Lanka’s power crisis due to forex, tariff hike issues
When Ceylon Electricity Board (CEB) General Manager Rohan Seneviratne wakes up every morning, his first task is to check the water levels in the country’s reservoirs.
“This is to ascertain how much hydropower (can be generated),” he said, speaking at a panel discussion last week on the “Power crisis” organised by the Sunday Times Business Club (STBC) at the Movenpick Hotel, Colombo. The co-sponsors of the event were Hemas Holdings and NDB Bank.
It revealed at the discussion that the power cuts were due to a variety of reasons including high fuel costs, devaluation, a shortage of foreign currency and delays in enforcing price hikes.
Mr. Seneviratne said that the CEB generates 4,750 megawatts (MW) of power of which 3,000 MW comes from the CEB and the balance from private power plants. There are 46,000 rooftop solar power units which generate 700 MW.
In 2021, the CEB generated 50 per cent from renewable energy whereas the world average was 26 per cent. He said there are huge challenges in coal procurement while tariffs, one of the main problems, hasn’t changed for a number of years.
Costs have escalated in 2022 and now in 2023. “We have 7 million customers and 200,000 km of lines while smart meters (which are more efficient) are unaffordable at US$100 per meter which is costly. There is a4 per cent reduction in demand this year,” he said, adding that there is a need to increase renewable energy resources.
He said all CEB projects funded by ADB and the World Bank have come to a standstill due to the current crisis.
Damitha Kumarasinghe, Director-General – Public Utilities Commission of Sri Lanka, involved in a furore with the CEB over tariff hikes, said that while the consumer cannot afford price hikes, there is need for a solution of uninterrupted power at affordable prices.
“If the price hikes are too high, demand will drop (as people will voluntarily not use power) and it’s just like enforcing a power cut,” he said.
“How do we safeguard both the consumer and the government? This crisis has been there for several years due to a variety of reasons. In recent times, fuel prices have gone up by four times,” he said, adding that there is a need to prepare for the future where there aren’t any crippling power cuts.
Kushan Jayasuriya, Vice President, Solar Industries Association (SIA), said there was a need for a cost-reflective tariff scheme. “We need to go for this to save us from the current crisis. Renewable energy is the cheapest but renewable energy producers need to be paid. We are the lowest cost for industry in the region,” he said.
It was revealed that the CEB owes Rs. 43 billion to non-conventional renewable energy producers and, as of now, only December 2021 payments are being made.