Clean energy technology and regulatory interventions for Greenhouse Gas emission mitigation: Sri Lankan power sector

Abstract

This paper presents the impact of technological and regulatory interventions, specifically the impact of the Renewable Energy Portfolio Standards (RPS) on the least-cost electricity generation expansion plan in a country. The case study used in the paper is the power generation system in Sri Lanka where the current policy is to have a renewable energy based generation penetration level of 10% by 2015. This study considers available renewable technologies as supply-side options together with their technical potential and economic feasibility. It also examines the impact of these interventions on overall power sector emissions including Greenhouse Gas (GHG) emissions. It has been found that the 10% RPS target by 2015 can be achieved with an additional cost burden of only 1.3% of the total cost of the plan. The results also show that small hydropower is the best non-conventional renewable energy technology needing minimum financial incentives in achieving the target. Fuelwood-fired thermal power and wind power require significant level of government incentives if they are to play a role in the declared RPS of Sri Lanka. It is concluded that small power systems like the one in Sri Lanka can still contribute to emission mitigation with regulatory interventions such as RPS without significant additional costs. It is important to select the appropriate technologies, decide on their individual allocations and the optimal timing and level of penetration of these technologies to minimize the economic impact. Further, internalizing the use of these technologies in the planning process strengthens the hands of the planners in justifying their contributions to supplying demand while mitigating emissions.