Sri Lanka to allow power wheeling facility for renewable energy projects
Daily FT: The Cabinet of Ministers has approved a power wheeling facility for private entities to collectively use the Ceylon Electricity Board (CEB) transmission network to transport electricity to different locations subject to a payment of fee.
The progressive move aims to promote renewable energy adoption and boost energy self-sufficiency in Sri Lanka. The approach, known as ‘power wheeling’, allows electricity users to utilise existing supply from another location through the grid, subject to a fee, thereby reducing costs effectively.
Cabinet Co-Spokesman and Minister Bandula Gunawardena has said under the approved proposal, electricity users will be allowed to build renewable energy plants, such as mini-hydro facilities and transmit the generated power through the CEB grid to other locations owned by the same party for personal use.
He affirmed that the move is only available for renewable and non-commercial purposes. “The concept of ‘power wheeling’ was not permitted in the energy sector. Previously, companies that built small private power stations had to sell the power to the CEB at the feed-in price and buy power separately as a customer at a retail tariff,” he explained.
Highlighting the significance of the initiative, Gunawardena stated that it would enable collective use of the power grid, facilitating efficient electricity distribution to areas where it is needed.
“For example, electricity generated from a mini-hydro plant in Kithulgala can be transmitted using CEB transmission network to a factory in Ja-Ela, provided both locations are owned by the same entity,” he explained during the post-Cabinet meeting media briefing recently.
He pointed out that a committee was appointed to conduct a detailed study on the matter as there is currently no legal provision for implementing this system.
Upon the recommendations by the Committee, the proposal was presented by Power and Energy Minister Kanchana Wijesekera.
OSL take:
Sri Lanka’s power industry, especially the renewable energy generation sector, has become a hotspot for business/investment opportunities given the increasing demand for power with the expanding economic activities in the country. The Sri Lankan government’s policy to increase the country’s renewable energy component to 70% of thr total energy mix have also helped boost the opportunities in the power industry. The country is on the path to becoming a regional hub and thereby create an increasing demand for power and energy. The growth and business potential in Sri Lanka’s renewable energy generation sector has attracted the attention of many foreign businesses to the power industry, including the likes of Adani Green Energy as well as by the profits recorded by local businesses engaged in the renewable energy generation sector. Given Sri Lanka’s overall growth path, foreign businesses/investors could confidently explore the many business/investment opportunities in the country’s renewable energy generation sector while also explore the possibilities of forming collaborations with local businesses with the aim of further expansion.