About

BACKGROUND TO THE PROJECT

Sri Lanka imports most of its energy requirement in the form of oil or coal. This accounts for 60% of electrical energy, all transportation fuel, and a minor portion of industrial and cooking fuel. About 10% of the petroleum fuels (coal, fuel oils and gas) amounting to 350,000 to 400,000 tonnes per annum, presently imported onto this country, is utilized by the industrial sector to generate process heat. Consumption level of furnace oil in 2007 was 186,210 tonnes.

Industrial thermal energy can be regarded as one of the major thrust areas for fuel switching (from fossil fuels to fuel wood or other biomass) as it offers the best economic justification. Another reason for selecting this sector is recent technological devel¬opments related to conversion technology (such as gasification, efficient boilers) and improved energy crop production (with the Government declaring the fuel wood species Gliricidia as an important plantation crop). These developments have made it possible to produce bio-energy at lower cost and with higher conversion efficiencies, which could make it competitive with other commercialized fuels. This has been confirmed during the analysis performed consultants and stakeholder consultations in the project preparatory phase.

Due to constant price escalations and the gradual withdrawal of the government subsidy for fossil fuel, fuel wood demand in industry has seen a steady increase. Even larger industries, traditionally reliant on furnace oil, diesel or LPG are planning to convert their processes to use wood.

The goal of the project is to reduce greenhouse gas emissions from the use of fossil fuel for thermal energy generation in the Sri Lanka industrial sector. The goal will be reached by means of removing barriers to the realization of sustainable biomass plantation, increase of market share of biomass energy generation mix and adoption of biomass-based energy technologies in Sri Lanka. The project consists of the following components: (1) Policy-institutional support for effective implementation; (2) Barrier removal for sustainable fuel wood production; (3) Enabling environment for fuel wood suppliers; (4) Wood-based energy technology development. The project is expected to generate global benefits in directly avoided greenhouse gas (GHG) emissions of almost 203 kilotons of CO2 due to switching from fossil fuels to wood-based technologies (over the lifetime of 10 years) and almost 609 – 1,378 ktCO2 as indirect emission reduction impact.

The project seeks to work with private sector, especially small-scale rural entrepreneurs to improve availability of wood-based fuel wood pieces, chips, briquette etc. at a reasonable price, of requisite quality and regular supply for industrial use. Further, the project aims to improve technology; and operations and maintenance related services for industries to switch from fossil fuel to fuel wood. Improvement of wood-burning thermal boilers and small gasification units is envisaged; with added technological solutions for fuel wood collection, its handling, storage and transport.

The project is jointly managed by UNDP and FAO as UN agencies with the reporting requirements to the GEF. The Project is Implementing under the Sri Lanka Sustainable Energy Authority of the Ministry of Power and Renewable Energy.

PROJECT MANAGEMENT ARRANGEMENT

The project is implementing by the Sri Lanka Sustainable Energy Authority of the Ministry to the Ministry of Power & Energy (MoP&RE). The SLSEA will coordinate fuel wood plantation, supply and end-use components of the project. The fuel wood growing component and other land use options should be looked into in cooperation with the Forest Department. Also broad-base project implementation will seeks the support of Chambers’, non-governmental and private sector consortium and professional bodies for project implementation activities. The following figure illustrates the new project implementation and management arrangement.

PROJECT OBJECTIVES

THE PROJECT

THE PROJECT
2016
September 16

04. WOOD-BASED ENERGY TECHNOLOGY DEVELOPMENT

This component aims at promoting the commercialization of improved and modern biomass energy technologies for both heat and power applications in the industrial sector in Sri Lanka. GEF resources will be used to finance incremental activities that would ensure the effective implementation of bioenergy technologies..Read More
September 16

03. ENABLING ENVIRONMENT FOR FUEL WOOD SUPPLIERS

This component is primarily aimed at building the enabling environment for commercial investment for fuel wood suppliers and biomass energy technology companies, in order to build a larger local market for sustainably grown fuel wood. The Ministry of Power and Energy (MOPE) itself, realizing the..Read More
September 16

02. BARRIER REMOVAL FOR SUSTAINABLE FUEL WOOD PRODUCTION

This component will address technical and coordination issues that hinder large scale fuel wood plantations and biomass supply. It is designed to address the lack of confidence in both supply (fuel wood production/ sourcing biomass) and demand (industrial needs) sectors by raising awareness, developing standards..Read More
September 16

01. POLICY-INSTITUTIONAL SUPPORT FOR EFFECTIVE FUEL-SWITCHING USING FUEL WOOD

This component is intended to address barriers related to the lack of supply of sustainably produced fuel wood in the industrial (and commercial) sector. The expected outputs that will help realize this outcome are detailed below, and focus on strengthened institutional capacities and improved cooperation..Read More
GEOGRAPHICAL FOCUS

The country’s main industrial areas are concentrated in its Western Province in the districts of Colombo and Gampaha. Therefore, the primary demand is expected to emanate from this industrial center, although other demand sources are considered under the project:

01.  Plantation product processing areas, such as
– Coconut processing (desiccated coconut) in Kurunegala District.
– Rubber processing in Kalutara District.
– Tea and rubber factories in areas at low-to-high elevation.
02.  Trincomalee (port town) in Eastern Province (major industrial demand base in that area)
03.  Vavuniya and Mulaitivu Districts (where future industrial demand will be located)
04.  Hotels, rice mills, bakeries, etc. that are spread throughout the country.

FIGURE 1

Biomass consumption in industry has increased in the past decade with steep growth in the last two years 2011 and 2012

FIGURE 2

Above map indicates the current industries utilizing biomass/ fuel wood for thermal energy. Demand for biomass in industry is concentrated in industrialized districts of Colombo, Gampaha and Kalutara.