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Presentation by Dr. Tilak Siyambalapitiya at the Technical Session 1 at the SLEA Annual Session 2011
Citation preview
Economic Impacts of Economic Impacts of Energy PricesEnergy Prices
SLEA Annual SessionsSLEA Annual Sessions
1
SLEA Annual SessionsSLEA Annual Sessions
Tilak SiyambalapitiyaTilak Siyambalapitiya
15 Oct 201115 Oct 2011
News, not really news, or should not be news....
Ceylon electricity Board is incurring heavy Ceylon electricity Board is incurring heavy losses due to burning more fuel for power losses due to burning more fuel for power
generation, CEB sources say. (2011)generation, CEB sources say. (2011)
Petroleum Corporation to post losses: Petroleum Corporation to post losses:
2
Petroleum Corporation to post losses: Petroleum Corporation to post losses: subsidised fuel supply for power generation subsidised fuel supply for power generation
and kerosene subsidy, the reasons (2010)and kerosene subsidy, the reasons (2010)
Ceramic industry in trouble: Ceramic industry in trouble: energy costs unbearable, says energy costs unbearable, says Ceramic Council (all the time)Ceramic Council (all the time)
� Sri Lanka has the highest price of electricity in the region !� Fact or fiction ?
� Petroleum prices never match costs, but we need subsidies.
The Public Say .......
3
need subsidies.�When will this end ?
� Build renewable energy-based power generation !�Willing to pay for them: No
�Willing to have one in your back yard: No
� Energy intensity of the economy and its trend
�What can be done to retain the healthy trend ?
� Energy costs of individual companies/processes.
Presentation Outline
4
companies/processes.
�Which way should we move ?
� The new electricity pricing policy
�How will it resolve the sub-sector burden on the Treasury
� Can we replicate it in the petroleum sub-sector?
Coal
0.5%
Hydro
9.5%
Biomass
47.7%
Sri Lanka Primary Energy Supply: 2007
5
Petroleum
42.3%
Total primary energy supply: 10 million toePer capita supply: 0.5 toeShare of renewable energy 57.2%
Sri Lanka Electricity Prices Compared
Ba
ng
lad
esh
Ke
rala
,
Ind
ia
Ma
ha
rash
tr
a,
Ind
ia
Ta
mil
na
du
,
Ind
ia
Ma
lay
sia
Ne
pa
l
Pa
kis
tan
Ph
ilip
pin
es
Sin
ga
po
re
So
uth
Ko
rea
Sri
La
nk
a
Th
ail
an
d
Small 30 - 5.31 2.82 1.87 2.78 8.00 7.80 3.26 11.92 21.09 8.46 5.00 5.58
Medium 90 - 4.58 3.98 6.59 4.61 8.00 10.05 5.68 14.54 21.09 7.77 6.07 7.04
Large 300 - 4.94 7.53 9.12 7.32 9.41 11.50 7.63 18.31 21.09 12.92 23.87 8.79
Average Unit Price in LKR (unity power factor)
Household
Customer Class
Electricity
Usage
(kWh/mth)
Maximum
Demand
(kW)
6
Small 1,000 - 5.33 21.23 14.02 15.73 14.56 13.85 17.32 26.44 21.09 10.52 19.74 10.11
Medium 58,000 180 8.82 15.03 21.02 16.52 13.29 12.66 12.01 18.93 21.09 9.44 22.09 8.76
Large 600,000 1500 6.67 11.23 18.47 16.08 12.76 12.15 10.68 16.95 14.60 7.67 20.98 8.75
Small 5,000 - 6.81 8.11 11.95 12.04 12.77 10.27 11.60 16.33 21.09 5.74 10.55 10.65
Medium 65,000 180 4.12 9.20 12.31 11.86 12.13 9.83 10.72 18.37 20.95 6.50 12.47 8.49
Large 270,000 600 7.71 8.84 13.21 11.45 9.39 9.47 10.18 16.61 20.49 6.51 11.55 8.46
Very Large 1,050,000 2250 5.25 8.49 13.18 11.40 8.84 7.61 9.72 16.36 14.09 6.35 11.48 8.38
Commercial
Industrial
� Energy: Per capita total energy consumption (including biomass):
� 0.4 tonne of oil equivalent per person per year
� Electricity
Total electricity consumption: 460 kWh/person/year
Sri Lanka: Status of Energy Services
7
� Total electricity consumption: 460 kWh/person/year
� About 90% of households have an active grid electricity connection, 3% off-grid services
� Ambitious target to serve the balance 7% by end 2012
� Demand fully served, pricing problems remain
� Petroleum
�Demand served, pricing problems remain
Energy Demand is Growing and will Energy Demand is Growing and will continuecontinue
Supply of Energy by Different Sources (Thousand TOE)
6,000
8,000
10,000
12,000
Th
ou
sa
nd
TO
E
Biomass (Thousand TOE) Petroleum (Thousand TOE)
Hydro (Thousand TOE) Non-conventional (Thousand TOE)
8Source: Sri Lanka Energy Balance 2007
0
2,000
4,000
6,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Year
Th
ou
sa
nd
TO
E
Energy Intensity of the Economy: Primary Energy
9
Energy Intensity of the Economy: Commercial Energy
10
� Reasons ?
� Structural change in the economy: Services need less energy than manufacturing
� High energy prices keep consumption low, discourages waste
� Other indicators are not that healthy !
Macro Picture of Energy Use and trend : Good
11
� However ........ severe problems in end-use sectors
� Transport: excessive waste
� Heavy industry: no longer competitive
� Electricity use in households growing, industry: low growth, problems to supply
� Severe issues in energy utilities
Energy Imports
108.5
60
80
100
120
140
Share of export income
used to import oil
Average import price of
crude oil (USD/bbl)
12
20.7
37.8
44.8
0
20
40
60
19
72
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
99
20
02
20
05
20
07
� Transport sector�Many solutions proposed by economists, specialists. Effectively NONE have been implemented.
�Highlight one proposal: Electrification of suburban railways� Project can be justified on energy savings alone
What are the Solutions ?
13
� Project can be justified on energy savings alone
� Many professional proposals for the past 30 years, most-recently by the Institution of Engineers
� No where near implementation
� Manufacturing industry� Some indicators show growing specific energy consumption
� Needs more focus on energy efficiency� Beyond switching off ...... process changes
Problems of Sector InstitutionsProblems of Sector Institutions
The Case of the Power SectorThe Case of the Power Sector
14
Sri Lanka’s 2006 Policy in Action: Energy Share in Electricity
10,000
12,000
14,000
16,000
18,000N
et
Gen
era
tio
n (
GW
h)
Coal
Oil
Non-conventional renewable
Hydro
15
-
2,000
4,000
6,000
8,000
2010 2011 2012 2013 2014 2015
Net
Gen
era
tio
n (
GW
h)
� A unique window of opportunity
� Must be used to
�Restructure prices
�Get the sector back into profitability
� Any indications of that happening ?
Changing fuel mix in Power Generation
16
� Any indications of that happening ?
�Methodology established
�Implementation: sluggish !
Sri Lanka’s Window of Opportunity�� Electricity production costs are declining in real Electricity production costs are declining in real termsterms
�� The three key power plants must be built on timeThe three key power plants must be built on time
�� IPPs are retiring, capacity payments will decline (not to IPPs are retiring, capacity payments will decline (not to forget the Govt is paying loans, which CEB is not servicing forget the Govt is paying loans, which CEB is not servicing until end 2013) [see picture next slide]until end 2013) [see picture next slide]
�� Better use of network assetsBetter use of network assets
17
Better use of network assetsBetter use of network assets
�� Network losses are declining Network losses are declining [see table in a later slide][see table in a later slide]
�� Good oversight by PUCSL and determined effort by licensees Good oversight by PUCSL and determined effort by licensees would be requiredwould be required
�� Expected high economic growthExpected high economic growth
�� A new regulatory system in placeA new regulatory system in place
The Evolving Cost Structure
0.45
0.790.85
0.96
1.12
1.06
2.712.88
2.67
2.49
2.30
2.12
10.00
12.00
14.00
16.00
18.00
20.00
Avera
ge c
ost
of
sa
les t
o e
nd
-use
rs (
Rs/k
Wh
)
Distribution
Transmission
Generation Fuel
Generation capacity
In constant 2010 currency-no
inflation or fuel price
escalations
18
3.204.03 4.01 4.53 4.65 4.62
10.54 8.64 9.159.49
7.04
5.59
-
2.00
4.00
6.00
8.00
10.00
2010 2011 2012 2013 2014 2015
Avera
ge c
ost
of
sa
les t
o e
nd
-use
rs (
Rs/k
Wh
)
The Declining Losses to be Managed by Licensees and the Regulator
Year Sales to End-use
Customers (GWh)
Sales growth
Input to Transmission
network (GWh)
Sri Lanka T&D Loss
(% of input to transmission)
Policy target for
Sri Lanka T&D losses
2009 8,371 - 9,754 14.2% 13.5%
2010 9,031 7.9% 10,503 14.0%
19
2010 9,031 7.9% 10,503 14.0%
2011 9,667 7.0% 11,185 13.6% 2012 10,308 6.6% 11,903 13.4% 2013 10,989 6.6% 12,612 12.9%
2014 11,713 6.6% 13,375 12.4% 2015 12,485 6.6% 14,206 12.1% 12.1%
2016 12.0%
Transition to a Regulated Market�� Generators (IPPs, SPPs, CEB)Generators (IPPs, SPPs, CEB)
�� Sell only to Transmission LicenseeSell only to Transmission Licensee
�� Based on Power Purchase Agreements (PPAs), no competitive marketBased on Power Purchase Agreements (PPAs), no competitive market
�� Existing PPAs will continue, new PPAs only based on approved plan and Existing PPAs will continue, new PPAs only based on approved plan and
competitive biddingcompetitive bidding
�� Transmission Licensee (one)Transmission Licensee (one)
�� Transmission (Wires) businessTransmission (Wires) business
�� Operates the Transmission System, including the dispatchOperates the Transmission System, including the dispatch
�� Bulk Supply business: Buys from Generation, sells to distribution [no Bulk Supply business: Buys from Generation, sells to distribution [no
20
�� Bulk Supply business: Buys from Generation, sells to distribution [no Bulk Supply business: Buys from Generation, sells to distribution [no
profit/loss]profit/loss]
�� Distribution Licensees (five)Distribution Licensees (five)•• CEB Region 1CEB Region 1
•• CEB Region 2CEB Region 2
•• CEB Region 3CEB Region 3
•• CEB Region 4CEB Region 4
•• Lanka Electricity Company (Pvt) Ltd.Lanka Electricity Company (Pvt) Ltd.
�� Distribution (wires) BusinessDistribution (wires) Business
�� Retail services (metering, meter reading, accounting, collections)Retail services (metering, meter reading, accounting, collections)
�� Retail Business: Buys from transmission, sells to endRetail Business: Buys from transmission, sells to end--use customers [no use customers [no
profit/loss]profit/loss]
The New Tariff Policy�� All licensee financial operations are “ringAll licensee financial operations are “ring--fenced”fenced”
�� Licensees are responsible only for matters under their controlLicensees are responsible only for matters under their control
•• Rewarded for exceeding target (eg: greater reduction of network Rewarded for exceeding target (eg: greater reduction of network losses)losses)
•• Penalised for under performance (eg: increasing losses)Penalised for under performance (eg: increasing losses)
�� For parameters not within their control, they are transparently For parameters not within their control, they are transparently compensated (surcharged)compensated (surcharged)
•• Government wants more subsidies to be given (compensated), and Government wants more subsidies to be given (compensated), and if the Government does not pay ?: surcharge the relevant if the Government does not pay ?: surcharge the relevant customerscustomers
21
customerscustomers
•• The Single Buyer hits a drought (compensated, customers The Single Buyer hits a drought (compensated, customers surcharged)surcharged)
•• It rains heavily (surcharged, benefit passed on to customers)It rains heavily (surcharged, benefit passed on to customers)
�� The long and painful history of underThe long and painful history of under--pricing pricing electricity in Sri Lanka would soon come to an end, electricity in Sri Lanka would soon come to an end, under the new policyunder the new policy
�� The naming and blaming game should also endThe naming and blaming game should also end
�� All costs and prices, licensee performance, Government All costs and prices, licensee performance, Government performance, are to be publishedperformance, are to be published
�� Clear separation of business would occurClear separation of business would occur
Generation Costs�� Generation costs would be on a sixGeneration costs would be on a six--month averagemonth average
�� Transfers from Generation to Transmission would be on a twoTransfers from Generation to Transmission would be on a two--part tariff:part tariff:
�� Capacity charge: 966 LKR/MW per month (per MW of measured Capacity charge: 966 LKR/MW per month (per MW of measured demand, coincident with the system peak)demand, coincident with the system peak)
�� Pure Energy Charge: Pure Energy Charge:
Total Energy cost
for six-monthsLKR million 38,506.8
22
for six-monthsLKR million 38,506.8
Total energy
dispatch for six-
months
GWh 5,514.7
Six-month average
energy costLKR/kWh 6.98
Transmission Tariffs for Sales to Distribution
�� Generation costs and Transmission Costs are added Generation costs and Transmission Costs are added
�� Transfers from Transmission to Distribution too would be on a twoTransfers from Transmission to Distribution too would be on a two--part part tariff:tariff:
�� Capacity charge: 1243 LKR/MW per month (per MW of measured Capacity charge: 1243 LKR/MW per month (per MW of measured demand, coincident with the system peak)demand, coincident with the system peak)
�� Energy Charge: Energy Charge:
Economic
dispatch
ST debt
recovery
Renewable
energy above
avoided costs
Total BST
(E)
23
dispatch recoveryavoided costs
(E)
BST day (E1)
6-Month weighed
average
LKR/kWh 7.16 0.52 0.11 7.78
BST peak (E2)
6-Month weighed
average
LKR/kWh 9.37 0.52 0.11 10.00
BST off-peak (E3)
6-Month weighed
average
LKR/kWh 4.97 0.52 0.11 5.60
End-use Customer Tariffs: Costs and IncomeTotal Summary -2011 - With existing tariffs
Customer Category Total Sales
(GWh)
Total Cost
(LKR million)
Total revenue
(LKR million)
Total
(Subsidy) or
surcharge
on
customers
(LKR million)
Cost of
supply(LKR/kW
h)
Forecast
revenue
(LKR/kWh)
HH 1-phase
0-30 233 5,518 1,113 (4,405) 23.66 4.77
31-60 756 15,928 3,695 (12,233) 21.07 4.89
61-90 1,018 20,093 5,974 (14,119) 19.73 5.87 91-180 1,254 22,225 14,973 (7,252) 17.72 11.94
181-600 492 8,346 9,957 1,611 16.98 20.26
>600 100 1,479 3,561 2,082 14.87 35.78
Sub Total 3,853 73,590 39,273 (34,317) 19.10 10.19
Other LV
24
Other LV
Religious 57 1,004 513 (491) 17.65 9.02
General Purpose 1 1,149 15,809 23,943 8,134 13.76 20.83
Industrial 1 238 3,171 2,611 (561) 13.32 10.96
Hotel 1 1 19 20 1 15.01 15.73 Street Lighting 148 2,292 3,668 1,376 15.43 24.70
Sub Total 1,594 22,295 30,754 8,460 13.99 19.29
LV BULK -
General Purpose 2 875 9,751 18,555 8,803 11.14 21.20
Industrial 2 1,561 19,899 19,444 (455) 12.75 12.46
Industrial 2 TOU 174 2,159 2,343 184 12.41 13.47
Hotels 2 TOU 2 26 30 4 11.10 12.60
Hotels 2 (GP) 73 824 1,169 345 11.21 15.91 Hotels 2 (IP) 54 656 625 (31) 12.25 11.67
Sub Total 2,739 33,315 42,165 8,850 12.16 15.39
MEDIUM VOLTAGE -
General Purpose 3 223 2,263 4,378 2,115 10.13 19.61
Industrial 3 1,035 10,965 11,661 697 10.59 11.26
Industrial 3 TOU 143 1,376 1,721 345 9.64 12.06
Hotels 3 8 77 83 6 9.66 10.44 Hotel TOU 71 629 725 95 8.89 10.24
Sub Total 1,480 15,310 18,569 3,259 10.34 12.55
Total 9,666 144,510 130,761 (13,749) 14.95 13.53
Features of Customer Tariffs in 2010�� Not in alignment with the principles of pricing: Electricity Not in alignment with the principles of pricing: Electricity
costs are determined bycosts are determined by
�� Voltage at purchase point Voltage at purchase point
•• Determine capacity charge and average energy chargeDetermine capacity charge and average energy charge
•• Time of use determines the energy charge variantsTime of use determines the energy charge variants
�� A total of 27 customer categories (including six household A total of 27 customer categories (including six household blocks, five religious blocks)blocks, five religious blocks)
�� Customers subsidisedCustomers subsidised
�� Households using up to 180 kWh/monthHouseholds using up to 180 kWh/month
�� All religious customersAll religious customers
25
�� All religious customersAll religious customers
�� Small and medium industriesSmall and medium industries
�� Hotels classified as industriesHotels classified as industries
�� All other customers pay a surchargeAll other customers pay a surcharge
�� In addition, the Government provided an indirect subsidy byIn addition, the Government provided an indirect subsidy by
�� under pricing fuelunder pricing fuel
�� selective duty waivers for importsselective duty waivers for imports
�� various other concessionsvarious other concessions
Proposed Structural Changes to the Customer Tariff: The Road Map to Make Customers Pay what it costs
Year Households Religious Other retail
(industry, general,
hotel)
Industry
(bulk)
Hotel (bulk) General
(bulk)
Reduce blocks from 6 to 4
For 0-30 kWh
customers, Govt fully
implements a direct
subsidy, as provided in
the National Energy
Policy and the Govt’s 10-
year plan2013 Reduce blocks from 4 to 3 No No difference between the customer classes, except in
TOU
mandatory
All hotel
customers unified
into one category
No
changes
2012 No
changes
Further reduce the
price gap between
the three classes
of customer
All three classes of bulk customers to
be unified and Time of Use (TOU)
tariffs to be mandatory, Introduce a
charge for reactive power
2011 No major changes No
changes
Reduce the gap
between the three
classes
26
2014 Retain 3 blocks No
changesOptional TOU tariff for all 3-
phase customers
No
changes
2015 Abolish block tariffs.
Optional TOU tariffs to all
customers.
No
changes
No further changes
Tariffs yield adequate revenue to breakeven, meet all commitments including debt
service, but excluding a return on assets to GOSLNo further changes
Tariffs to all customers are targeted to be fully cost reflective. GOSL earns a return on
assets on the sector.
2013 Reduce blocks from 4 to 3 No
changes
No difference between the customer classes, except in
terms of voltage at which service is provided. For the
purpose of retaining a database, customer classification will
be retained in the accounting system.
TOU tariffs will be mandatory for all retail and bulk
customers in industry, hotel and general purpose categories
Any subsidies will be addressed outside the licensee tariffs.
Proposed Structural Changes to the Customer Tariff: The Ultimate Target Structure
Demand
Charge
Fixed Charge
(LKR/kVA.
month)
(LKR/month)
Households All day 15.00 - - 100
Day 15.00
Peak 18.00
off-peak 12.00
Other retail - - 100
Customers Energy charge
(LKR/kWh)
Reactive
power
Charge
(LKR/kVArh)
27
off-peak 12.00
Day 10.00
Peak 13.00
off-peak 7.00
Day 9.00
Peak 12.00
off-peak 8.00
MV Bulk 1200 0.4 2000
LV Bulk 1500 0.5 1000
Tariff figures are only for illustration
Customer Tariff Announced for January-June 2011
�� The reform process has begunThe reform process has begun
�� Customer categories down from 27 to 20Customer categories down from 27 to 20
�� Medium and large hotels unified into one categoryMedium and large hotels unified into one category
�� Time of Use Tariffs mandatory for all Time of Use Tariffs mandatory for all
•• medium and large industriesmedium and large industries
28
•• medium and large industriesmedium and large industries
•• medium and large hotelsmedium and large hotels
�� Household blocks have been retained at 6, although the Household blocks have been retained at 6, although the Govt policy may have caused blocks to be increasedGovt policy may have caused blocks to be increased
�� Street lighting costs have been “socialised’ (all customers Street lighting costs have been “socialised’ (all customers jointly pay for street lighting, estimated to be a load of jointly pay for street lighting, estimated to be a load of about 0.25 LKR/kWh)about 0.25 LKR/kWh)
�� More reforms have been planned in the More reforms have been planned in the upcoming revision datesupcoming revision dates
�� 11stst January 2012, etc.January 2012, etc.
Customer Tariff Announced for January-June 2011: The TariffsCustomer
Category and
consumption
per month
Energy
Charge
(Rs/kWh)
Fixed
Charge
(Rs/month)
Maximum
Demand
Charge
per month
(Rs/kVA)
Customer
Category and
consumption
per month
Energy
Charge
(Rs/kWh)
Fixed
Charge
(Rs/month)
Maximum
Demand
Charge per
month
(Rs/kVA)
0-30 3.00 30.00 - I-1 10.50 240.00 -
31-60 4.70 60.00 - I-2
61-90 7.50 90.00 - Day 10.45
91-120 21.00 315.00 - Peak 13.60
121-180 24.00 315.00 - Off-peak 7.35 >180 36.00 315.00 - I-3
Day 10.25
Peak 13.40
0-30 1.90 30.00 - Off-peak 7.15
Religious (R)
850.00
3,000.00 750.00
3,000.00
Industry (I)Domestic (D)
29
0-30 1.90 30.00 - Off-peak 7.15
31-90 2.80 60.00 - Hotel (H)
91-120 6.75 180.00 - H-1 19.50 240.00 -
121-180 7.50 180.00 - H-2
>180 9.40 240.00 - Day 13.00
Peak 16.90
Off-peak 9.10
H-3
Day 12.60
Peak 16.40
Off-peak 8.85
GP -1 19.50 240.00 -
GP -2 19.40 3,000.00 850.00
GP -3 19.10 3,000.00 750.00
3,000.00 750.00
General Purpose (GP)
3,000.00 850.00
Indicative Revenue Management Mechanism
Single BuyerBulk Supply Transactions
Account
Generators(CEB, IPP,SPP)Shot-term
debt repayment
Ren Energy above avoided
GOSL Subsidy
11,767 million LKR
5,600 million LKR
1,132 TL
72317,231
104,635 million LKR
30
Accountabove avoided costs
1,132 million LKR
DL16,864
million LKR
DL27,782
million LKR
DL34,563
million LKR
DL43,698
million LKR
DL52,514
million LKR
7231million LKR
7,231million LKR
34,280million LKR
27,368million LKR
17,427million LKR
11,785million LKR
15,971million LKR
41,444million LKR
35,150 million LKR
21,991million LKR
15,482million LKR
18,485million LKR
106,831million LKR
Renewable Energy:Best in the World, but world’s highest
Feed-in tariffs !!!
Sri
Lan
ka
Th
aila
nd
Uga
nd
a
Ma
laysia
Sou
th K
ore
a
Ta
nzan
ia
Ind
ia (
An
dh
ara
Pra
de
sh
)
Ind
ia (
Tam
ilna
du
)
Ind
ia (
Ka
rna
taka
)
Ind
ia (
Ma
dh
ya
pra
de
sh)
US
A (
Min
ne
so
ta
sta
te)
Gre
at
Bri
tain
(Eng
land
+S
co
tla
nd
+
Wa
les)
Can
ad
a (
Onta
rio
pro
vin
ce)
Germ
an
y
Ch
ina
(T
aiw
an
)
Mini-hydro 13.32 5.11 8.06 8.39 4.87 6.65 6.79 7.16 5.56 11.04 7.01 11.03 12.18 8.21
Wind 19.97 18.24 13.69 7.11 8.33 6.67 8.40 8.98 11.59 7.01 16.33 17.94 9.84
Renewable Energy Feed-in Tariffs paid in Different Countries (in equivalent LKR/kWh)
Te
ch
no
log
y-n
eutr
al ta
riff
: 8
.26
31
Wind 19.97 18.24 13.69 7.11 8.33 6.67 8.40 8.98 11.59 7.01 16.33 17.94 9.84
Biomass 20.70 4.74 11.37 9.85 6.50 6.74 7.11 10.46 16.00 3.89 10.48 11.53 8.21
Solar PV 34.65 39.96 30.99 47.30 67.33 45.63 37.96 75.75 29.99
Agricultural &
Industrial Waste14.53 10.11
Municipal Waste 22.02 12.77 4.30
Waste Heat
Recovery6.64
Biogas 12.69 10.21 8.94
Landfill Gas 9.82 9.38 9.49
Geothermal
Energy8.50 17.91 2.34 18.08
Te
ch
no
log
y-n
eutr
al ta
riff
: 8
.26
Many international publications, comparing different countries confirm that Sri Lanka pays the highest prices for minihydro, wind, biomass
Conclusions�� The transition has begunThe transition has begun
�� Several more steps are required to fully implement the Tariff Several more steps are required to fully implement the Tariff Methodology to licenseesMethodology to licensees
�� A five year program to reform customer tariffA five year program to reform customer tariff
�� The Skeptics are manyThe Skeptics are many�� Can the sector ever be profitable ? Can the sector ever be profitable ?
�� Should the Govt ever try to make the sector not to be a Should the Govt ever try to make the sector not to be a burden?burden?
�� It can be achieved using the unique window of It can be achieved using the unique window of
32
�� It can be achieved using the unique window of It can be achieved using the unique window of opportunity available to Sri Lanka (2011opportunity available to Sri Lanka (2011--2015)2015)
�� Wanted:Wanted:
�� The Public Utilities Commission to remain strong and The Public Utilities Commission to remain strong and professionalprofessional
�� The licensees to cooperate and stand strong against The licensees to cooperate and stand strong against outside interferenceoutside interference
�� The customers to stand strong and demand for their The customers to stand strong and demand for their rights and a costrights and a cost--reflective pricereflective price
� Customer vigilance
� Professional support
� Willingness to do better
We can do it !!!
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� Willingness to do better
Sri Lanka’s First Commercial Wind Power Plant and the First coal-fired power plantlocated side by side in North-west Sri Lanka
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Power Generation with grown biomass is encouraged, not significantly successful
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Picture: Dendro Power Plant, Walapane,Courtesy of LTL Ltd