Sri Lanka’s power crisis presents considerable challenges and opportunities as attempts are made to electrify the remaining 30% of non-grid connected areas and generate reliable power in a sustainable manner. Fifty percent of the energy needs in the country are being met with biomass, 70% of these are domestic rural users. Meeting Sri Lanka’s ever-growing electricity demand with fossil fuel imports is siphoning off 30% of export earnings annually. Biomass based electricity generation, commonly referred to as dendro power, has emerged as the most sustainable option in Sri Lanka to meet spiking demand. The Sri Lankan government’s Inter-Ministerial Working Committee (IMWC) on Electricity Generation from Biomass through Dendro Thermal Technology has developed a dendro thermal program whose salient feature is to add 100 MW of dendro capacity to the grid by 2010. Energy plantations of the woody plant, Gliricidia sepium, would extend over 200,000 hectares of land currently considered to be waste cropland. Income opportunities are expected for 100,000 families if the program is successful. Dendro, as a carbon-neutral source, offers a dual-purpose vehicle for rural citizens to be benefited with income and energy. The dendro program aims to supply grid, off-grid, rural industrial and household energy. This national program could result in significant environmental benefits, opportunities for poverty alleviation and support mechanisms for traditional rural industries. This report is a summary of IMWC’s Dendro Thermal Program, focusing on income avenues and economic impacts.

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