Power developer highlights need for long-term tariffs to draw investments

A leading mini-hydro power developer in the country says the government should implement a proper long-term tariff mechanism to boost investments into the country’s energy sector. 

“The government should, post-haste, decide on long-term tariffs for the next 20 years at least  to boost investment in the sector,” Panasaian Power PLC Chairman/CEO Prathap Ramanujam said in the company’s latest annual report released to the Colombo Stock Exchange last week.  

“Investors will be reluctant to step forward to invest in the renewable sector without having a long-term view of the tariffs and the assurance that no ad hoc changes will be made,” he said. 

Sri Lanka’s energy sector currently is in a state of disarray largely due to a tug of war between the engineers of the Ceylon Electricity Board (CEB) and the power sector regulator Public Utilities Commission of Sri Lanka (PUCSL) over the country’s future energy mix, with the CEB engineers favouring coal-fired power plants and the PUCSL opting for LNG in the short-term and renewables in the long-term.

This deadlock has led to fears that Sri Lanka may experience blackouts in a couple of years’ time as the country has not commissioned a single large-scale power plant since 2014, despite the steady growth in demand.

Meanwhile Ramanujam noted that the government’s ambitious plans to totally rely on renewable energy in the future will be difficult unless certain long-term policies are set in place. Sri Lanka has set itself some lofty goals to become energy self-sufficient by 2030, and is among the 43 countries of the Climate Vulnerable Forum that had agreed to make their electricity generation 100 percent renewable by 2050 the earliest.

Currently, renewable energy accounts for merely 36 percent of total energy consumption in the country.

Panasian Power owns and operates mini hydropower plants and supplies electricity directly to the Ceylon Electricity Board. In 2017, the company diversified into solar energy to meet its revised target of having an energy portfolio of 30MW by 2020.