First BIMSTEC Energy Ministers’ Conference
4th October 2005, New Delhi
Speech of H.E. C.R. J ayasinghe
High Commissioner-Designate to New Delhi, Sri Lanka


Your Excellencies, the Ministers of Energy of Bhutan, Myanmar, Nepal and Thailand,

Secretary, Ministry of Energy of Bangladesh,

Excellencies,

Distinguished delegates,

Ladies and gentlemen,

I speak on behalf of and in place of the Hon. Susil Premajayantha, Minister of Power & Energy of Sri Lanka, who was earlier looking forward to heading the delegation to the first Energy Ministers’ Conference of BIMSTEC.

‘However, subsequent to the dates for this meeting being identified, Presidential Elections were notified in Sri Lanka with October 7th being fixed as the date for nominations. The Hon. Premajayantha therefore regrets that his political commitments require his presence in Colombo at this time. Nevertheless, he sends the Conference his best wishes.

Mr. Chairman, my delegation joins the others who have spoken earlier in expressing our sincere congratulations on your well-deserved election to preside over and steer our proceedings. Our delegation also expresses its appreciation for the excellent arrangements made for the meeting, and the gracious and warm hospitality extended to the participants.

Mr. Chairman, we are all aware that this meeting stems from the mandate given at the Summit in Thailand in July, 2004, for vigorous and accelerated cooperation among the member countries in the field of energy. Four specific sub sectors in this regard were identified by the Summit, namely the development of new hydrocarbon and hydropower projects, the interconnection of electricity and natural gas grids, energy conservation and renewable energy technologies. With your permission, Mr. Chairman, I shall briefly dwell on the energy profile of my country, in order to illustrate how Sri Lanka could participate in each of the four sub-sectors under the energy domain.

Sri Lanka does not have the natural resource of fossil fuels. In the early stages of her post-independence development, Sri Lanka was able to rely largely on hydro power, but this resource has today been exploited to virtually its full potential. Accordingly, 65% of the current total peak demand of around 1,700 mega watts of electricity is met by thermal plants run on imported fuel, with the balance from hydro power. With the current surging oil prices, Sri Lanka faces increasing difficulties in supplying power that successfully meets the demand, while also being affordably priced for both household and industrial users.

Moreover, during the last 1 Y2 decades, the country’s energy requirement has continued to grow by around 8 %-9% per annum, in keeping with an expansion ofGDPby around 5%-6% each year. With the planned progressive expansion of rural electrification, which currently meets the demands of less than 2/3rd of village households and industries, it is expected that over the next 2 to 3 decades, the rate of growth in demand would if at all, only expand.

As a response to this situation, the Government of Sri Lanka has embarked on a 3 pronged strategy. Firstly, with there being no further significant hydro resources to be tapped, the Government has taken a policy decision to set up a series of large base load thermal power plants with low generation costs. Accordingly, the Ceylon Electricity Board (or CEB), which is the state owned utility supplying power, will participate in an appropriate manner along with foreign collaboration, in the establishment of coal powered plants that use the latest available environmental technologies. One of them has in fact to come on-stream in the immediate future, to enable the CEB to meet the increase in demand without a shortfall of supply.

The second approach of the Government has been to actively explore the tapping of non-conventional and renewable sources of energy, while also encouraging strengthened energy conservation. Sri Lanka sees mini-hydo power plants as an environmentally friendly means which allows the country to exploit to the maximum this most economical of energy resources. At present, there are mini hydro power plants with a capacity of 76 mega watts connected to the national grid, while letters of intent have been issued for the development of a further 350 mega watts.

Furthermore, our country is believed to have substantial potential for wind¬generated energy. While there is an estimated substantial potential of around 2,500 mega watts, both in-shore and off-shore, the capital costs are heavy. A less expensive source would be dendro thermal energy and the Government has announced that the fuel wood gliricidia would henceforth have the status of the fourth national plantation crop. Unutilized marginal lands in dry and semi-dry areas and mono-crop lands such as coconut would be cultivated with this crop without causing any threat to the natural forest cover. The cultivation of gliricidia will be an innovative venture that not only meets energy needs, but also generates incomes.

Parallel to looking for alternative energy sources, we have established a guarantee fund as a collateral substitute for the financing of energy efficiency projects within the country. The 12 private sector energy service companies operating in Sri Lanka are our partners in this endeavour.

The third aspect of the strategy is the manifest readiness of the Government of Sri Lanka and the CEB to engage in regional consultations with a view to exploring the possibility of importing electricity from the Bay of Bengal region, as well as of participating as a predictable consumer in any future trans-BIMSTEC gas pipeline. With regard to the import of electricity, it is pertinent to note that our consumption peaks fall during the late evening and the early hours of nightfall. This is a natural phenomenon in a country such as Sri Lanka where the predominant sectors of the economy are service oriented or agricultural. Theref9re, our country could once a regional grid is in operation, draw for its additional requirements for the night peak from the spare capacities of neighbouring countries, thereby adding to the cost effectiveness of the entire venture. We recognize that an indispensable aspect of establishing a regional grid would be the development of a regulatory financial and commercial framework which would apply in common to all the member countries. We therefore endorse the concept of discussions on such a framework commencing at the earliest possible.

¬As concerns the trans-BIMSTEC gas pipeline project, we value the decision of the Committee of Experts in Yangon last January, to request Thailand to extend its study on the feasibility to cover all the participants in BIMSTEC. We believe that once the pipeline extends to South India, a spur line to Sri Lanka could thereafter be installed. Sri Lanka has studied under a US Aid Programme in 2003 the feasibility of natural gas as a fuel option. The outcome of the study clearly endorsed the viability of such an approach. We are also committed to the development of new hydrocarbon projects in association wherever possible, with our BIMSTEC neighbouring countries.

Mr. Chairman, while any future interconnectivity of grids or gas-pipeline would establish Sri Lanka as a predictable consumer, we also look to supplying and sharing our experiences in the field of alternative energy sources and energy conservation. In fact, we would like to go further in this regard by strengthening the institutional linkages for joint R & D activities to develop cost effective technologies. We agree that the establishment of a BIMSTEC Centre for Energy to attain these objectives, is a goal which all Members should jointly work for.

Mr. Chairman, Excellencies, this meeting in Delhi takes place at a crucial time when the cost of fuel is reaching globally astronomical levels. The unprecedented surge in prices will have an impact on national development and on those who are most vulnerable in our societies. There is even speculation that at some point in the future, rivalry for access to energy may become a cause for tension amongst the global community. In this context, our Conference which endeavours to forge a cooperative regional approach to meeting the challenge of energy, while also encouraging the development of new technologies to lessen the dependence on fossil fuels, is a most welcome development. Sri Lanka accordingly appreciates the initiative taken by the Government of India in association with the other Member States to convene this Conference and to commence a process of active collaboration. We look forward to playing a committed and active role in this important endeavour, which has as its noble goal the tangible improvement of the living standards of all the peoples, of the Bay of Bengal Initiative countries.

 

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