Sri Lanka dendro power plants may face higher costs: official

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

July 01, 2012 (LBO) – Dendro power plants in Sri Lanka may be unviable if too many are licensed to operate close to each other because competition may drive up firewood prices to high levels, an industry official has warned. Tokyo Power, a unit of Sri Lanka’s Tokyo Cement group is building a 5 MegaWatt dendro power plant in Mahiyangana, and is encouraging farmers and residents in surrounding areas to grow gliricidia.

S R Gnanam, joint managing director of the Tokyo Cement group says in some countries dendro plants have run into a trouble because competition drove up feed material prices to levels beyond which the power utility was buying energy.

“We have asked the Sustainable Energy Authority to give only once license within a 50 kilometre radius,” Gnanam said in a recent interview.

“Otherwise we will have a big problem.”

He said farmers do not grow gliricidia as a monocrop but used the planted it as a live fence or in gardens. Gliricidia leaves are rich in nitrogen and are useful as animal fodder and fertilizer.

Sri Lanka’s power grid is already paying about 20 rupees for dendro and 15 rupees a kilowatt for power generated from other types of biomass.

Tokyo Cement is already running a biomass

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