The Auditor General’s Department in a Performance Audit Report has raised concerns on the failure to achieve the country’s expected renewable energy generation targets and the delay in approving the renewable energy projects in the pipeline.
The report, undersigned by Auditor General W. P. C. Wickramaratne and issued last week, notes that, the new renewable energy (renewable energy sources except that of large scale hydro power plants) generation accounted for only 12 per cent of the total energy supply in 2020, though plans had been made to reach 18.4 percent. Seven percent out of that 12 percent was from small hydropower plants and the rest was from solar and wind energy.
“The guidelines introduced for the development of new renewable energy projects involve a very complex process. It should be a simpler and more effective method. The existing process has become a laborious and time consuming process as investors are unable to obtain the necessary approvals and licenses. Developers must obtain approval from 10 relevant line agencies to obtain a Generation License. At the time of issuing the energy license, the project developer has to renew the approvals obtained from the Central Environmental Authority, the Forest Department and the Wildlife Department due to expiration. Therefore, it is observed that a developer has to spend 2 to 5 years to obtain a generation licence,” the Report highlighted.
The Report stressed the importance of turning to renewable energy sources to face emergency power cuts and a foreign exchange crisis. “Sri Lanka has high wind and solar power capacity due to its geographical location and current utilization is relatively very low,” the Report observed.
“It was observed that it will take about two years from the awarding of the contract for a renewable energy power plant to connect to the national grid. The expected target for the development of wind power plants by the year 2022 is 268 MW. The 425 MW solar power projects had been developed in Sri Lanka by the end of 2020 and the targeted development for 2022 and 2030 is 1,039 MW and 2,684 MW respectively. It was observed that achieving the renewable energy development goals was doubtful because at the beginning of 2020, there were only 46 energy licensed projects (91 MW), 33 tentatively approved projects (69 MW) and only one project (10 MW) that has not yet been awarded a contract,” the Report analysed.
The Auditor General’s Department has recommended setting up a coordinating mechanism to avoid delays in obtaining approvals for energy projects. It has also pointed out that the long-term generation plan of the country must comply with the National Energy Policy and international conventions.
“It may be important to pay more attention to renewable energy in the process of reviving the economy in the face of the foreign exchange problem and the COVID-19 pandemic. Further, it is also advisable to store solar energy and use it at peak times through the introduction of solar cells technology. Action should also be taken to minimize social protests and environmental impacts arising from the construction of sustainable energy infrastructure projects through the implementation of Corporate Social Responsibility (CSR) projects,” the Auditor General’s Report observed.
“Under the competitive bidding system, only 13 solar power projects of 1 MW each had been added to the national grid from 2017 to the end of 2019. It was observed that only 269 MW of capacity were connected to the main grid under the “Soorya Bala Sangramaya” Programme. There is also a risk of having to pay the interest due to delays in payments for electricity purchased from renewable energy suppliers,” the Report stated.
“Although it was aimed to generate 1,000 MW capacities by 1million rooftops by 2025, only 24,696 customers had connected 269 MW to the national grid as at 2020. It was observed that the failure to identify the targets to be achieved annually had also been a barrier in achieving those targets,” the Report added.
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