A Detailed analysis of CDM potential in the thermal power generation sector of SriLanka

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.