Harnessing the wind
Senok, a group of private companies, invested more than $120 million on four wind farms in the Puttalam district on the west coast of Sri Lanka. Parts were shipped directly to the site on barges from India because the main port in Colombo, 136km away, and the road network couldn’t handle the heavy equipment. Senok’s construction team attended a specialised training course in Germany, designed specifically for turbine lifting. The four wind farms have a combined capacity of 40MW.
the maximum height of a wind turbine
the length of each blade
the length of the electricity cable feeding the nearest CEB substation
cubic meters – the amount of concrete used on the base holding
the number of wind turbines operated by Senok
(Picture Courtesy: Senok Group)
Wind power’s problem of scale
The government offering 10MW parcels to investors is preventing them from investing in better technology
The cost of wind power has fallen 30% since 2008 with technology improving, but the government’s practice of offering private investors small parcels of 10MW each creates challenges around scale for private investors.
Sri Lanka’s 127MW installed wind power capacity has the potential to reach 1,000MW, according to the Central Bank. It says Mannar, Puttalam and Jaffna are ideal locations for wind farms. Energy utility the Ceylon Electricity Board will build a 300MW wind farm in Mannar – construction of the first 100MW will commence in 2018 and the balance developed with a private investment as a joint venture.
Senok, a family owned group of over 45 private companies with businesses here and overseas ranging from construction, mining, tea, aviation and automobiles, invested over $120 million on four 10MW wind power farms in the west coast, but is bearish on expansion because it cannot achieve scale.
“10MW is not worth it,” says Mikhail Selvanayagam, a director at Senok. According to him, Sri Lanka’s wind power potential including offshore is 4,000MW, but investors cannot invest in larger efficient turbines and energy saving technology that are relatively expensive, but can make sense if scaling the business is possible. Senok operates 23 wind turbines of 80-90 meters in height, each occupying 4 acres of land in the Puttalam district. The turbines are spread across four 10MW wind farms: three of them in Mampuri built in three phases from 2008, and one in Kalpitiya completed in 2015. According to Selvanayagam, each 10MW wind farm costs between $20-30 million to build, and the return on investment would take 8-10 years.
The capacity factor, which measures capacity utilisation for power plants, is around 30% for Senok’s wind farms—elsewhere wind turbines achieve 50-60%—but the capacity factor is factored into the pricing. The company has entered into a 20-year three-tiered power purchase agreement to sell a unit of electricity to the CEB at around Rs19 over the first eight years, halved over the next seven, and as low as Rs2 for the last five years. The tariff structure is designed this way to allow private companies to recover their investments. Senok’s wind power ventures are profitable but “sometimes we barely cover costs. There’s too much waste,”Selvanayagam says. In Puttalam, annual wind speeds average seven meters per second, peaking at 10 minutes from May to September, but the CEB doesn’t always buy electricity when the wind’s most favourable: it may be off-peak hours or the grid has crashed. There are also days that winds fall below the minimum three meters per second speed limit for the turbines to work.
“The unit sales I make depend on the wind. Today, one of our wind farms produced 29MW/h. The same day last year it generated 51MWh, so earnings have halved. Today’s wind speed is 6.2 meters per second and the CEB grid has failed for eight hours,” Selvanayagam says. There are also problems with the connection. “We are directly connected to the grid, there are no dedicated lines like they have in other countries. “If a houseowner tries to plug in a device with wet hands, it will set off the trip switch in his house and also my turbine. We have shut downs like that around 800 times a day,” Selvanayagam says.
The technology is available to store wind power energy in batteries and later fed to the grid, but it’s expensive. “For a 10MW wind farm, a battery park will cost the same,” Selvanayagam says. Private investors compete for projects based on the unit price they propose to sell electricity to the CEB, so doubling the investment to include batteries is not going work. Building taller towerscan generate more wind power, but costs rise with height. Investing in bigger wind turbines that generate more power is a problem. The power generation capacity of wind turbines used here are 2MW or less, but there are machines that can generate up to 8MW. But they can be 30-40% more expensive and difficult to install.
Selvanayagam says Senok may not invest in another wind farm. “The kind of returns we’re generating does not impress anyone. “But if the government offers a project 25MW or over, then we can achieve scale,” he says.