards/Science/
Finance/Research

21. Resource Development
• Real economic growth has always been...
– very closely associated with the development of
human capital of the country
– focused attention to develop HR to undertake
complex and difficult tasks
• Countries with vast natural resources but very limited HR, tend
to be quite vulnerable to external factors
– Hence it is very important to clearly define the
difference between resource exploitation and
resource development

22. The difference…
• Resource exploitation is the process of
applying external knowledge, experience and
investment to utilise natural resources
– Mostly in raw material form
• Resource development is the process of
developing own knowledge, expertise and
capability to utilise natural resources
– An industry by itself

23. Nature of Renewable Energy
Technologies
Technology Hydro Solar Wind Biomass
Roots
Europe USA/Japan Europe Europe
Geographical Spread Eastern / Western
Europe, China
USA. Europe,
Far Eastern
China, Europe,
India and USA
Europe, USA and
India
Nature of Industry Custom
Engineering
Process
Industry
Custom
Engineering
Custom
Engineering
Investment on Manufacturing
Plant
Low High Low High
In-sourcing opportunities
High Low Significant Significant
Necessity to outsource
Medium High High High
Price competition from
emerging industrial nations
Average High High High

24. Do we have a fair chance ?
• RE technologies,
– Remain within the borders of clusters of developed countries
– Or within regions and economic blocs
• Need for significant capacities in RE and necessity to democratise
RE technologies
– Mature economies offer very limited manufacturing capacity
• Debt crises
• Sovereign bond crises
• Aging populations
• Opportunities for emerging economic engines (India & China) to
move in quickly, with vigour and strength
– from a growing economy
– a younger population
– sufficient clout, even to force shut many infant industries in other
countries by resorting to dumping?
• What have we done to embrace sustainable energy technologies ?

25. A case in point
• Manufacturer of hydropower turbines
– Board of Investment registered company is prevented from selling
more than 20% of the output to the local hydropower industry.
– Company can supply nearly 75% of the local demand
– Will not have VAT concessions, available to competing imported
products, tariff incentive abused
• A case for wind turbine manufacturing industry
– Taking initiatives to enter local market
– Significant advantages from logistics
– A reality, dawned sooner than we expected – now a worrisome audit
investigation !
• A case for electric vehicle manufacturing industry
– Long delays, lack of commitment – another worrisome audit
investigation..!

26. Our own manufacturers…
Attribute Hydro Turbines Wind Turbines
Investment LKRM 700 200
Capacity Turbines/year 25 20~50
Capacity MW/year 50~75 10
Employment Persons 96 75
Engineers 6 5
Skilled Workforce 45 40
Semi Skilled 25 20
Unskilled 20 10
Revenue LKRM/year 1,650 940

27. A new approach
• Based on old principles
– Integration backward?
– Integration forward?
– A combination of both ??
• A virtuous cycle
– Having three major elements
• Resource Development
• Technology Development
• Investment

28. A look at the future
0
500
1,000
1,500
2,000
2,500
Time
0:30
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0:00
Demand MW
Time of Day Hours
Daily Load Curve

29. 0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0:30
1:30
2:30
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Demand MW
Time of Day Hours
Daily Load Profile
Coal Power as Base Load from End 2010
embedded generation
Valley filling
more scope for renewables

30. Some load management options
• Special off-peak tariff
• Load management
• Pumped storage
• Electric vehicles
• Efficient lighting
• Time of day tariffs

31. •An attractive transport tariff
•Cheaper during off-peak
• Expensive during peak
•Fiscal incentives for vehicles
Load Profile 2005 May 25
0
250
500
750
1000
1250
1500
1750
2000
0:00
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0:00
Time of Day
Demand MW
Total Running cost
LKR7.00 /km @
LKR16.00 per kWh

32. Conceptual Design

33. Conceptual Design

34. Conceptual Design

35. Conceptual Design

38. Conceptual Design

39. Conceptual Design

40. Product design
Electronic / Electric components

41. Product design

42. Product design
• Chassis Design

43. Range 100km
Charging Time 8 hours
Battery bank Lead Acid
Top Speed 60km/h
First Run Aug 2013

45. Why we fail
• We ‘invent’ things and struggle to market it
• They ‘solve’ real problems
– An industry partner, university and a match maker (NEDO)
• Absolute lack of industry leadership (mostly a pack of
followers)
– Risks too high for our feeble, infant and budding industries
• Unwillingness to pay for knowledge
– They will part with 16 million dollar for a 10MW wind
plant, but will attempt to steal a feasibility report without
paying a consultant 5,000 dollars..!
– Distrust of the research community
• Reward / penalty structure of research community
– No incentive to do, safer to avoid

46. Conclusion
• Strategic alliances must be built
– Industry, research and catalysts (local or foreign)
• Status and image of research community must
be elevated
– They must be consulted (not the electrician..!)
• Government must take more risks
– Industry must take some risks
• Few longer term thrusts must be nurtured

47. In a nutshell…

48. Thank You
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