The government’s decision to raise the electricity price to realistic values, and its decision on May day to bring down the price for those consuming less than 60 units may not have been policy decisions that were arrive at in a rational manner. However, these happen to be exactly the right decisions in the context of Sri Lanka’s development trajectory.
At a talk I gave at the presidential secretariat in July 2009, (and also to a number of learned societies in Sri Lanka) I pointed out that the cost of electricity was too low in terms of the mode of utilization of power in Sri Lanka. More details can be found in that talk which is available on the internet (dh web.org/place.names/posts/dev-tech.ppt/). Many of the new installations are hotels, airports, offices etc., that use large amounts of electricity for air-conditioning and comfort, rather than for manufacturing and production.
Electricity is one of the most efficient forms of energy (compared to heat energy whose efficiency is controlled by Carnot’s theorem, as discussed in simple language, e.g., in my recent book – A physicist’s view of Matter and Mind). Electricity should be reserved for high-end purposes, and other energy sources should be used for low-end non-productive purposes.
Why is the rise in electricity tariffs such a blessing in disguise? Will it not slow down our industrial sector? The blessing comings from the fact that the new tariffs make solar energy (and new types of jobs), an attractive competitor among the available energy sources. The current usage pattern of 0.3-0.4 kWh per household will increase an order of magnitude within a decade, and future energy bills would be quite horrendous.
During the last decade Japan, a country with no oil or hydro-power strongly subsidized roof-top solar panels for public and corporate buildings and homes. However, with the new tariffs in Sri Lanka, no such subsidies are needed. It is now just good business to install solar panels on buildings for air conditioning and other domestic needs, while the main power-grid is the steady source. Solar energy becomes even more sensible when we note that in India today, solar electricity has fallen to about 8-9 Indian rupees per kilowatt-hour compared with 18-20 rupees for diesel-power. This is not due to improvements in the efficiency of ordinary solar panels (15 to 20 per cent efficiency). The inefficiency is outweighed by their new low price.
Luxury hotels think nothing of installing expensive marble, Jacuzzis and many high-end items in their construction. However, most architects and urban planners, unaware of solar technology simply dismiss it out of hand as `too expensive’. Similarly, given the equipment costs that go into building an airport, covering its roof with solar panels is in fact a negligible budget increment. Given today’s energy tariffs, and anticipating future tariffs, not installing solar panels is stupid. Unlike diesel or coal-power installations, solar panels need no further fuel as the fuel is delivered by the sun’s rays. The maintenance is much less costly and produce no pollution compared to traditional power generation, as we can see from the horror stories coming from the Lakvijaya powerstation in Horagolla (Horagolla is the traditional name of Norochchollai – see http://dh-web.org/place.names/).
Another technological development that cuts the cost of lighting by a factor of 10 is the use of light-emitting diodes (LEDs) for ceiling illumination panels. The cost of LEDs as gone down, while their efficiency has increased substantially.
Unfortunately, in Sri Lanka, instead of doing the obvious technological solution to a technological problem, we convert it to a political problem and quote Marx or Friedman, hold meetings or go on demonstrations. So at last, the force of circumstances have forced our policy makers to do what should have been done many years ago. The turn of events is like the removal of rice subsidies carried out during Dudley Senanayake’s time, and will have similar benefits.
It is now up to the engineers, architects and construction managers in the private and public sectors to include solar panels and LEDs as integral parts of their design practice. The garment manufacturing industry can become energy self-sufficient with such installations. A private home designed with solar panels on the roof, and a heat pump which uses the cool underground water table to cool the house can easily sell energy to the main grid. Everyone cannot afford this additions to the construction bill, but here the banks can give installation loans, to be paid up from future electricity savings.
So let us have a round of applause to high electricity tariffs for grid-based electricity. Keep them up and UP.