Features
Making a crisis into a golden opportunity
Electricity instead of fossil fuel for transport vehicles
by Engineer Parakrama Jayasinghe
Far reaching proposals for the future of our Energy Sector has been published with the Presidential Press Release dated June 13, 2021. The direction indicated is congruent with the presidential policy declaration “Vision for Prosperity and Splendor “. With the Covid 19 crippling the economy, the country is becoming even more conscious that innovative thinking and decisive action has to be introduced to meet the challenges. The foreign reserves are falling resulting in the depreciation of the rupee and bringing with it a rising cost of living to levels endangering the social and economic stability of the country. Sri Lanka is fortunate enough to have the natural resources, human resource and the resilience to cope, but a determined yet humble approach and firm policies, accompanied with unstinted hard work and discipline is needed.
In the strategy for a workable holistic Energy policy, not limited to electricity, the transport sector will need the maximum attention. Please refer to the two links of the Island newspaper given below for detailed information, where this subject was dealt with earlier.
The state of finances in the CEB and the CPC
The finances in both these state owned enterprises are highlighted in the Press Release. It is evident that if left unchecked, it could very well lead to drag down the two state banks that over the years have bankrolled these two institutions.
There is no dispute that the CEB, is bleeding the national economy, but while the debate would continue as to how this can be corrected, the much more dangerous and tragic situation has got less attention. That is the tremendous drain on foreign exchange due to the complete dependence on imported fossil fuels for our transport. Sri Lanka spent some 7.5 Billion Dollars for the import of oil back in 2010. But although the import bill in dollar terms came down to Four Billion Dollars by 2020, the rupee equivalent remains at Rs 760 Billion, due to the continued depreciation of the rupee which appears to be inexorable. The trap mankind and Sri Lanka in particular has fallen into, remains just that, a trap, in which we wallow without making any attempt to escape.
Isn’t it pure insanity to make plans and forecasts for transport, a most important national need, based on such a variable and uncontrollable input? This viewed along with the change in parity rate, which with minor fluctuations is on an inexorable upward trend, tells the story. Fortunately, we are now offered an alternative which was not available even a few years ago.
Are we ready to accept this challenge ?
I contributed an article back in March 2020, when the oil prices were quite low, down below $ 30 per barrel, suggesting not to be complacent and make plans for a paradigm shift in the Transport Policy and make use of this opportunity. It did not receive any attention from the authorities.
The whole world is moving away from the use of petrol and diesel for transport. Even General Motors which killed the first Electric Car in the early 1960s, has plans to go all electric by 2025. So have all the major automobile manufacturers and governments with firm plans to totally electrify the transport within this decade itself. The International Energy Agency (IEA) has predicted that all vehicles manufactured will be electric by the year 2035.
Does it make sense that Sri Lanka allows to set up a factory for the manufacture of petrol driven vehicles ignoring these world trends? There are also moves to spend 2.5 Billion dollars to construct a refinery in Hambantota. Also plans are underway to double the capacity of the refinery at Sapugaskanda. These decisions would have been highly appropriate and visionary moves, if taken and implemented at the right time, which was at least a decade ago.
The world has changed drastically during this past decade, particularly in the energy sector and the transport vehicle technologies.
The huge import bill on oil itself is largely responsible for the continuing depreciation of the rupee to a very large extent, now exceeding over 6% annually. The recent price hike of the petroleum fuels is therefore not unexpected.
Although the Yahapalana government effectively scuttled the baby steps being taken for the electrification of the light vehicle fleet, the advent of the Covid -19 pandemic has at least led to the wise decision to curtail the import of vehicles, making a virtue of necessity.
It is recommended that once the import ban is lifted only electric vehicles and perhaps for some years hybrid vehicles should be permitted to be imported with strict controls to limit the imports to the bare necessity.
However, it must also be noted that the last energy policy published by the previous government in August 2019, includes a target of reaching 25% electrification of the light vehicles by 2023. A good enough starting point.
Why Electrify Transport?
No doubt Sri Lanka has a back to the wall battle at this point of time, due to the double whammy of increased price of oil and the depleted rupee, to try and reduce the dependence on imported oil, purely on financial considerations at present. But there are very valid scientific, environmental and commercial reasons why electrification of the transport system is the wise and obvious way for the future.
As already mentioned all the major automobile manufactures have plans for total departure from the use of Internal Combustion Engines (ICE) using petrol or diesel in their future vehicles. As such before too long Sri Lanka would have to depend on the laggards who will continue with the ICE engines and face the many problems that would ensue, such as higher costs and lack of spares supply etc.
However, the ground reality of the great efficiency of converting the energy input to useful energy to drive the vehicle forward which is as high as 85% for an electric vehicle, is the most important factor that justifies the changeover. This has to be compared to the mere 15% efficiency of conversion for a petrol or diesel engine driven vehicle. The reality of gaining from this wonderful boost of efficiency was denied until now till the cost and durability of batteries and the overall cost of the electric vehicles came down to the present values. This change has been rapid and continues on the downward trend.
We in Sri Lanka have the added advantage of being able to use solar energy, which does not cost anything other than the initial installation cost, to charge the vehicles, instead of spending valuable foreign exchange to import the fossil fuels. The author has adopted this strategy and would highly recommend this option to all EV owners.
The Way Forward
The starting point of course is a firm national policy, made mandatory for compliance. Even the institutions under line Ministries often ignore such policies in their day to day programs. Therefore if at this late stage, Sri Lanka takes the following steps, it will convert a Crisis to an Opportunity.
1. Review the policy statement “4.5 Enhancing Self Reliance Section 5f” in the National Energy Policy Gazette No 2135/61 of August 9, 2019, as a national target and assign responsibilities of achieving this target to the relevant agencies. And expand same, to a time bound target of 100% electrification of transport.
2. Remove the punitive duty rates imposed on the import of Electric Vehicles which came in to force on April 1, 2019. These nearly doubled the price of the EVs coming into the country destroying the small growth seen till then. Follow the example of other countries including India, in providing subsidies for purchase of/conversion to EVs for the 2 W and 3 W segments
3. Remove the punitive duties and taxes on the import of deep cycle batteries, imposed on the erroneous notion of protecting local battery industry, which does not manufacture any deep cycle batteries, suitable for EVs and r Solar Energy storage
4. Continue the ban on import of all vehicles at least for three years more. After that allow only electric vehicles or hybrid vehicles
5. Initiate an immediate program to convert existing ICE vehicles to EVs with suitable incentives
The following chart points to the pot of gold at the end of the rainbow if the last recommendation is acted upon. Based on a target of converting at least the existing fleet of light vehicles by year 2030 to EVs, the potential savings by reducing the petrol imports is huge.
The June 13, 2021 Press Release from the Presidential Office makes very interesting reading. It appears that the penny has dropped at last on the sensible actions to be taken in the future. If the Government is to walk the talk, the first action to take while implementing the recommendations above is to cancel any plans to expand the capacity of the Sapugaskanda Refinery using our funds or even loans. If any foreign investors plan to put up any new refineries using their funds without any guarantees of purchase by Sri Lanka, or any other incentives, that could be considered.
The many ways that this change could benefit the Sri Lankan economy, environment and health is far too many to be included here. But even without such detailed analysis, anyone with common sense can readily understand the timeliness and the value of embarking on this change without any further delay.
I am pleased to end this revised article with a hope of a new dawn.
Eng. Parakrama Jayasinghe
Council member
Bio Energy Association of Sri Lanka
Solar Industries Association of Sri Lanka
Sri Lanka Forum for Sustainable Consumption and Production Forum
E Mail: parajayasinghe@gmail.com