There are two factors emerging that could postpone taking action regarding the growing energy problem. One is the recent evidence that electricity consumption has declined and the other is the sudden fall in international oil prices. Both of these are misleading signals.
Electricity consumption has temporarily fallen perhaps owing to the slowdown in industrial production consequent to the deceleration in industrial exports. Once we hopefully recover from this depressed condition one would expect electricity consumption to continue its rising trend of about 8 to 10 percent per year. In as far as the decline in oil prices is concerned it is imprudent to expect oil prices to remain at the current low levels of around US $ 50 per barrel. All indications are that the long run mismatch between oil supply and demand would once again raise prices upward. They are expected to reach around US$ 100 per barrel next year. Some predict the price to rise to even US $ 200 per barrel.
As recent events have demonstrated predicting commodity prices is hazardous. What the oil prices would be and when is uncertain. What is certain is that they would rise once again, sooner than the current price situation would warrant. There is a distinct mismatch between oil supplies and the burgeoning demand for it especially from emerging countries. The long term trend is of rising prices. Many predict that the current low prices are only a short respite before prices skyrocket. As an energy importer we must be ready to face this eventuality. Even now oil imports are a severe strain on the economy. Oil imports account for about 22 percent of total imports and absorb about one third of our export earnings. Somehow the focus is on food imports that constitute less than 10 percent of import expenditure and is less than the value of our agricultural exports. In fact tea exports alone pay for all the imports of food and beverages.
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Conservation of electricity, diesel, kerosene, gas and petrol usage is one strategy that should be used to reduce oil imports. However, such conservation has limits especially in a developing economy, where increasing domestic as well as industrial use is an inevitable phenomenon. Therefore turning to alternate forms of energy is a realistic option.
A public discussion with the participation of many energy experts at the Twentieth Annual Congress of the Post Graduate Institute of Agriculture (PGIA) of the University of Peradeniya made this very clear. Several speakers indicated the potential for a number of alternate bio fuels that are available in the country. Some of the possible bio fuels are dendro (glycaemia), sugar cane, muranga (murunga) seeds, Jatropa, paddy husk, solid waste and many other plant materials. There have been a number of organisations, NGOs and research institutions that have been exploring the prospect of using various forms of alternate energy. Individuals like Dr. Ray Wijewardena have been in the forefront in developing alternate forms of energy. The question is to what extent have all these research results fed into policy making?
If the discussions made it very clear that a vast potential of bio fuels remained to be tapped for their alternate energy generation potential, there was little indication of a clear strategy on how these bio fuels could be produced in adequate quantity.Are the researched results and information on these alternate forms of energy being fed into the formulation of the National Policy on Alternate Energy that is in the making? The National Energy Policy is due for renewal shortly and there is a pronounced policy that 10 percent of the country’s energy should be supplied from alternate energy sources. Yet this is a ballpark figure that has been stipulated without due consideration of the actual potential. However even such an approximate figure could be a starting point for alternate energy development.
It was pointed out at this PGIA seminar that the government was willing to spend millions on power plants that have only a marginal impact on the energy situation, whereas much more economic sources are not exploited. Are these researchers crying in the wilderness while energy policies are being formulated by others without any input from them? On the other hand, the research findings lack a follow up to asses the extent to which these alternate forms are feasible in providing a significant degree of energy. There are inadequate studies and information on the costs of production of the various forms of alternate energy.
As an eminent scientist Professor Y.D.A. Senanayake pointed out, a start should be made with the already available resources like paddy husk, while the other energy sources are explored. Prioritisation of implementation of alternate sources of energy generation is vital to make the most economic use of resources and to meet energy needs swiftly. In as much as many ideas and research findings were presented at this seminar, as well as previous such conferences, there was little discussion of the modes of such energy production and the costs and constraints of such energy generation. This is an important area of investigation for policy formulation.
What are the constraints to alternate energy production? One of the key constraints is the non availability of land for the cultivation of bio fuels. There is a government policy that land cultivated with food crops would not be converted for bio fuels. Such a broad principle may not be justifiable on the basis of rational economic policy nor even from the point of view of food security. However we could accept this government policy and still work within the framework of such a limitation. As several participants at this forum indicated, their application for land for cultivation of energy generating crops had fallen on deaf ears. The resolution of the problem of releasing government owned land for the cultivation of crops for alternate energy would be an important factor in the success of an alternate energy programme. The issue of private participation must be resolved as there is little prospect of increasing alternate energy crops without private enterprise participation on a relatively large scale. There would also be a need to develop mechanisms by which already available natural resources are gathered and mobilised for energy generation. This is no easy task as the materials are dispersed, in relatively small quantities and transport costs could be prohibitive.
There is little doubt that alternate energy sources must be developed to reduce our dependence on oil imports. Yet there is no proper studied policy and mechanisms in place to achieve such an objective. |
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