USAID SARI Energy Countries

Sri Lanka

Energy Sector Overview

Energy supply in Sri Lanka is mainly based on three primary resources, namely, biomass, petroleum and hydroelectricity. In 2004, hydro-electricity production in the country accounted for 706.9 kTOE (thousand tonnes of oil equivalent) while the biomass-based energy supply was 4,494.4 kTOE. Approximately 4,304.2 kTOE was provided by imported crude oil and finished petroleum products such as diesel and liquefied petroleum gas (LPG). Additionally, the non-conventional resources (mainly wind) provided 3.5 kTOE of primary energy, giving an aggregate primary energy supply of approximately 9,509.1 kTOE. The 2004 primary energy contributions to national energy supply were 47.3% from biomass, 45.3% from crude oil and petroleum products and 7.4% from hydroelectricity. The use of non-conventional energy resources in Sri Lanka is of a relatively smaller scale and therefore its contribution is presently of low significance in the macro energy picture. The generating facilities available in the country at present (2006) which are connected to the CEB Transmission Grid are as follows:-

Description

Capacity (MW)

CEB Hydro Plants

1207

CEB Thermal Plants

548

CEB Wind Power Plants

3

CEB Total

1758

Private Thermal Plants

565

Private Mini-Hydro Plants

110

Private Renewable

2

Private Total

677

Total Capacity

2435

With the increasing demand for energy to provide for the country’s economic and social development, total primary energy demand is expected to increase to about 15,000 kTOE by the year 2020 at an average annual growth rate of about 3%.  Electricity and petroleum sub-sectors are likely to record higher annual growth rates of about 7-8%. Hydro electricity production and biomass-based energy supplies, which are the only large-scale indigenous primary energy resources available in Sri Lanka, are expected to increase only marginally in the near future. This is mainly due to limitations in further hydropower development owing to lower economic viability of exploiting the remaining large hydropower sites and limited use of biomass with gradually increasing standard of living of the population. This means that the country’s incremental primary energy requirements need to be supplied mainly by imported fossil fuels in the medium term. In the longer term, possible development of indigenous petroleum resources and accelerated development of non-conventional renewable energy are likely to make a significant change in Sri Lanka’s mix of primary energy resources.
Milestones of Electricity Supply in Sri Lanka

Year

Description

1895

M/S. Boustead Brothers, a private company brought diesel generators from England and supplied electricity to few mercantile firms in Fort Colombo.

1901

Geological survey by Mr. DJ Wimalasurendra, Junior Engineer attached to the Department of public works and a Foreigner, another private firm (United Planters) formed to distribute Electricity.

1905

Kandy Municipal area lighted by Kandy Lighting company, (a Subsidiary of Colombo Gas & Water Co.)

1912

First hydro electrical scheme in Nuwara Eliya designed and entrusted to Mr. DJ Wimalasurendra. (It took 9 year due to lack of support from his superiors). A model hydropower electricity scheme was designed by Mr. Wimalasurendra utilizing Aberdeen-Laxapana Falls & by damming the Kehelgamu Oya.

1926

A separate department for Electricity was formed under a Deputy Director of P.W.D / (01-10-1926).

1928

To meet expanding demand, colonial government decide to set up a Thermal power Station. (Steam generating power station named after the Governor Sri Herbert Stanley who declared open on 5th March)

1931

A booklet on safety published.

1935

A two –tier tariff system introduced. Under the Electricity Board ordinance No.35 of 1935, the Electricity Board of Ceylon was established.

1937

The Board that commenced functioning from 01st, 1936 was dissolved in May 1937 by the Electricity Board of Ceylon (Dissolution) ordinance No. 10 of 1937. And all responsibilities, functions, commitments etc; of the Board transferred to its former department by renaming as the Department of Government Electrical Undertakings. ( DGEU)

1946

The diesel generator plant commissioned at Wellawatta under the admiralty vested in DGEU Decentralization of DGEU (Norton Bridge, Nuwara Eliya, Diyatalawa, Panadura, Negombo, Avissawella and Peradeniya).

1950

DGEU set up the Jaffna Electricity Scheme. Surplus of KKS Cement Factory Diesel plant brought by the Department & distributed to the public.

1953

Second Stage of Laxapana Hydro Electricity scheme commenced.

1954

Commissioning of inginiyagala Power Station

1968

Uda Walawe Power Station commissioned.

1981

Bowatenna PS 40 MW. Kelanitissa Gas Turbine PS 120 MW.

1983

Canyon PS 30 MW.

1984

Sapugaskanda Diesel PS 80 MW commissioned.

1985

Victoria PS (Stage 2) 70MW. Kotmale (Stage1) 67 MW.

1986

Kotmale PS (Stage 2) 67 MW x2, Nilambe PS 3.2 MW.

1988

Ranganigala PS (Stage 2) 67 MW x2, Nilambe PS 3.2 MW.

1989

K.K.S Cement Factory Power Station 8.2 MW

1992

Samanalawewa Hydro Electricity Power Project 60 MW x 2

1997

Kelanitissa Gas Turbines 115 MW, Sapugaskanda Diesel PS 10MW x 4, Lakdhanavi (Pvt) Ltd. 16.8 MW.

1998

Sapugaskanda Diesel Ext. PS 10MW x 4 commissioned.

2000

Colombo Power (Pvt) Ltd 64 MW commissioned.

2002

Ace Power Matara and Horana 20MW each commissioned.

2003

AES Kelanitissa Combined Cycle Power Project 163 MW

2005

Construction of the Upper Kotmale Hydro Power Station started.

2006

Construction of the Puttalum Coral Power Plant started.

2007

Construction of the Kerawalapitiya Combined Cycle started.

 Objectives and Functions of Ministry of Power and Energy

  • Implementation of Policies, Plans and Program in respect of Power and Energy
  • Investigation, Planning, implementation and co-ordination of energy matters
  • Investigation, planning and development of electricity facilities throughout the island including hydro power, thermal power, mini-hydro and coal power etc.
  • Rural electrification
  • Renewable energy development
  • Development of a sound, adequate and uniform electricity policy for the control, regulation and utilization of national power resources
  • Energy efficiency, demand management etc.

Departments and Statutory Institutions

  • Ceylon Electricity Board
  • Energy Conservation Fund
  • Lanka Electricity Company (Pvt) Ltd
  • Lanka Transformers Ltd
  • Sri Lanka Sustainable Energy Authority

Key policy framework

  • National Energy Policy and Strategy of Sri Lanka: It spells out the implementing strategies, specific targets and milestones through which the Government of Sri Lanka and its people would endeavor to develop and manage the energy sector in the coming years in order to facilitate achieving its millennium development goals.
  • Elevated “Energy Conservation fund” to become the “Sri Lanka Sustainable Energy Authority” by Act No 35 of 2007 with the objectives to conserve and development of Renewable energy resources in Sri Lanka , to declare the areas suitable for development of renewable energy as Renewable Energy
  • Development areas, to develop and to provide facilities for Renewable Energy projects, to implement strategies and projects for Energy efficiency and energy conservation (ADB and JICA have committed funds for capacity building of the SEA).
  • Government took the decision on 12.09.2007 to use only COAL and LNG for all future long-term thermal power generating plants.
  • National Environmental Act (NEA): According to the National Environmental Act (NEA), there exists a mandatory requirement to obtain the environmental clearance from the Central Environmental Authority or a Project Approving Agency (PAA) which authorized under the NEA for any kind of power plants. There are two classifications.
  • Thermal Power Plants exceeding 25 MW
  • Hydro Power Plants exceeding 50 MW

The Environmental Impact Assessments (EIA) is a comprehensive study about the environmental impacts of the proposed project. Public comments are welcome at EIA stage for evaluation. Initial Environmental Examination (IEE) is not as comprehensive as EIA and are not entertained public for comments. The Ministry of Environment designates the Ministry of Power & Energy as PAA as per the NEA. Therefore, the Ministry of Power & Energy has established an environment cell in the Planning Division to implement the requirements of NEA

Power Sector Reforms

A. Status at the Beginning of 2007

The Electricity Reform Act No.28 of 2002 was enacted in December 2002 to regulate and restructure the electricity industry in Sri Lanka. The Public Utilities Commission Act, No 35 of 2002 was also enacted in December 2002 and the Public Utilities Commission of Sri Lanka (PUCSL) has been established in July 2003. Certain provisions of the Electricity Reforms Act No. 28 of 2002 were implemented when the Government decided to review the on-going power sector reform process in 2005. The review process endorsed the establishment of PUCSL to regulate the power sector whilst proposing a modification to the industry structure, outlined in the Electricity Reform Act No. 28 of 2002. Accordingly, Sri Lanka Electricity bill and the Ceylon Electricity Board (CEB) (Amendment) bill were drafted. However, certain concerns were articulated on these two bills by the Supreme Court and as a result the Government decided to evolve a new power sector reforms process within the existing industry framework.

A three member committee was appointed in October 2006 by the Secretary to the Ministry of Power and Energy on the advice of the Hon. Minister of Power and Energy to evolve a Power Sector Reform process within the existing framework. The Committee report was submitted in November 2006 which recommended introducing regulatory reforms as an initial step, by empowering Public Utilities Commission of Sri Lanka (PUCSL) established under Public Utilities Commission Act No. 35 of 2002, to regulate the power sector. The Committee also recommended introducing an appropriate internal structure within the CEB to facilitate regulation and to drive performance improvements.

The approval of the Cabinet was granted in November 2006 to proceed with the regulatory reforms and Legal Draftsmen to prepare necessary amendments to ‘Sri Lanka Electricity Bill’ in this respect.

B. Achievements in 2007

The necessary amendments to the Sri Lanka Electricity Bill have been finalized by the Legal Draftsmen. The draft bill has been submitted to Attorney General Department for clearance. Following the legal clearance from the Attorney General, the Sri Lanka Electricity Bill will be submitted for the Cabinet approval and is expected to place before the Parliament for enactment during 2007. In parallel with the legislation process action would be taken to create an environment to facilitate effective regulation in the Ceylon Electricity Board and other power sector institutions. This process will be carried out during 2007 and first quarter of 2008.

C. Expected Activities to be carried out in 2008

On enactment of Sri Lanka Electricity Bill, a licensing regime would be established. The Ceylon Electricity Board will be initially issued with interim licenses for a period of 6 months by the PUCSL. During this period a licensing process would be carried out for issuance of permanent licenses to carry out is core business functions under regulatory purview in the power sector in order to safeguard consumer interests, establish transparency, and attract investments and to ensure appropriate balance between consumers, policy makers and the operators. In parallel with the regulatory reforms, activities relating to creating an environment within the Ceylon Electricity Board (CEB) to facilitate regulation and to drive performance improvements would be completed prior to issuance of permanent licenses.

D. Future Development

Following are the key changes envisaged in the power sector on enactment and implementation of the Sri Lanka Electricity Bill:-

  1. Establishment of legislative framework to empower PUCSL to regulate the Power Sector, including CEB.
  2. A licensing regime would be established where CEB and other operators are required to obtain a licenses from PUCSL to generate, transmit, distribute and supply electricity.
  3. PUCSL will determine tariffs, following tariff filing and a public hearing process.
  4. The CEB will remain as a public corporation and will be issued with multiple licenses for generation, transmission, distribution and supply of electricity. However licensing condition would necessitate respective licensed functions of the CEB to be ‘ring fenced’. This would allow separation of accounts and facilitate effective performance monitoring.
  5. Functional Business Units (FBUs) would be established within the CEB to handle respective licensed functions. Internal power trading system would be established to facilitate power trading among the FBUs.
  6. Regulator (PUCSL) will be responsible to safeguard interests of the consumers, investors, policy markers and all operators of the power industry.

Generation

I) Thermal Power Generation

In FY 2006, 50.6% of the country’s requirement came from Thermal Energy. The Private Power Producers (IPPs) generated 3081 GWh or 32.8% of the energy requirement of the country. The forecast made by the Ceylon Electricity Board (CEB) on the growth of electricity demand in the country projects a growth between 7 to 8 percent in the next decade. This is mainly due to rapid growth in some sectors of industry and the accelerated efforts in electrification. However, the growth in a particular year may increase but it is likely to remain as predicted over a longer period of time.

A. Coal Power Development

1. Puttalam Coal Power Project
First stage of the 3 x 300 Mw coal fired power plant, consisting of a 300 MW generating unit and infrastructure facilities for the total 900 MW plant will be constructed under Puttalam Coal Power Project at Norochcholai in Puttalam District. The contract was awarded to China National Machinery & Equipment Import & Export Corporation (CMEC), and was signed in March 2006, between the Ceylon Electricity Board and CMEC, a Chinese Government owned company. A loan of USD 455 Million was granted to the GOSL by the Government of China through EXIM Bank of China. Expected date of Commissioning of the Project is January 2012.
Acquisition of lands for the Power Station and Resettlement sites has been completed. Electricity supply to the Power Plant site has also been completed by construction of a 1.75km 33kV line and a 160kVA transformer.

12. Trincomalee Coal Power Project
A Memorandum of Agreement was signed between the Government of Sri Lanka, Ceylon Electricity Board and NTPC Limited (a fully Government owned enterprise in India) on 29th December 2006 for implementation of the Trincomalee 500 MW Coal fired Power Plant on the basis of a Joint Venture Company between the NTPC Ltd. and Ceylon Electricity Board. Several options for location of the power plant were studied jointly with the Indian counterparts, and finalization of the site is expected in October 2007. In the meanwhile, preparation of the agreements related to incorporation of the Joint Venture Company and Power Purchases are in progress. CEB has also initiated action for a study on Coal Supply Logistics for this project as well as other coal-fired power plants.

B. Furnace Oil Fired Power Plant

1. Kerawalapitiya Combined Cycle Power Project
CEB has entered in to a Power Purchase Agreement with West Coast Power (Private) Limited in January 2007 to establish a 270 MW Furnace Oil Fired Combined Cycle Power Plant at Kerawalapititya on Built-Own-Operate-Transfer basis. Site filling works has now been completed and the concrete piling works are on progress. Out of the total, 100 MW will be through Gas Turbines. Total Combined Cycle Power Plant of 270 MW capacity will be operational from March 2010.

C. LNG Development  

1. LNG fired 300 MW Combined Cycle Power Plant at Kerawalapitiya
Government of Sri Lanka has decided to establish the second 300 MW Combined Cycle Power Plant at Kerawalapitiya. Mitsubishi Corporation of Japan was nominated as the developer. Further, Government of Sri Lanka took a policy decision in August 2007 to use only LNG or COAL for all future long-term thermal power generating plants. Further, GoSL has decided to nominate the Mitsubishi Corporation of Japan, the largest LNG handling establishment in the region, to develop LNG facilities in Sri Lanka as the Japanese Government has agreed that the JBIC will finance the project on concessionary terms. Mitsubishi was nominated to furnish technical & commercial proposals for the consideration of the Government of Sri Lanka to secure uninterrupted supply of LNG in adequate quantities at an agreed price formula for 15 years and to develop the LNG infrastructure facility including jetty, unloading terminal LNG pipelines, Storage tanks, degassifier, Natural Gas supply pipes to Kerawalapitiya and Kelenitissa power Plants etc.

II) Hydro Power Generation

The CEB Hydro Power Stations contributed 4289 GWh or 45.7% of energy during 2006. Hydro Power came from:-

  1. Mahaweli Complex
  2. Laxapana Complex
  3. Samanalawewa Power Station
  4. Kukuleganga Power Station
  5. Three Mini Hydro Power Stations at:-
    1. Inginiyagala,
    2. Udawalawe and
    3. Nilambe.

1. Kukuleganga Power Station
Small Hydro producers generated 346 GWh or 3.7% of energy during the year 2006. The Kukuleganga Hydro Power Plant with an installed capacity of 70 MW was commissioned and ceremonially opened on 19th September 2003. This is particularly a significant achievement which enhanced the CEB’s hydro generation capacity and is the first Hydro Power Plant commissioned after the commissioning of Samanalawewa Power Plant in 1992.

2. Upper Kotmale Hydro Power Project
The construction of 150 MW Upper Kotmale Hydropower Project has already commenced, it will annually generate 409 GWh. The total estimated costs of the Project are JY 23,329 million and Rs. 12,828 million. The project is expected to complete by December 2010.  The Contract Lot 1 for Preparatory Work between CEB and Maeda Corporation, Japan was signed in July 2005 and work commenced in September 2005.  Transmission line route survey was completed in August 2006. The 33 kV construction supply was energized in April 2007. The route has now been finalized and D-Notices were issued in August 2007.

Transmission

2

1. Power Sector Development Project (Part C) Transmission
Power Sector Development Project is funded by the Asian Development Bank. The total project cost is expected to be Rs. 2,981 million.

Under Lot A of this Project, construction of Ambalangoda, Pannala and Aniyakanda Grid Substations will be done. In addition, Deniyaya Grid Subation will be augmented to 63 MVA and Bolawatta Grid Substation is also to be rehabilitated. Works of Lot A has commenced in November 2006 and expected to complete by December 2008.

Under Lot B of this Project, construction of 47.5 km of 132kV Transmission Lines from Matugama GSS to Ambalangoda GSS, Polpithimukalana to Aniyakankda GSS and Maningala to Pannala GSS will be done. Furthermore, the earth conductors will be replaced with OPGW conductors in 104km of existing transmission lines.

2.  Kerawalapitiya Power Station to Kotugoda Transmission Line
The scope of work consists of Construction of 220 kV Gas Insulated indoor Substation at Kerawalapitiya and 220 kV outdoor Substation at Kotugoda. In addition, a 20 km/220 kV twin Zebra conductor transmission line from Kerawalapitiya power station to Kotugoda grid substation is to be constructed under this Project. The total Project cost of Rs. 3,100 million is funded by JBIC (JY 2,938 million) and CEB (Rs. 874 million). However, this loan was closed on 22nd May 2007 and funds to be re-arranged by the GOSL. At present, the whole of the Project cost is met by the CEB.

The Contract for the Lot A (Grid Substations) was signed in September 2007, and the contract for Lot B (Transmission lines) was signed in February 2007. The Project is to complete by March 2009. This project is required to connect the proposed 300 MW Combined Cycle Power Plant at Kerawalapitiya to CEB transmission net work.

3. Vavuniya-Kilinochchi Transmission Project
Scope of work in this Project consists of construction of 132/33 kV Grid Substation at Kilinochchi and construction 67 km of 132 kV transmission line from Vavuniya to Kilinochchi. De-mining work in Project area will be done by RRR Ministry. The total Project cost of Rs. 1,686 million is funded by JBIC (J¥ 1,157 million) and CEB (Rs. 585 million). This project will reinforce the transmission network of CEB with reconstruction of the damaged transmission system to Kilinochchi area and enhance the distribution capacity in Kilinochchci area by 31.5 MVA.

4. Indo Sri Lanka Grid Inter Connection Project (2011)
Plan for a transmission interconnection between India and Sri Lanka has been under consideration for some time having been contemplated since 1970. As part of the technical assistance provided through United State Agency for International Development (USAID/South Asia Regional Initiative on Energy Project), the concept for transmission interconnection between India and Sri Lanka was reviewed and a pre feasibility study was conducted in 2002, followed by the recent study by Power Grid Corporation of India Ltd (PGCIL). Both these studies point to the feasibility of a short –term link of 500MW and a medium and long-term link of 1000MW between the two countries. This interconnection would allow bilateral power exchanges between India’s Southern transmission region and the electric power system in Sri Lanka.
Based on investment cost and cost of power deliver to Sri Lanka, construction of high voltage direct current (HVDC) link from Madurai to Anuradhapura was considered as the preferred option. The tentative cost as per the initial studies of Power Grid Corporation of India would be as follows;
Long term link/medium term link (1000MW) = $ 430 million
Short term link (500MW) = $ 340 million
The construction period as per the findings of Power Grid Corporation would be 36 to 40 months. The rationale for this interconnection is that it provides opportunities to enhance system reliability and power between two power systems of both India and Sri Lanka.

5. Kelaniya Grid Substation Augmentation Project
This Project will erect a 31 MVA 132/33 kV transformer and six switchgear bays and one transformer bay at Kelaniya Grid Substation. The total Project cost of Rs. 235 million is funded by CEB. The tenders were invited in December 2006. The Tenders are being processed by a Cabinet-Appointed Procurement Committee. Completion of the work is expected in April 2009.

6. New Galle Transmission Development Project
Under the Lot A of this Project three 31 MVA 132/33 kV transformer and nine
132 kV switchgear bays, fifteen 33 kV switchgear bays and 20 MVAR Capacitor Banks will be installed at New Galle Grid Substation. Under the Lot B of this Project, 40 km of 132 kV double circuit Zebra Conductor transmission line from Ambalangoda grid substation to Galle Grid substation will be constructed. The project cost is funded by the Nordic Investment Bank and CEB. With due approvals, a proposal has been invited for these works. In the meanwhile, Environmental Clearance of transmission line has been obtained, and the preliminary surveys have been completed by CEB. Bid Proposal Evaluation has now been completed and tender negotiations have to be done.
The project is expected to complete in June 2009. This Project will improve the reliability of electricity supply in Galle area.

7. Beliatta Grid Substation Project
Under this Project Construction of 63 MVA 132/33kV grid substation at Beliatta and 10 km. 132kV Transmission Line to Beliatta will be undertaken. The project cost of Rs. 771 million is funded by the Government. Works related to land and designs are in progress.
The project is expected to complete in October 2009. This Project will improve the reliability of electricity supply in Hambantota area.

Distribution

Ceylon Electricity Board is the main electricity utility that is responsible for the generation, transmission and 90% of the distribution of electricity in the country. The Lanka Electricity Company (Pvt) Ltd (LECO) that is a subsidiary of the CEB attends to the balance 10% of the distribution in some of the urban coastal areas. A total of 4,198,200 customers enjoy the facility of electricity and the electrification level of the country is 77% of the total households in mid 2007. The CEB distribution system comprises of 17,101 grid & distribution substations that are fed with 25,365 km of transmission & medium voltage distribution lines. The total low voltage network constitutes of 85,886 km of overhead & under ground lines that provide electricity to 3,763,500 customers by mid 2007 for domestic, industrial & commercial purposes. At the commencement of year 2007 distribution losses in the electricity network were found to be about 13% and plans for expansion of electrification especially into rural areas of the country required strategies for bringing down losses to below 10% in line with international standards.

3Strategies were formulated to augment & strengthen network in order to reduce losses while improving power quality & reliability through extensive studies. This exercise included the measurement of key performance indices and the identification of critical success factors that are vital for implementation in order to improve performance.

The table indicates the medium voltage development work planned under the Project Conflict Affected Area Rehabilitation Program (CAARP) & the Medium Voltage Distribution Development Plan (2004- 2013).

Item

Quantity

Cost (Rs million)

Region 1

Region 2

Region 3

Region 4

Express & Medium Voltage Lines - Km

237.5

62.5

81

187

3325

Distribution Gantries -  Nos.

5

8

10

5

800

Medium Voltage Reconductoring - Km

26.5

48.6

112

48

270

New Primary Substations & Augmentation - Nos.

8

2

3

5

3540

Total

 

 

 

 

7935

Rural Electrification

Many rural electrification schemes have been completed up to year 2007 electrifying 79% of the total households in the island with funds received from various lending agencies. The Government of Sri Lanka attaches great importance to rural electrification with a vision to accelerate the work in order to achieve an electrification level of 85% by the year 2010.

4

The Rural Electrification Project RE6 presently ongoing at a cost of US Dollars 52 million with the assistance from the ADB envisages electrification of 700 schemes in all provinces of the country for socio economic development of the rural regions. About 150,000 consumers are expected to be directly benefited from the project that has a progress of 88% at present with the balance work expected to be completed by year 2008.

The Government of the People’s Republic of China provided a loan of US Dollars 24 million for electrification of 400 schemes in several regions of the country to which electricity had not been extended in the past. The construction work of this project RE7 was carried out by a turn key contractor from China completing the work entrusted to them well within the scheduled time and the balance work is being carried out by the CEB with their own & contract construction force. About 75,000 rural households have benefited by this project which is now nearing completion. The table below gives the rural electrification schemes completed upto September 2007.

Province

Schemes Proposed

Schemes Completed

Southern Province

1296

914

North Central Province

658

589

Central Province

1416

1143

Uva Province

319

138

West South Province

765

317

West North Province

319

170

Eastern Province

525

407

Sabaragamuwa Province

910

601

North Western Province

913

626

Northern Province

78

27

Total

7199

4932

Further negotiations are being carried out with the USA , India, China & Kuwait by the Ministry of Power & Energy and the CEB for the funding of the future projects RE8 , RE 9, RE 10, RE11 & RE 12 to be formulated in order to provide electricity supply to about 350,000 remote consumers to uplift rural economy & social development. The Millennium Challenge Account of the USA is expected to fund the project RE8 to be launched at a cost of about US Dollars 25 million in order to provide direct & indirect benefits to about 30,000 households in the Northern & Eastern provinces & boundary villages.

The project RE9 expected to be funded by the KUWAIT fund has been configured with economic development in view to serve distant rural regions in need of industry for socio economic reasons. The cost of this project is expected to be US Dollars 17 million with direct benefits to about 30,000 rural households.

The project RE10 has been planned to be constructed with funds from the People’s Republic of China at a cost of US dollars 54 million the construction work being expected to be carried out by a turn key contractor from china. Project is expected to bring many social & economic benefits to more than 100,000 rural households.

The future energy policy is aimed at serving the needs for service & economy related activities of the country with a study on the various alternative forms of energy available and its development. Also considered is the environmental impact of energy generation & use promoting electricity for economic & environmental reasons as a clean & safe form of energy for consumption.

Renewable Energy Development

In order to promote renewable energy as a future energy source, action has been taken to introduce a new tariff scheme for renewable energy sources.
Accordingly, Cabinet approval was obtained for a cost based, technology specific three-tiered tariff for the following three technologies:

  • Small Hydro
  • Wind
  • Bio Mass (Sustainably grown fuel wood)

Action has also been taken to obtain Cabinet approval for cost based, technology specific three-tiered tariff for the following input energy resources as well.

  • Agro and industrial waste
  • Municipal Waste
  • Waste heat recovery

A. Small Hydro Power Development

Development of small hydropower projects can be considered as the most promising commercially viable renewable energy source at present. Therefore, many projects have been commissioned and connected to the national grid under the Standardized PPA. A summary of details of the small hydropower projects by the end September 2007 is shown below:

Description

Number of Projects

 Capacity MW

In operation

59

112

SPPA signed (some are under construction)

35

86

Letters of Intent issued

69

118

B. Wind Power Development

CEB has received several project proposals from the private sector under Standardized PPA to develop wind power projects in Kalpitiya area. That region was considered for initial development due to higher wind potential throughout the year. Further 50 MW wind power plant has been considered under a separate power purchase agreement for development. A summary of details of the small wind power projects by the end September 2007 is shown below:

Description

Number of Projects

 Capacity MW

Letters of Intent issued

4

33.8

Under Consideration

1

50

C. Dendro Power (Biomass: Sustainably grown fuel wood)

Bio mass based electricity generation can supply firm energy to the national power system like the conventional thermal power plants. Furthermore, it offers multi dimensional non-energy benefits to rural socio economic development and deserves an incentive price, to attract potential private sector developers to invest in the industry. Accordingly, the Government has granted cost based, technology specific three-tiered tariff for the bio mass power generation. A summary of details of the Dendro power projects by the end September 2007 is shown below:

Description

Number of Projects

 Capacity MW

In operation

2

2.0

Letter of Intent issued

7

18.55

 D. Power from Municipal Solid Waste

Management and disposal of municipal solid waste has become a problem to the Local Authorities. It is now considered that the generation of power using solid waste in Local Authority areas could be a satisfactory solution for this problem. Considering this as a useful energy source, action has been taken to issue letter of intents to generate power from municipal solid waste.

Description

Number of Projects

 Capacity MW

Letter of Intent issued

11

89.6


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