Sri Lanka’s Cabinet approves revised tariff for Non-Conventional Renewable Energy supplies.
Daily FT: The Cabinet of Ministers has approved the new tariff for purchasing electricity from Non-Conventional Renewable Energy (NCRE) sources. The NCRE sources include; biomass, agriculture and industrial waste, and excess power from agriculture and industrial waste of the same industry. The Standardised Power Purchase Agreement (SPPA) will continue for NCRE projects with a capacity of up to 10 MW.
The Daily FT learns that the Cabinet of Ministers approved the above tariff revisions on 1 August. The tariffs will have a non-escalable fixed rate on three tiers and it will be effective from 1 September till further notice. It will consist of a fixed rate, an operations and maintenance (O&M) rate, and a fuel rate. The three tiers are for a 20-year long period, the first tier is for eight years, the second tier is for the next 9-15 years and the third tier is for 16-20 years.
As per the latest price revision, the Ceylon Electricity Board (CEB) will now offer a non-escalable fixed rate for biomass (Dendro) in the tier-I at Rs. 17.92 per kWh, tier-II at Rs. 9.02 per kWh, tier-III at Rs. 5.95 per kWh. For biomass escalable O&M rate in the first 15 years at Rs. 2.35 per kWh and from 16 years onwards at Rs. 3.14 per kWh, whilst for biomass escalable fuel rate Rs. 23 per kWh.
The revised tariffs for agricultural and industrial waste for a non-escalable fixed rate for the three tiers are Rs. 14.95 per kWh, Rs. 9.02 per kWh, and Rs. 5.95 kWh respectively. For agricultural and industrial waste for escalable O&M rate in the first 15 years at Rs. 2.35 per kWh and from 16 years onwards Rs. 3.14 per kWh, whilst for the same technology for escalable fuel rate Rs. 14.95 per kWh.
With regards to excess power from agriculture and waste of the same industry for non-escalable fixed three-tiers are at Rs. 13.44 per kWh, Rs. 6.76 per kWh, and Rs. 4.46 per kWh respectively.
For escalable O&M rate for the same technology in the first 15 years is at Rs. 1.77 per kWh and from 16 years onwards Rs. 2.35 per kWh, whilst for the same technology for escalable fuel rate Rs. 4.98. Following the tariff revision for 2022, the escalable rate for O&M rate was 11.04% and for fuel was 9.1%.
OSL take:
The ongoing power crisis in Sri Lanka has opened up business/investment opportunities in the country’s power sector. The new opportunities in the power industry is mainly focused on the renewable energy generation sector. The government of Sri Lanka has also adopted a policy of promoting clean and sustainable energy solutions to meet the continuously increasing demand for power in the country. The growth and profits recorded by local businesses engaged in the renewable energy generation sector is indicative of the growing business potential in the respective sector. Foreign businesses/investors could confidently explore the expanding business/investment opportunities in Sri Lanka’s power industry, especially in the renewable energy generation sector.
| Article Code : | VBS/AT/27092022/X_12 |