The problem will be implementation not intentions

Energy Policy: A good start

By Prof. Kumar David

The consultation paper "National Energy Policy and Strategy for Sri Lanka" Daily News 31st July issued by the Power and Energy Ministry calling for the submission of public comments by August 31 is, as a starting point, a pretty decent document.

The strength of the document is that it is realistic in that it takes a fairly comprehensive view of a whole range of energy policy related issues and initiates discussion on proposals in a manner that is, in theory, doable. Why the caveat "in theory"? Because reasonable policy measures often go awry in Sri Lanka due to extraneous pressures - partisan politics, short-sighted trade unionism or financial misdemeanour. But let us leave such concerns to one side and discuss the proposals on their merit.

Dirigisme role of the state

The Consultation Paper clearly recognises that the state must play a dirigisme (directive) role in energy policy; this is not to be confused with state ownership of all and every enterprise, but rather that the state must take effective control and leadership in directing and guiding policy. Private enterprise and capital have an important role to play but they must dovetail into a larger national game plan.

This is not said quite so explicitly in the paper but in effect this is what its overall thrust amounts to - good. It is a welcome reorientation from the freedom of the wild ass that post-1977 untrammelled open-market economics inflicted on the country.

Open-house, rather like a brothel, in bus transport and its implications for petroleum consumption, apoplexy in the rail system, oil-fired private power plants of questionable probity, neglect of R&D in alternative energy, neglect of the potential of the Ruhunu Port for international bunkering (among its other possibilities), are a consequence of a lack of purposeful control and directive state policy.

If as the consultation paper intends the state does indeed take on a directive role in respect of energy sector governance, energy security, enhancing energy sector management, consumer protection, environmental impact amelioration, pricing policy and promoting indigenous resources, it would indeed be a major forward step.

The directive policy role of the state must not be confused with state ownership of enterprises. South Korea and Taiwan have clearly demonstrated this difference; the state directed and charted the macro-economic development profile in the critical period when these economies where emerging as the "Asian Tigers" but did not focus on owning and managing individual enterprises.

In our case certain key energy enterprises will have to be state owned, the large hydroelectric projects, petroleum refining, electricity transmission, a future bulk LNG harbour terminal, are examples, while at the other end of the spectrum, for example electricity distribution and petroleum refining, is much better left to non-state retail businesses.

The Consultation Paper seems to be open to such suggestions and I hope the Ministry will take note of discussions in the media including inputs such as this small article.

Alternative technologies

A very welcome feature of the Consultation Paper is that it reads as having been prepared by serious professionals (in the conventional sense) but also with sensitivity to renewable energy, indigenous sources and energy efficiency, conservation and environmental concerns.

What I am specifically referring to is that these latter matters are all adverted to in individual subparagraphs of the paper, but at the same time the paper is quite realistic in recognising the limited scope for renewable energy in the one to two decade time frame. For example, the paper raises the possibility of up to 15% of grid electricity coming from renewable sources by 2015; though ambitious this is a nevertheless a proposition grounded in common sense, unlike the wet-behind-the-ears NGO Green Lobbies which hallucinates about going all renewable within 25 years and eliminating all petroleum and coal imports in this time frame.

The term Dendro, coined from a Greek word I believe, is enthusiastically bandied about in Sri Lanka, and its aficionados purport that enough fuel-wood can be grown in small plantations, under coconut trees and the like to meet all the countries electricity needs with ease.

I have seen a report that claims that there is 4000MW capacity potential in the country and the associated annual energy potential is 40,000 TWh (Proposal for Reconstruction and Development in Sri Lanka by BEASL). Apart from the elementary folly that this envisages a load-factor of 120% - meaning all plant must run flat out for 10,000 hours per year even though an earth-year consists of 8760 years (perhaps the BEASL was thinking of a plant elsewhere in the solar system!), the attention paid to land availability, conflict with alternative land uses, crucial labour related issues, plant reliability, and similar issues is woefully inadequate.

Much better and more professional studies have been done in other parts of the world. The point I am making here is that if the programs of study initiated through the outcomes of the Consultation Paper leads to scientifically and professionally sound conclusions, then it will be a useful antidote to the amateurism that now hold centre stage on the renewable and unconventional energy source picture.

Wind-power is another similar area; I am not aware of any systematic wind audits, assessment of potential on an all island basis and consideration of difficulties. It would be good if the Ministry could, again though the process it is initiating, produce a formal and reliable report setting out the countries long-term wind-energy development programme.

The big challenges

The biggest challenges facing the country's energy planners, however, will not be on the technical front but will come from corporate governance and management issue and from pricing policy.

The governance and management concerns I am adverting to are not confined to the state sector only as the private sector in Sri Lanka too has a long way to go in improving its technology management expertise.

These are areas in which the Universities have to be drawn into provide continuing education programs for practising professionals, and to discharge this task they will, in turn, need lead time to train teaching staff. Both technology management and knowledge management are fancy new topics in equipping working professionals, usually through Master's programmes or short-courses, for dealing with the challenges of a vital multi-disciplinary subject area such as Sri Lanka's national energy policy and strategy. The Consultation Paper also refers to the importance of consumer participation; this is laudable in the context of the collapse of consumer confidence in the telecommunications sector and in the telecommunications Regulator. It is to be sincerely hoped that the same fate will not overtake the energy sector. All in all the Consultation Paper makes a commendable start because of its width and depth and even though there are bound to be many obstacles on the way, it is time for a bold beginning.