Vallibel contributes more green energy to the nation
Vallibel is a diversified conglomerate which has invested in
financing, banking, leisure, garments, manufacturing industry and the
power sector. Under Vallibel power, it develops renewable energy
projects to generate electricity and supplies electricity to the
Vallibel ventured into the power generating business in early 2000
and has successfully commissioned its 10MW plant in 2004, which later
went public with a record breaking oversubscribing shares in 2006 and
has generated substantive profit for its shareholders. Since then,
Vallibel has invested extensively in the hydro power sector,
contributing more and more green energy to the nation.
Vallibel Power Erathna PLC Jt. CEO, Russell De Zilva, in an exclusive
interview with the Daily News Business
Q: What are the current projects that
are in operation under the Vallibel Group?
A: With an installed
capacity of professionally engineered 10MW “Erathna” mini hydro
projects, simultaneously the Vallibel engineering team have developed
8.64MW, “Way Ganga“ small hydro power projects in the same year and 2MW
“Barcaple” small hydro power projects in 2007 under Didul (Pvt) Ltd.
Identifying the further potential in Kuru Ganga, in the Ratnapura
District, it again successfully commissioned its 6.5 MW “Adawikanda”
small hydro power project, under Alternate Power Systems (Pvt) Ltd in
Securing professionalized talents, Vallibel Power ‘Erathna’ PLC,
acquired Country Energy (Pvt) Ltd to develop 4.65 MW Kiriwaneliya hydro
project and 7.2 MW Denawaka hydro project, while tying up with the
national grid on December 2011 and February 2012 consecutively.
Recognizing the importance of local value addition and the
development of local manufacturing industry as an essential driver of
socio-economic development of the country, Vallibel has taken a
strategic decision to develop a 850kW pilot wind power project, using
locally manufactured wind turbines supplied by Vawin (Pvt) Ltd, Sri
Jt. CEO, Russell De Zilva
Q: What is the Vallibel power
contribution to the national electricity demand?
A: The CEB has recorded
its ever highest daily electricity demand of over 35 GWh recently. With
the newly commissioned two power plants, Vallibel can deliver 100GWh of
electrical energy annually to the national grid, which is equivalent to
the three days electricity consumption.
At present, the annual electricity demand will be generated by the
total installed hydro power plant capacity of 1600 MW.
Out of that total hydro wealth 1400 MW belonged to the CEB and little
over 200 MW owned by small private power producers. The Vallibel Group
contributes to that by an installed capacity of 29 MW, which accounts to
an annual generation of 100 GWh electricity annually, to the system with
a 15% market share from private power producers.
Q: Where do you likely see this
number to be in the near future?
A: Sri Lanka has the
estimated potential of four small hydropower projects of over 500 MW and
nearly 50% of the resources are under current development. Vallibel also
owns new permits of cumulative capacity of 15 MW under its project
development companies and constructions of some of the new projects are
schedule to start soon.
Q: How far is Vallibel in success to
generate electricity from other renewable energy sources?
A: Our research team had
already identified the potential of wind energy and solar PV
installations in Sri Lanka. We cannot just rely only on hydros and are
trying to find out options to make other renewable energy sources
affordable to generate electricity in Sri Lanka. In line with that, we
have set up a pilot wind power project in a complex terrain on the
Balangoda central hills. This project is to show the possibility of
harnessing the wind resources scattered over the central planes were we
have less developed infrastructure which restrict the transportation and
installation of wind turbines.
Q: How has year 2012 been so far?
A: We are experiencing
unexpected dry weather this year, in our hydro power plant catchment
areas, which have adversely affected the power generation. This is the
worst year recorded in the last decade.
When compared to the last year, power generation has reduced by 22%,
but we are expecting that to be normalized soon as the monsoon has
Q: As the CEO of the company, how do
you see the sector and what you believe?
A: A development of hydro
power projects is a great business which operates in a very attractive
market space; fact of never compromising the quality has brought us the
confident that we will make the best out of anything. Managing the hydro
power business prudently is not a difficult task but we have to
understand the fact that every day market barriers are rapidly growing
against the renewable energy sector in Sri Lanka.
Our well qualified technical professionals have become increasingly
adapt in recent years in driving the best available result from
uncertain circumstances. Our Chairman, Dhammika Perera’s guidance of “We
should never lose sight of the fundamentals”, makes us not to see any
barriers, but only hurdles. That is the core value of Vallibel Power and
the philosophy I believe which takes us to success.
Q: How do you plan to achieve the
future growth aspirations of the company?
A: During the past years,
we have grown up to a state that we can do work with confidence in the
renewable energy industry and spread our operation globally. Now, we are
negotiating with parties to develop hydro power projects in Nepal and
the African region. This will bring international recognition to
Vallibel and to our mother land, while bringing in foreign currencies to
Q: What do you think about the mini
hydro and other renewable energy industry in Sri Lanka?
A: Looking at the overall
renewable energy industry, I must say that this is one of the best
industries which have developed professionals for nearly two decades.
This is an area where engineers can get their hands on experience.
Almost all the projects commissioned in Sri Lanka are designed,
constructed and managed by Sri Lankans. Technology wise, they are no
second to the plants running in Europe or any other developed countries.
But as a nation, there is a lot to explore in renewable energy in the
country. Even though we have estimated 5000 MW of wind power potential,
our infrastructure has not developed to the adequate level to absorb it.
Starting to work on research projects such as solar, will definitely
clear the paths.
Q: What do you think are the
challenges Sri Lanka’s hydro power industry faces to achieve its
A: Normally, the cost of
turbines, generators and penstocks alone, are 50% of the project cost in
case of direct imports.
Depreciation of the Rupee has increased the direct cost by 15~ 20%
and when taking account of the interest rates and the lack of attractive
projects, investors will lose interest in this sector.
To develop these projects, in such a difficult environment, industry
should be given attractive incentive schemes and more assistance from
relevant authorities’ in obtaining the necessary statutory approvals.
Q: What are the global trends in the
industry, and how will this impact be on the local industry?
Globally, the wind industry is growing at 30% and annually have
created employment for more than 400,000 people.
The world installed capacity is around 120 GW and even if we take
account of 0.5 % of the market share of annual incremental demand; it is
around 200 MW of machinery supplying market. So there is plenty of
opportunities available for the local manufacturing industries in the
Q: What could be the supportive role
played by the relevant statutory agencies?
A:To successfully complete
one project, we have to undergo very strict approval processes from
governing institutions and in most cases, we have to appreciate in good
faith the effective support extended by institutions such as the Ceylon
Electricity Board, Sustainable Energy Authority, Board of Investment and
also the local communities.