Passing on burden to consumers not a solution to power crisis: renewable energy stakeholders

• CEB issues would ease if electricity tariff increased by over 400%
• Not realistic to pass on burden to already struggling consumers
• Stressed need to support renewable energy players
• Calls on CEB to get house in order by trimming bloated workforce

The Ceylon Electricity Board (CEB) would need to increase electricity tariffs by over 400 percent, if it is to come out of its mountain of issues. While burdening the consumers for decades of mismanagement in the CEB is unrealistic, the company must look to get its house in order at the earliest, the Renewable Energy Associations said. 

Passing on the cost of mismanagement to already struggling consumers is in no way correct, a group of associations in the power sector said yesterday, asserting it is time for the CEB to own up to its mistakes and actively look at the options that benefit the nation as a whole.

To trim losses, the CEB and relevant authorities are considering increasing electricity tariffs. The increase will become unbearable to the average consumer, given the escalation of the cost of living 
in the country.

According to the renewable energy sector, the proposed 100 percent increase in electricity tariff will not do much in helping the CEB, if it will continue to operate in its old ways, safeguarding the interest of few segments, instead of considering the well-being of the country.

Calculations by the renewable energy operators show that a 100 percent increase in electricity tariff will increase the revenue of the CEB from Rs.289 billion to Rs.578 billion. 

The estimated income for the financial year 2022/2023 for the CEB is of Rs.289 billion and the mismanagement would result in a loss of about Rs.650 million.

“For the CEB to survive consumer tariff must be increased by 325 percent and for the country to survive the consumer tariff must be increased to at least 405 percent,” Windpower Association Secretary Manjula Perera said.
He made the comments while addressing a joint press conference organised by the Renewable Energy Associations in the country.

An obvious way forward to help solve the ongoing power crisis in the country is to support renewable energy operators, an effort that has seen poor effort and progress by the relevant authorities. In the last eight months, the CEB has not settled the Rs.22 billion it owes to the renewable energy operators. 

“If renewable energy was allowed, the CEB could have managed without such price increases.
“The non-payment brought the industry to its knees, posing a serious threat of not being able to pay salaries to about 7000 employees, potentially leading to a severe social crisis,” Perera said.

As a result, the national grid risks losing 1250.9 Megawatts (MW) of power generated by renewable energy developers, he added.

While reiterating the need to focus on the 70 percent renewable energy agenda by 2030, the associations stressed the need to increase contribution from renewable energy to be increased from 13 percent to 25 percent within the next two years through a rapid programme. 

Doing so will allow at least Rs.75 billion to be saved, according to the associations.

Other measures include introducing US dollar tariffs to exporters to reduce the CEB US dollar exposure and restructuring the CEB with 25,000 employees. 

The total loss of Rs.650 billion could be bought down to Rs.250 billion, the associations said.