News
Over 40 vital renewable energy projects held up
View(s):The progress of 47 pending renewable energy projects that can add a vital 177MW to the national grid have been held up pending the calculation and review of a guaranteed tariff for the producers, by a committee appointed by the Power and Energy Ministry.
A feed-in tariff is designed to support renewable energy development by providing guaranteed, above-market price for producers. The Ceylon Electricity Board (CEB) will buy electricity at these rates. The committee will submit a report within a week, said Sustainable Energy Authority of Sri Lanka head Sulakshana Jayawardana.
These 47 companies in the areas of mini-hydro, solar, wind, biomass, agro and waste, had already received various approvals. Those that had lapsed were now being renewed, Mr Jayawardana said.
All legal obstacles to the proposed projects were removed by amendments to the Electricity Act, passed last month. After approval was obtained from the Public Utilities Commission of Sri Lanka (PUCSL) and the Cabinet for the relevant tariffs and other procedures, there was no impediment to the CEB signing power purchase agreements, Mr Jayawardana said.
The renewable energy sector had long complained of being blocked by the CEB.
Meanwhile, the International Monetary Fund (IMF) delegation that visited this week repeatedly underscored the urgency of raising electricity tariffs. A revision was likely around August, PUCSL Chairman Janaka Ratnayake said.
“Their main emphasis was debt sustainability,” he said, after meetings with the IMF team. “They said nothing can be done if there is no debt sustainability. They are pushing for a cost-reflective tariff,”he added.
The CEB recently released its price revision formula, and the PUCSL made a counter-proposal. These were open to public consultation till July 18, after which the regulator would summon selected contributors for face-to-face discussions. After discussions with the CEB and Treasury, it was likely that new tariffs would be approved around August.
Separately, Lanka Coal (Pvt) Ltd had secured 21 shipments that were due to start arriving in September. Two of these were spot tenders, while the others were term, a company source said. The coal would be shipped in from South Africa.
They added that the contracts were signed last year. Payments for the consignments would be found in future.
“The supplier can only deviate from the agreements if payment is defaulted,” the source said.
“We did default on some earlier payments but we have been clearing them to a schedule with the Central Bank releasing US$ 5mn at a time. We will clear them by mid-August,” they added.
Nevertheless, Lanka Coal needed another 17 more shipments which they would try to procure in future. Unloading of coal usually took place from mid-September to end-April, when the seas were calm.
Fossil fuel generation had increasingly become unfeasible with the prevailing world market prices, energy ministry sources added. Reform was urgent, with the injection of more renewable energy.
As at Friday, Sri Lanka had only around 30,000 metric tonnes of heavy fuel in stock with the Ceylon Petroleum Corporation. Around 2,000 MT was burned each day for power generation.
“Maintaining a three-hour power cut is extremely difficult and also costly,” they warned.
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