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Sri Lankan government to bring back coal plants to the energy mix in a bid to lower long term generation costs

Sri Lankan government to bring back coal plants to the energy mix in a bid to lower long term generation costs

The Power and Renewable Energy Ministry of Sri Lanka has reportedly proposed to bring back coal power plants to the energy mix in a bid to lower long term generation costs, the Central Bank of Sri Lanka has stated. The proposal has been made amidst a need to determine the optimal energy mix.
The Ministry of Power and Renewable Energy has submitted a revised version of the new National Energy Policy and Strategies to the Cabinet of Ministers for approval, which includes coal.
“It is important to determine the optimal mix of energy sources for Sri Lanka in terms of both financial and economic costs, and thereby the long-term generation expansion plan for the country, without considering power projects in an ad-hoc manner,” the Central Bank has stated in its 2017 annual report.
“The government is currently in the process of evaluating this proposal to decide on the most appropriate technology for coal power plants in the country.
“The preferred fuel options for power generation recommended therein are hydro, fuel-oil, coal, LNG, solar, wind and biomass.”
According to a local media report, there have been suggestions that coal and liquefied natural gas should comprise about 30 percent of the sector, large hydro and renewables that can be dispatched about the same and the balance from less reliable sources and residual oil, which is a by-product of refining.
The Central Bank has stated that the state-run Ceylon Electricity Board (CEB) has proposed two 300 MW coal plants which are not in a currently approved longer term generation expansion plan.
“The government is currently in the process of evaluating this proposal to decide on the most appropriate technology for coal power plants in the country,” the Central Bank has stated.

OSL take:

The proposal by the Power and Renewable Energy Ministry of Sri Lanka to bring back coal power plants to add to the energy mix to generate low cost power in the island nation would undoubtedly open up many investment opportunities in the country’s power and energy sector. The prediction of a looming power crisis in the country by 2020 has made Sri Lanka’s power and energy sector a viable investment opportunity.

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Article Code : VBS/AT/04052018/Z_3

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