If the new Government is to achieve a rapid economic growth, reduction in the commercial and industrial electricity tariff rate is essential, said Secretary General, CEO Chamber of Construction Industry Sri Lanka, Eng. Nissanka N Wijeratne.
The present commercial tariff rate of Rs. 23.65/ KWh is too high when compared with many countries in the South Asian region. “As Sri Lanka has a good potential to be a service hub, this high tariff rate could be a detriment.
Presently power sector is in a very precarious situation and all indications are that we are heading towards a major power crisis.”
“This is due to not adding a single major power plant to the National Grid since 2014. The second stage of Norochcholai coal power plant commissioned in 2014 with installed capacity 600 MW was the last major power plant. The only short term remedy will be emergency electricity purchases based on diesel power plants at exorbitant prices. Undoubtedly cheapest source is hydro power. But as we have already developed all the major hydro power sources, we cannot increase the hydro power generation by significant amounts.
To reduce the generation cost the alternatives will be to add either coal or LNG Power plants and retire some of the very costly Diesel power plants. Now in many countries coal power plants are being gradually phased out due to severe environment pollution. As such increasing coal power generation may not be the best choice. From a RFP called in 2012, it is evident that cleaner LNG power plants can be established as an integrated solution with LNG Supply, off loading terminal, storage & power plant to supply electricity to the National Grid at a cheaper cost of US Cents 7 per KWh as a BOO project. “With such power plants if the diesel power generation can be reduced by 50% then the CEB can save Rs. 39 billion annually”
For private investments on large power plants (over 25 MW) a major obstacle is the Section 9(c) of the Sri Lanka Electricity Act, No. 20 of 2009. “This should be amended allowing any company incorporated in Sri Lanka and issued a generation license by PUCSL to undertake a power generation plant. With a favorable legal framework and a healthy investment climate there will be absolutely no difficulty in attracting investments for power generation,” he noted.
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