Annual General Meeting – 2007
The President’s Report – 2007
The BEASL continues its efforts to promote the utilization of the ample sources of biomass in Sri Lanka , which needs to be viewed as a bounty of nature to our country. In this respect although our association is named as the Bio Energy Association of Sri Lanka our vision is wider, with the motto of Fuel Fodder and Fertility from Bio Mass. In fact it has become apparent that the aspects of Fodder and Fertilizer potential of the chosen species, primarily Gliricidia sepium is of even greater economic and social benefit than the fuel component. It has also been realized that the realization of these two benefits will have the salutary effect of promoting the growing of the SRC species targeted by us thus automatically creating the fuel wood resource which we have been striving for and the lack of which has hindered the development of the bio energy sector. As such the activities of the association during the past year has also covered these two areas as well.
Highlights of the Year
Considering the past 12 months since the last AGM some significant advances have been achieved , which augur well for the future of bio energy. We are justifiably proud of our contributions which led to these advances.
Advances
Announcement of the technology based Tariff Structure
After much discussions and negotiations which in fact were commenced several years ago a technology based tariff structure has been announced by the Ministry of Power and Energy for the purchase of power by the national grid form renewable energy resources. The tariff announced however is limited to projects using biomass. Mini hydro and Wind resources. The biomass for the purposes of this tariff structure has been defined as sustainably grown fuel wood only. The tariff applicable for other sources such as agricultural residues and municipal waste and waste heat is to be announced later. Our recommendation that it is not practical nor desirable to make such differentiation, considering the very limited amounts of such resources available in the country has not been addressed yet. However, in spite of these short comings we welcome this initiative and it is hoped that the promised action to revise the tariff to remove some anomalies such as the incorrect parity rate, unrealistic interest rate etc., used in the calculation of the published tariff will be forth coming shortly. This revised tariff will be an attractive incentive for the bio mass sector to take off in the current year.
A tariff structure has been proposed for the use of agricultural waste which is being contested by the BEASL with the request that our original proposal for a common tariff for all bio mass be agreed upon. We have made representations in this regard to the Minister of Power and Energy and Minister of Petroleum Resources, both of whom have given us a patient hearing.
Establishment of the SEA
A high point of the year is the achievement of one of our cherished goals of having a dedicated agency for the development and promotion of renewable energy. Accordingly the formation of the Sri Lanka Sustainable Energy Authority by the act No .. of 2007 is very welcome news.
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 Energy Conservation Fund has been upgraded to the SEA with the wider powers and the previous chairman has been retained as the Chairman SEA.
It is important that the SEA appreciates its new responsibilities and the challenges and thus emerges out of the limited role paled by the ECF. The BEASL will continue its lobbying to ensure that this role is accepted and pursued by the SEA , using whatever means that are available to us.
Integrated Trial at Rathmalgara
The triple benefits of Gliricidia of fuel fodder and fertilizer has been advocated by us as being the source of substantial financial benefit to a rural farmer with even one hectare of land. In order to prove the generation of the predicted revenues from such a model, we have been fortunate that the Coconut Research Institute has undertaken a feasibility project at their Ratmalgara coconut estate for this purpose. The currently available data indicate a verification of the projected returns. An official report form the CRI on these findings will be invaluable for our future promotional activities.
Gassifier project at Gannoruwa
BEASL offered a gassifier of electrical capacity 5 kW to the Agri Park at Gannoruwa of the Department of Agriculture to serve as a demonstration unit for farmersias this is focal point where many rural farmers visit. This offer was accepted and the unit is now being installed. 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. Flowing Currents headed by Mr Lalith Seneviratne has been tested and has a much higher capacity than indicated.
Publication of a Promotional CD
A project was launched to publish a promotional CD on the growing and utilization of Gliricidia Sepium for the benefit of all stake holders. The preparation of the CD was undertaken by the Audio Visual Unit of the Department of Agriculture at Gannoruwa. Our effort has culminated in the production of a very useful and informative CD which reflects the highly professional expertise of the staff at the Audi Visual Unit. We acknowledge the assistance received fro the Coconut Cultivation Board in funding this project and the assistance given by various parties to provide the necessary information and facilities for the collection of the necessary data. The special efforts taken by Mr Piyasiri Gunasekara and Mr Poorna Senanayake, to overcome the many difficulties are much appreciated.
It is proposed to formally present this CD to the Minister of Agriculture and Minister of Science and Technology later this month at the time of handing over of the gassifier system . We will make this a media event to promote growing and utilization of Gliricidia
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. This is mainly due to the lack of a formal market and a supply chain for the fuel wood.
We are most disturbed that the state authorities still fail to react to this situation, which is of immense importance to the countryÃs economy, by some proactive measures to establish or at least facilitate the growing of the energy plantations. The many representations and discussions we have had with many state agencies have failed to create any positive results.
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 costsin their production process.
Meetings with the IPS
A detailed presentation was made to the Institute of Policy Studies on the wide ranging benefits of Bio Energy in the hope of getting the attention of the State at a high level and to create some policy intervention. While the IPS has prepared a very comprehensive report based on our presentation, their efforts to present it to the President have not being successful so far.
Interest in plantations by several groups
On a positive note several independent groups have embarked on plantations of significant sizes which is very encouraging. BEASL will provide whatever assistance possible to such groups by way of advice and technical expertise. In particular, the recent ceremony to hand over out-grower contracts to a large number of farmers in the Awissawella area by the Sonak Lanka ( Pvt) Ltd., targeting the supply of 45 tons of Gliricidia per day to the Industrial Clothing Limited Prime Polymers factory is a very significant mile stone. The efforts of the Ministry of Science and Technology through the Vidatha Centers in this effort is much appreciated.
On a different front the Swarajya Foundation is promoting the growing of small plots of Gliricidia in the urban environment in the Hendala area to address the home energy needs. They have received the support of many religious and social organizations and the success of this program will be useful to expand such programs to other areas as well.
A GEF/SGP assisted program is underway in the Thirappane area with significant community participation. The promoters of this program are seeking opportunities to venture into other areas as well.
Village level Dendro Power
The BEASL is pleased to note the significant progress made in this sector through the untiring efforts of Mr Lalith Seneviratne. Several village level dendro electricity schemes are operating successfully. The development of not only the gassifier systems locally, but overcoming the numerous organizational and social obstacles for a successful project of this nature is very commendable. I am sure that the project developers are happy to share their experiences and knowledge with other members and potential developers of similar projects. The gassifier system that is being installed at Gannoruwa by the BEASL is a similar unit.
Concerns
Walapane still not re-commissioned
The delay in re-commissioning the Dendro plant at Walapane, in spite of the announcement of the new tariff structure is a matter of concern for the BEASL as well as for the bio energy industry. It is hoped that the enhanced tariff expected to be announced shortly and the finalization of the tri-partite power purchase agreement will pave the way for a speedy re-commissioning of this plant vital to the Bio Energy industry in Sri Lanka.
No new Dendro Projects yet commenced
In spite of the enhanced tariff announced in July 2007 and the promotional work carried out by us it is a matter of concern that no new dendro power project has reached the stage of commencement of construction. The significant increase of cost of finance and the lack of any concessionary financing arrangements may be a cause. In addition, the lack of formal energy plantations is still being presented by the financial institutions as the reasons for their reluctance to fund these projects.
This has been addressed by some potential developers in the corporate sector. But, the problem of releasing adequate lands by the government has led to the loss of interest to pursue the proposed projects.
In addition, the lack of a clear approval procedure, too, leaves room for various State and Provincial institutions to withhold the approvals due to unsubstantiated and patently false reasons. The present work by the SEA to streamline the approval process is therefore of vital importance.
The problems of substation capacity not resolved
The complete lack of progress in expanding the substation capacity in the areas where a significant number of mini hydro projects are already operational such as the tea plantation districts is preventing any potential projects being initiated in these areas where a high potential exists. In fact, many mini hydro projects planned in these areas are on hold causing great loss to the country. It is understood that even the money already allocated for this purpose has not been made use of.
The value of the leaves still not adequately recognized by the government
The BEASL have been advocating the growing of Gliricidia plantations targeting the utilization of the leaves as animal feed and a replacement of imported urea fertilizer, which can generate a much higher income than by the sale of the fuel wood. However, this well proven potential is yet to be exploited. The government, which spends millions of Dollars for the import of urea and animal feed, is blind to this immense resource lying at our door steps.
The project at Ratmalgara has provided actual proof of the possible income level. BEASL will make every effort to publicize these findings.
Problem of Release of Lands
The problems and barriers faced by many developers in obtaining adequate extent of lands has emerged as the most significant road block for the development of Dendro Projects. As mentioned earlier, the Banks look for a formal and secure supply chain for the approval of funds. They are reluctant to accept the concept of 100% out grower system of supplies. As such the potential developers have been trying to obtain lands to create at lease a core plantation to reduce the risk of supply chain failure. These efforts have so far been unsuccessful due to the difficulties encountered in obtaining land.
Staff Movements
We are sorry to record the departure of our first project manager Mr Piyasiri Gunesekera form the employ of BEASL for better prospects. He still remains in the sector and has been ready to come to our assistance whenever called for. We are grateful for the immense contribution made by him during his stay and wish him well in his future carrier.
Mr Harsha Ö.. who provided vital assistance in the Bingiriya plantation project has consented to spend few days a week with the BEASL. His knowledge and experience is of value to any potential plantation projects.
There is a dire need for more staff and facilities at the office to enable a more dynamic role to be played by the BEASL in the face of many barriers that still exist. However, the present financial situation does not permit any such new recruitment.
Until we are more financially sound the voluntary efforts of the members are solicited to enable us to both formulate new projects as well as to serve the membership better.
Web Portal
The Official Web site http://www.bioenergysrilanka.org is now much improved and is updated regularly. The link http://www.bioenergysrilanka.com still exists and will be automatically transferred to the home page.
Members are encouraged to visit the web site often to keep themselves updated on the progress of BEASL and for information relating to the industry. Any comments and suggestions to further improve the web site are welcome.
Promotional Activities
In spite of the constraints of funds and personnel, we managed to perform promotional activities whenever possible. The participation in the Techno Exhibition with the support of the Ministry of Science and Technology was an important event. Some of our members contributed by exhibiting their products and services including a small gassifier unit by Flowing Currents which attracted much attention.
The Way Forward
In spite of the many difficulties and the lack of progress in certain sectors, we can be proud of the advances made during the past year. Although, the tangible results from the various efforts made by us in different aspects of the industry are yet to bear fruit, we are certain that the seed has been sown and given the slow pace of the State sector the results would start to emerge sooner or later.
The task ahead of us is to continue our efforts and not allow the momentum gained so far to wane. This requires continuing lobbying with all parties concerned and championing the cause of bio energy which we are convinced is of immense benefit to the country.
The use of fuel wood for the generation of industrial heat, replacing fossil fuels, is well recognized and the only barrier is the development of a reliable supply chain. As such, this area requires our special attention.
The possibility of enhanced prices for (the feed in) tariffs as well as carbon credits is the driving force to promote the development of larger scale dendro power generation projects. This incentive should be used to overcome the still prevailing problem of obtaining adequate lands for the energy plantations. There is no shortage of suitable lands particularly in the rural sector. The problem is to overcome the many obstacles placed by organizations and individuals due to many reasons. We need to lobby for a high-level policy initiative and intervention to get over this problem, urgently.
It is also necessary for the BEASL, as an organization, to operate at a much more productive level. For this purpose we need to generate enough funding to support the infra structure and staff with necessary expertise. This is best achieved by securing donor assistance for the different types of projects we need to embark on. While there are many potential sources of funds, a lot of work is required in preparing project proposals and follow up. The assistance of all the members in this regard will be most welcome.
It is also necessary for us to expand our membership to bring to our fold the many individuals and organizations that have recognized the importance and value of our mission. The present number of just over 50 is woefully inadequate considering the challenges ahead of us. May I request that each member takes upon himself the responsibility f recruiting at lease five new members during the coming year.
My sincere thanks are due to the Council and all other members and the staff for the assistance given to me during the past year, and any progress made is entirely due to the joint efforts of all of us. It is incumbent upon the few of us who have got together as the BEASL to continue our efforts to ensure that the bio energy resource available to us in Sri Lanka is utilized judiciously and for the benefit of all Sri Lanka in spite of the many obstacles.
Conclusion
Notable progress in the development of biomass as fuel, fodder and fertilizer has been made in Sri Lanka during last year. It is heartening to note that many private sector institutions have taken up the cultivation and use of sustainable biomass as fuel on a commercial basis. In this respect I am pleased to note that last year should be recorded as the year Sustainable Biomass production and use in Sri Lanka reached the level of ‘Critical Mass’.
Parakrama Jayasinghe
President
January 10, 2008