1. Presented by G. K. C. Opathella
ANALYSES OF SELECTED ENERGY POLICY OPTIONS TO IMPROVE ENERGY SECURITY: THE CASE OF SRI LANKA
Presented by
G. K. C. Opathella
Thesis Committee: Prof. Ram M. Shrestha (Chairperson)
Prof. S. Kumar (Member)
Dr. N. Mithulananthan (Member)
14th May 2008

2. Outline Background Objectives and Methodology
What can be expected in future energy system?
Conclusions

3. Background-Why Energy Security?
Source: Energy Conservation Fund, 2005
Share of petroleum is increasing (43% in 2005)
Only three main primary energy sources for many years
Few feasible hydro power projects to be developed
Petroleum bill was 1.2 billion US$ (6% of GDP) in and 2.5 billion in 2007 (7.7% of GDP)
Expected average economic growth rate is 7.4% annually

4. Branches of Energy Security
Primary Energy Demand
Energy Import Dependency
Source Diversification
Supplier Diversification
Economic Vulnerability

5. Objectives Overall Objective
Finding policy solutions to improve long term energy security
Specific Objectives
Developing a long term energy planning model for Sri Lanka
Identifying the effects of energy supply reduction targets
Analyzing the performance of renewable portfolio standard policy in order to improve long term energy security
Analyzing the effects of carbon tax policy for the improvement of energy security

6. How can we approach? (Methodology)
Overall Methodology
Reference Energy System
Reduction Targets and Policies
Energy Security Indices

7. Primary Energy Demand

8. What can we expect in future?
Without any policy intervention, Sri Lanka is highly dependent on energy imports. But correct policies can create considerable difference
Diversification of energy sources can be further Improved with correct policies such as renewable portfolio standard

9. What can we expect in future?
Diversification of energy suppliers would improve in future and appropriate policies can help to improve it further
A drop of economic vulnerability is expected. Import reduction targets and RPS policy would reduce it further

10. Conclusions
Total primary energy reduction targets fail to improve all aspects of energy security except overall energy intensity and per capita consumption
Having 80% of energy import reduction target (discussed in EI80), it is possible to improve all the aspects of energy security with 9% increase of total system cost
Case, RPS25 shows the best performance compared to base case and all RPS cases
Energy import dependency and vulnerability aspects are improved due to carbon tax. But higher tax levels (higher than level mentioned in CT(60-120)) would not add any extra benefits in terms of energy security.
Doubling the biomass consumption both in industry and electricity generation sectors is recommended in order to achieve 80% energy import reduction target.
Apart from the biomass, more than 5% of total primary energy should be supplied by wind electricity generation by 2025 in order to achieve better energy security

11. Thank You

12. Reference Energy System Sri Lanka

13. Target and Policy Cases

14. Overall Methodology Long term energy planning model
Model with renewable portfolio standard policy
Model with energy supply reduction targets
Scenario results
Special changes
Run the model
Energy security indices
Estimations
Comparison of energy security improvements
Energy and economic data
Model formulation
Model with carbon tax policy
Conclusions and recommendations for the improvement energy security and further research opportunities
Results of the sensitivity analysis
Forecasted demand data

15. Indices Net Energy Import Ratio (NIER) NIER = Net Energy Imports
Domestic Supply + Net Energy Imports
Diversity Index (Shannon-Wienier Index)
Where; Si is the share of primary energy of sources i
Diversification of Primary Energy Demand (DoPED)
Vulnerability = Expenditure on energy import
Total GDP
Herfindhal Hirschman Index (HHI)
Where; K is the share of primary energy of supplier i
Energy Intensity(EI), Per capita primary energy consumption(PCPEC), Per capita final energy consumption(PCFEC), Per capita emission (PCE) form energy and demand sectors

16. Results Energy Security in 2035 85 92 62 80 52 1.36 1.19 1.41 1.43
Without Any Policy
Primary energy demand reduction target
Energy import reduction target
Renewable portfolio standard
Carbon tax
Dependency (%) 85 92 62 80 52
Source Diversification (SWI)
1.36
1.19
1.41
1.43
Supplier Diversification (HHI)
4067
4799
4094
3885
4193
Vulnerability (%)
4.5
5.1
4.3
4.1

17. Results of Total Primary Energy Reduction Target Cases
Under higher reduction targets petroleum consumption is increased. Coal and biomass consumptions are decreased. This is due to high efficiency of petroleum consuming technologies compared to other technologies.
Percentage Change in Total Undiscounted Cost
TPEC95 1
TPEC90 2
TPEC85 4
TPEC80 10

18. Results of Energy Import Reduction Target Cases
Under the energy import reduction targets biomass wind energy supplies are increased. Coal consumption is decreased. Coal is the most inefficient importing energy. Therefore, it drops compared to the base case
Percentage Change in Total Undiscounted Cost
EI90 7
EI80 9
EI70 11
EI60 13

19. Results of RPS Cases
More wind and biomass power generations are expected under the RPS policy. Demand for coal is decreased. Due to the promotion of renewable energy coal based electricity generation is partly switched to renewable based electricity generation
Percentage Change in Total Undiscounted Cost
RPS10 1
RPS15 3
RPS20 5
RPS25 7

20. Results of Carbon Tax Cases
Coal has the highest emission factor. Therefore, under the carbon tax policy coal consumption is decreased. Both biomass and wind energy supplies are increased. In higher tax cases biomass supply would reach to maximum level at the end of the planning period
Percentage Change in Total Undiscounted Cost
CT(20-40) 10
CT(40-80) 18
CT(60-120) 25
CT(80-160) 31