Abstract:
The objective ofthis study is to analyse potential technology possibility under the CDM in power
generation sector. This study is a theoretical study focused on the survey ofthe current state ofthe art
ofCDM and related issues. The climate and energy policy, the energy market and the status of energy
technology in Sri Lanka. The results show that the potential ofCDM opportunities in thermal power
sector of Sri Lanka, and ten methodological areas are recommended as areas of potential CDM
projects origins.
In order to further investigate the opportunities for implementation ofCDM in thermal power sector in
Sri Lanka and to identify the potential problems, two case studies were conducted. First case study is
the construction and operation of 600 MW super critical coal fired grid power plant (CoP: 0.065
USD/kWh). Electricity generated by the project activity will supply to Sri Lanka national grid
replacing sub-critical coal power plant what would have been implemented in the absence ofthe
project activity since sub-critical coal power plant (CoP: 0.063 USD/kWh) is more economically
attractive than the project activity. The emission reduction ofthe first case study is 160,000
tC02/annum. There are some barriers associated with installation ofsuper-critical coal power plants
such as investment barriers (high investment compared to the investment what would have been made
to a sub-critical coal power plant), prevailing practice barriers (the project activity is the first supercritical coal power plant in Sri Lanka, there are no super-critical coal power plants implemented at the
time ofthe investment decision) and technological barriers (there are no super-critical coal power
plants in Sri Lanka which leads to have lack ofskilled labour). Second case study is the construction
and operation of new natural gas fired power plant (CoP: 0.263 USD/kWh). Electricity generated by
the project activity will supply to Sri Lanka national grid replacing sub-critical coal power plant what
would have been implemented in the absence ofthe project activity since sub-critical coal power plant
(CoP: 0.063 USD/kWh) is more economically attractive than the project activity. The emission
reduction ofthe first case study is 82,200 tC02/annuam. There are some barriers associated with
installation of natural gas based power plants such as investment barriers (high investment compared
to the investment what would have been made to a sub-critical coal power plant), prevailing practice
barriers (the project activity is only one natural gas project in Sri Lanka, which has been developed by
the government) and technological barriers (natural gas based power plants are not common in Sri
Lanka, which leads to have lack ofskilled labour, further there is no proper natural gas pipe line
constructed in the country to distribute the natural gas). However there are some barriers to be resolved
in order to achieve the CDM status.
IV
It is concluded that Sri Lanka not only can achieve credits to earn some extra revenue, but also can
maintain its leading position in international cooperation and competence on the climate change issues,
moreover, Sri Lankan expert can involve in international climate change process. Further, the CDM
projects can help Sri Lanka to realize sustainable development, while reducing its GHGs emissions,
which could be a great contribution in addressing climate change.