16 July 2024 01:35 am Views - 752
Sri Lanka’s commercial sector can breathe a sigh of relief as the Public Utilities Commission of Sri Lanka (PUCSL) approved the awaited reduction in electricity tariffs. The announcement made yesterday brings the much-needed financial support to industries and hotels.
After having lobbied for lower electricity costs, the PUCSL’s decision comes as a welcome change. Under the new tariff structure, hotels will be able to reap the benefit of a 26 percent reduction, while industries will see a 25.3 percent decrease. The overall reduction in electricity tariffs stands at 22.49 percent.
The new rates are effective from today, July 16.
The move is a notable shift from the series of tariff hikes imposed, which saw electricity costs soar by as much as 400 percent. The hike made it increasingly difficult for the industrial and tourism sectors to stay afloat.
The tourism sector, which had managed to be categorised under the ‘industry category’ for electricity tariffs, after several episodes of tariff increases found itself paying exorbitant rates as it did when under the ‘super-tariff’ scheme.
The private sector has been vocal about the overestimated tariff forecasts by the Ceylon Electricity Board, which led to unnecessarily high retail and industrial tariffs. However, their concerns did not receive much attention until now.
Sri Lanka’s apparel sector, a major contributor to the nation’s export revenue, has repeatedly emphasised the need for a rigorous implementation of a least-cost generation plan. This, it argues, is essential for Sri Lanka to stay competitive, with the regions adopting low-cost generation and offering lower tariffs without subsidies.
The sector also urged for power purchase agreements to be based on cutting-edge technology, with price discovery conducted through transparent competitive bidding. There is a strong call for policies that support the scaling up of renewable energy, including rooftop solar, in line with the government’s goal of generating 70 percent of the country’s energy from renewable sources by 2030.
With increasing pressure from global brands for the decarbonisation of supply chains, Sri Lanka must move swiftly in adopting renewable energy solutions but at competitive prices, it said.