Abstract:
Sri Lanka has had a hydropower dominated electricity generation for many years with relatively
high rainfall mainly in the central hilly region. This factor has led to a greater dependence on
hydropower for its power generation. However, at the same time, Sri Lanka is heavily dependent
on imported fuel and for energy security it is imperative that we take steps to harness the renewable
energy sources. The government is trying to respond to the energy supply issue by relying heavily
on fossil fuel based electrical power, which may not be the correct energy option for Sri Lanka.
Therefore, the large scale fossil based power plants are not environmentally friendly in comparison
to other energy options. This will result in a gradual increase in greenhouse gas (GHG) and other
environmental emissions in the power sector and, hence, there has been a lot of opposition from
the people, especially environmentalists, civil society and residents in the locations where fossil
based plants have been planned.
The main intention of this study is to form an internationally consistent view to answer the
question as to whether and to what extent the adoption of renewable based combustion
technologies in projects could be economic and sustainable in, place of the nonrenewable based
combustion dominant projects. The study will consider the appropriateness of existing
perspectives and policy imperatives in the above regard also. Special emphasis will be given for
the local environmental protection, mitigation of climate change, legislation and quality of service
in a context of global competition.
It is a fact as well as the general perception that adoption of renewable energy technology based
projects and the Clean Development Mechanism (CDM) created under the Kyoto Protocol, are
directly linked. The Clean Development Mechanism (CDM) act as a bridge to link the
industrialized countries and developing countries. The CDM intends to assist developing countries
achieve sustainable development by providing incentives for industrialized countries to invest
cost-efficient GHG reduction projects in these countries. The developed countries can receive
some credits by investing and implementing GHG emission reduction projects in the developing
countries, then use the credits to fulfil their legally binding quantitative obligations laid down in
the Kyoto Protocol. Although the Clean Development Mechanism (CDM) does not have an
explicit technology transfer mandate, it may contribute to technology transfer by financing
emission reduction projects using technologies currently not available in the host countries.
The study presented in this thesis first analyse the potential technology possibility under the CDM
in power generation. This study is a theoretical study focused on the survey of the current state of
art of CDM and related issues. The results show that the potential of CDM opportunities in mini
hydro, biomass including dendro power and wind energy , which can be identified as the leading,
sustainable, non-conventional forms of renewable energy promoted in Sri Lanka for electricity
generation to feed into the thermal grid. Also the main intention of this study is to investigate the
technological and regulatory interventions on overall power sector emissions and economic and
environmental benefits of such interventions.
Based on the analysis it was found that present annual CO2 emission with respect to the thermal
power electric generations in Sri Lanka is about 0.75 Million Metric Tons and Wind, mini-hydro
and bio mass will be very attractive with CDM funding. Out of the selected CDM options, the
Mini Hydro plant that Sri Lanka need to choose is particularly important. Considering that this is
the option giving the highest carbon reduction within the planning horizon while having the
highest profit. But when considering the local energy tariff structure, the tariff is highest for
Biomass.