Energy, Economy and Environment for future Energy Security and Sustainability

The fear of reaching the 1.5°C global warming limit before the decade ends is now a probable reality. The inevitable linkages and the impossibility of pursuing the issues of energy, economy and environment as separate actions and will inevitably impact on the sustainability.
It is also evident that dependence on fossil fuels for energy, is one of the main contributors to the current spike in carbon emissions, globally. Especially, in Sri Lanka, heavy reliance on imported fossil fuels has significantly harmed the economy, increased energy costs, and added pressure to the balance of payments. Fortunately, Sri Lanka possesses abundant renewable resources that can facilitate the transition to Future Energy Security and Sustainability while also driving economic growth and environmental enhancement.

The world is expected to be firmly on track for achieving the goal of net zero emission (NZE) by 2050 by first achieving the desired target of global warming is limited to the elusive 1.5 O C. However, it has been predicted that this critical milestone would be reached very shortly with the existing emission rates. The energy sector, particularly the use of fossil fuels for power generation as well as for transport, on land, sea and air, is well understood as one of the main culprits.

Despite the current challenges, there is a prevailing sense of hope that the Net Zero Emissions goal can still be achieved, even if not by the 2050 target. While the linkage between energy and climate change is well known, it is obvious that the three issues of Energy, Economy and Environment are so closely linked. Thus, any policies and/or strategies on anyone alone are ineffective unless all three sectors achieve positive results.

The Sri Lankan Energy Sector Scenario

Unfortunately for Sri Lanka, the degree of control or influence that individual citizens or even civil society can impose on any of these issues is minimal. A particular concern is the lack of understanding of the interrelationship between these three pillars by the decision-makers. Implementation of economic activities without a proper understanding may impact on the citizens as well as the Country’s commitments towards achieving the global goals. Mostly, the officials who are concerned about environmental-related issues are not connected with the officials who are working in the economic and energy sectors.

This unfortunate situation is exacerbated by the limited understanding among everyday citizens regarding these consequences. They are often kept in the dark due to the spread of misinformation, misinterpretations, and deliberate misdirection by officials and politicians. However, it’s essential to recognize that consumers are the primary stakeholders who will either bear the brunt or reap the benefits of these decisions. Therefore, it is imperative to engage ordinary citizens, providing them with a thorough understanding and awareness of the issues at hand. The public media also shares responsibility for failing in their duty to promote this awareness.

Historically, the Sri Lankan energy supply, except the transport energy has been served by renewable hydro for power generation and largely by biomass for the thermal energy needs.

In 2021 and 2022, Sri Lanka faced significant disruptions in its energy sector, marking a period of unprecedented challenges. This turmoil was characterized by extensive fuel queues stretching for miles and prolonged power outages lasting several hours. However, there was a silver lining amidst these difficulties, as the energy sector authorities finally acknowledged the value of indigenous renewable energy sources for power generation. They recognized that such sources offer a more cost-effective solution compared to any fossil fuel-based power generation methods.

This situation underscored the undeniable fact that Sri Lanka has become ensnared in a problematic cycle of heavy reliance on imported fossil fuels. A truth that is now recognized worldwide. This is best illustrated by the chart below (Figure 3).

The degree of such dependence is evident from the data pertaining to the times of grave disruption during early 2022.

The Abyss Facing Us Every Year During the Dry Months

Table 1:  The Past Mistake of diverting oil for power generation

Month	Elec Gen using oil GWh	% of Total Generation	Approximate Oil Consumption Liters for power Gen*	Total Petroleum Imports /Month Value in Million USD	Cost of fuel imports for electricity
January	448	33.44%	125,496,280	430.3	106.6
February	359	29.23%	100,412,200	450	85.35
March	468	34.51%	130,903,920	Not available	111.27
April	280	24.58%	78,314,600	700	66.57
May	153	12.38%	42,891,800	Not available	36.46

History repeating itself this year too, with large scale use of oil for power generation, which has resulted in the energy mix with the dependence on fossil fuels exceeding 65% in March/April 2023.

The power cuts have been averted in 2023 ignoring the massive cost incurred by increased oil based power generation. Obviously, the CEB cannot fund even the rupee equivalent of the Dollars needed, given that they are in deficit of payments to the local renewable power producers over 12 months totaling to some Rs. 40 billion. It is reported that the CEB will be losing Rs. 285 billion for the year 2022. What’s even more concerning is that there has been a noticeable decline in electricity demand this year. This drop in demand is reportedly attributed to the tariff increases mentioned earlier.

As a result, Sri Lanka appears to be on a downward trajectory in terms of its annual energy consumption per capita, a key indicator of a country’s level of development. This indicator is projected to decrease further from its current level of 515 kWh per capita. The data emphasizes the importance of the electricity sector as the preferred energy source, provided it is both accessible at affordable prices and generated from the country’s own renewable resources.

This will clearly usher in the paradigm shift of considering the supply of energy not only as the prerequisite to promote GDP growth via other sectors to the reality of the great impact where the Energy Services and Supply Industry can by itself be the driver of the economic growth.

The Major Contributor to Emissions – The Transport Sector

It is clear that the transport sector, which heavily relies on imported fossil fuels, is the root cause of both economic challenges and environmental deterioration. Therefore, our goal should be to transition to an energy sector predominantly fueled by electricity generated from renewable resources. Sri Lanka is fortunate in that this goal is achievable. Recent data on the comparative costs of power generation, considering the three major contributors up to 2023, has revealed promising insights.

Table 2: Current Comparison of sources and costs for electricity [2]

Source	Energy GWh	Cost Rs Millions
NCRE (Mini Hydro, Wind Solar)	3.2	60.6
Major Hydro	4500	16,000
Oil	4243	317,000
Coal	4400	228,000

Therefore, the linkage between the energy and economy is quite clear based on the trends seen recently, which have made for Sri Lanka

1. The use of renewable energy sources the most economical option for power generation
2. Grave impact on balance of payments compounding the problem
3. Lack of foreign exchange causes shortages or pressure to pursue less than optimal sources for fossil fuels and for Sri Lanka the incumbent avenues for corrupt deals

The Case for Electrification of Transport

There is no accepted transport policy in Sri Lanka. However, the National Energy Policy gazette in Aug 2019, proposes that

• by 2023 25% of Private vehicles shall be electrically driven
• CEB to set up 25 EV charging Stations ^[6]

Fortunately, though the above targets are forgotten by us, the rapid development of the EVs which is being embraced all over the world. The concurrent development of RE sources for electricity, particularly the roof top solar which can be used as the means of generating adequate electricity for charging the EVs of most users, added to the fact that the fundamental efficiency differential is staring in the face of any one with the lowest level of intelligence. This is illustrated below (Figure 8).

It is seen that the ultimate efficiency of a conventional fueled vehicle is only 14%. The balance 86% paid for in Dollars is wasted. In contrast an EV can perform at over 85% efficiency using RE based electricity which is free if generated by the user himself using Roof Top Solar. The initial capital cost of such installation could be a year or two depending on the amount of travel.

Energy and Environment and Impact on Economy

While there is clear understanding of the linkage between Energy and Economy the most important aspect of the Environment, which is inexorably linked to both Energy and Economy  is not recognized. Unfortunately, the impact of the deterioration of the environment is a slow process and not readily understood and therefore the general public are not aware or concerned about this slow killer.

 Sri Lanka has signed and ratified many international treaties such as the Paris Accord and the Sustainable Development goals, although cohesive plan or strategies to meet such commitments by all concerned agencies, is still lacking.

The most prominent parameter presently receiving the attention worldwide is the Global Warming, quantified mainly by the Carbon Emission. Sri Lanka which boasted of being a low carbon emitting country with a per capital emission of 0.78 tons in 2010 has allowed it to deteriorate to the present level of 1.02 tons  in 2020. While this still being a very low value in comparison to that of the developed nations or even the world average of 10.3 Tons per capita in 2010, the impact of the deterioration of the environment not limited to the carbon emissions, and the heavy negative impact on the economy, both short term and long term cannot be ignored.

In Sri Lanka’s case, the greatest cause for carbon emissions is the uncontrolled use of fossil fuels, mainly for transport and power generation. This has taken center stage during the past few years with dire impacts on the society as well as all the sectors of the economy.

The latest Nationally Determined Commitments on reducing carbon emissions submitted to the UNFCCC, declares an intention of reducing only 25% of such heightened emissions by this sector (14.5 % overall national Emissions). The fact that of this commitment, only 5% reduction is committed unconditionally, underscores the total lack of understanding in appreciation of the linkage between the environment and the economy. The potential for Sri Lanka to make this change up to the full committed target, using its own resources and the vast economic and social gains such an effort could engender is undeniable.

The commitments made in respect of the largest contributor to the emissions Viz: the transport sector is even worse as shown below.

The underlying reality is the lack of appreciation of the close linkage among these three segments of Energy (including transport) Economy and Environment. Sri Lanka continues to be dealing with these interconnected national issues by separate agencies who don’t have the ability to recognize and abide by and take advantage of such relationships for the success of their own endeavors and leading to much value to the nation. 

Regrettably, the individuals entrusted with the responsibility of governing the nation often lack the understanding or, the motivation to offer the necessary guidance and direction.

Conclusion

The undeniable connection between Energy, Economy, and Environment cannot be ignored. Delayed reactions to energy choices, environmental impact, exemplified by global temperature rise exceeding 1.5°C sooner than expected, are already occurring worldwide. In Sri Lanka, the link between energy and the economy has been well-documented but ignored due to vested interests and the desire to maintain the status quo. Neglecting this connection poses a greater danger, harming both the environment and the economy. Despite warnings from experts, current policies contradict those in authority’s claims.