Electricity Act amendment may see new power plants

The amendment to the Sri Lanka Electricity Act has been welcomed by those in the power sector and already some are canvassing for power plants, renewable industry officials say.

Despite the power sector unions and opposition parties opposing the amendment saying it removes competitive bidding for new power projects, more and more businessmen are coming forward with new power project plans, officials said. Unions have claimed that the amendment was made to rush through an unsolicited wind power deal with India’s Adani Group.

Manjula Perera, CEO WindForce PLC told the Business Times that the Ceylon Electricity Board (CEB) still owes renewable energy developers Rs. 23 billion dues, accumulated since last September.

While noting the amendment to the Act is a big achievement, he said that most renewable energy projects are bank funded and already the industry has a collective of Rs.60 billion in borrowings. “Not a single bank will be interested to fund any more renewable energy projects. So, despite the interest after the amendment there is a big question mark in funding these projects,” he pointed out.

As for WindForce, the company is aggressively looking at foreign projects. Mr. Perera pointed out that these projects will fetch the much- needed foreign exchange to the country and will also be beneficial to the company. “We are not giving up on Sri Lanka but given the current situation we are very bullish on the African countries.”

In May alone, the country had spent US$100 million for the fuel which was supplied for power generation at thermal power plants. The CEB has proposed a 300 per cent increase in the electricity tariff given the steep rise in the power generation cost.

A spokesman for Federation of Renewable Energy Developers said that the small hydropower sector today contributes to more than 10 per cent of the power generation of the country with 225 up and running projects. “But sadly the

CEB website daily generation report indicates the data of only 29 projects. Not connecting the remaining projects seems nothing but a malicious attempt by CEB to downplay mini hydro contribution to energy sector.”

He noted that many mini hydro projects would have got added to the grid if not blocked by the CEB citing an anomaly in the Act.

“But thereafter they never developed a methodology to sign power purchase agreements for mini hydro projects under their so-called best method of tendering. Before 2016 every year about 30 MW to 40 MW were getting commissioned. If this trend was allowed to continue, today we could have had further 100 MW of mini hydro which could have saved much money to CEB, country and saved so much diesel,” he added.

In May alone, the country had spent US$100 million for the fuel which was supplied for power generation at thermal power plants.