Features
The correct method of costing electricity
By Dr Tilak Siyambalapitiya
At a time the entire society is confused about who does what in determining electricity costs and prices, it would be useful for the learned and intelligent Sri Lankans to examine the correct procedure. What is written here is practiced across the civilized world, in countries where electricity generation is not a monopoly but electricity supply is still a monopoly. That includes India.
Five activities to get electricity to customer
Electricity industry comprises five businesses: electricity production, transmission, bulk supply, distribution, and retail supply. Transmission and distribution are natural monopolies, since there cannot be several companies building their own lines in the same geographic area to facilitate competition. However, electricity production, bulk supply and retail supply can be open for competition. Competition in generation can be at the initial procurement (as in Sri Lanka) or through short-term competitive contracts. They can be day-ahead competitive procurements (eg: India) or real-time competition. In Sri Lanka, electricity generation is open for private investments. If the investment is private, what is procured competitively is a “power purchase agreement. If the power plant is to be CEB’s own”, then what is procured is “a turnkey contract” to supply, install and commission a power plant. If the power plant is based on renewable energy up to 10 megawatt and private, electricity is purchased on feed-in-tariffs (some are competitively procured, too). For bigger renewable energy power plants, the law previously said it must be procured competitively, but a few months ago, the government changed the law to imply competition is not required.
Procurement is not the theme of this article. Once a power supply system is in place, how does one calculate the costs and then pass it down to customers in the form of tariffs?
Just like any other industry, electricity supply industry costs, too, can be divided into fixed costs and variable costs.
Fixed Costs
Fixed costs relate to the “capacity” of electricity production and delivery. A power plant built with a loan requires the loan principal and interest to be paid. The equity investment on the power plant should yield a return on investment. If the power plant is a private investment, its fixed cost are called “capacity charges” stated in the power purchase agreement in which the investors commitments to his banks and co-investors are included. Transmission and distribution lines, and various equipment at substations, too, require investments. There will be debt repayments and return on investments, too, required for such investments.
Fixed costs are independent of the amount of electricity produced. Supply of electricity requires a certain level of reliability of service to be assured. Investments on power plants, transmission lines and distribution lines should ensure the required capacity (amount of current), reliability (no power cuts, blackouts) or quality (no brownouts) are available to electricity customers.
Electricity regulators in most countries in the world review fixed costs submitted by electricity suppliers, compare with norms, examine opportunities to be progressively “cost efficient” and then approve the fixed costs. Fixed costs so approved include depreciation, interest costs, maintenance costs, spare parts, and staff salaries, and profits. Since electricity industry cost regulation includes a pre-defined profit, a return on investment is also included in the fixed costs. Since fixed costs do not vary rapidly, they are approved, upfront, for three years or five years. This time-interval, for which fixed costs are approved, is called the “tariff period”. Sri Lanka, from 2011 to 2020, followed a five-year tariff period, and since 2021, follows a three-year tariff period. Presently, the active tariff period is 2021-2023.
So, fixed costs are totally independent of how much of electricity is produced. Fixed costs are incurred anyway, literally, even if a single unit of electricity is not produced or purchased by customers.
Variable costs
Variable costs are proportional to the energy delivered. Energy is measured in kilowatthour (commonly called units of electricity). Fuel costs are incurred when a thermal power plant, or a biomass power plant, is operated. For renewable energy power plants, such as hydropower, wind and solar energy, there are no fuel costs. Their variable costs, that mean costs that depend on the quantity of energy delivered, if any, are very small.
When a thermal power plant operates, there will be costs on fuel, lubricating oil and other maintenance expenses. These costs are expressed, based on one unit of electricity (a kilowatt hour). If the power plant is private, the price paid per unit of electricity is based on the price of fuel, as stated in the respective agreement. Almost all agreements do not carry any mark-up on production costs. Investor’s profits are built into the fixed costs. For renewable energy power plants that sell electricity to the grid, without any storage, their costs, too, is based on electricity produced to the grid. Since generation costs depend heavily on hydrology and fuel prices, variable costs are required to be submitted for approval, once in 12-months, but represented in two six-monthly intervals, i.e. January-June and July-December.
Regulatory procedure and timetable to approve costs and prices
The Electricity Act 2009 specifies that a “tariff methodology” must be established by the regulator, PUCSL. This “tariff methodology” is available in the public domain for anyone to study. Electricity transmission and distribution license holders (currently CEB and LECO) must submit their costs, based on a specific format, which are then reviewed and approved by PUCSL. Submissions for transmission and distribution must be once in three years. These formats, too, are available on-line for public to view. This has been done for the window 2021-2023.
The timetable for cost and price review and who submits what, in which format, are all defined in the “Electricity (Procedure for Review and Adjustment of Tariffs) Rules No. 03 of 2016”, published in Gazette No. 1978/21, dated 2nd August, 2016. For example, the rules say “On or before the last working day of April, the Licensee shall submit to the Commission the following (using the templates approved by the Commission)” and provides a list of documents. It goes on to say “On or before the last working day of May of each year the Commission shall prepare the Draft Tariff Estimates using the Tariff Methodology and post the Draft Estimated Tariffs in its Website.” None of these happen on schedule.
The timetable has been largely ignored by CEB/LECO as well as by PUCSL itself who issued the timetable. However, delayed submissions and delayed decisions have been published from time to time, about costs and prices.
Most recent Published costs
Cost estimates for 2023 have not been submitted by CEB+LECO to PUCSL, as it has been widely stated in the media. Apparently, costs have been submitted to the Ministry. Thus, we have to go by the costs approved by PUCSL for the first half and second half of 2022. Sri Lanka’s national average price of electricity, right now, is Rs 30.13 per unit, which is closer to the costs approved by PUCSL and included in electricity prices announced in August 2022. However, it is clear that the costs of the second half of 2022 of Rs 48.45 per unit, published by PUCSL, would not be covered by charging the present price of Rs 30.13 per unit.
We do have to remember that “fixed costs” include depreciation, interest payments, staff, spare parts and a fixed return on investment (i.e. profit). If CEB and LECO agree to forego the profits, the “fixed costs” will be lower. Depreciation allowed is expected to finance debt repayments related to investments and for equity for ongoing or future investments. If debts are not being repaid, what happens to the cash set aside for depreciation is a question.
Even if depreciation, interest payments and return on equity are taken out of the calculation of pure cashflow requirements, still the following questions require answers:How much of electricity is planned to be produced, in 2023, from diesel and other petroleum fuels? Actual production from these expensive oils, in 2021, was 21%. Seven years ago, the long-term plan stated that only 13% of electricity will be produced from oil in 2021. So, what happened and where did it go wrong? For 2023, the plan of 2015 said only 9% will be produced from oil, but how much does CEB plan to produce from oil and who is responsible for the gap?
At what price is oil bought to produce electricity. A barrel of diesel is now about USD 100 delivered to Colombo, and a barrel has 160 litres. A small calculation yields that a litre of diesel should be Rs 231, since there are no delivery or retail costs to be added to the import costs. Electricity production does not get oil at these actual international prices. Fuel oil should be still cheaper.
However, it is clear that the delay in getting the full quantity of coal for the Norochcholai power plant (2022-23), the absence of Sampur (was due 2021-22) and Norochcholai No 4 generator (due 2024-25) all cancelled by politicians, and numerous renewable energy power plants delayed or cancelled by various people, and the absence of a gas terminal, may require at least 28% of next year’s electricity to be produced, using the killer fuel, oil.
Once the costs are reviewed and approved, they must be converted to a price schedule. The theory of pricing is taught to all electrical engineers, and it is not too complicated to be learned by anyone.PUCSL’s own approved costs for the second half of 2022 are Rs 48.45 per unit, or about 15 US cents per unit. Internationally, 15 US cents is considered a “high” cost of electricity. If CEB was “private”, the entire Rs 48.45 would have to be paid, even for the past six months. Thus what is important first, is to get the generation costs down, which for the past six months, was an exorbitant Rs 37 or 10 US cents per unit.
Features
Mannar’s silent skies: Migratory Flamingos fall victim to power lines amid Wind Farm dispute
By Ifham Nizam
A fresh wave of concern has gripped conservationists following the reported deaths of migratory flamingos within the Vankalai Sanctuary—a globally recognised bird habitat—raising urgent questions about the ecological cost of large-scale renewable energy projects in the region.
The incident comes at a time when a fundamental rights petition, challenging the proposed wind power project, linked to India’s Adani Group, remains under examination before the Supreme Court, with environmental groups warning that the very risks they highlighted are now materialising.
At least two flamingos—believed to be part of the iconic migratory flocks that travel thousands of kilometres to reach Sri Lanka—were found dead after entanglement with high-tension transmission lines running across the sanctuary. Another bird was reportedly struggling for survival.
Professor Sampath Seneviratne, a leading ornithologist, expressed deep concern over the development, noting that such incidents are not isolated but indicative of a broader and predictable threat.
“These migratory birds depend on specific flyways that have remained unchanged for centuries. When high-risk infrastructure, like poorly planned power lines, intersect these routes, collisions become inevitable,” he said. “What we are witnessing now could be just the beginning if proper mitigation measures are not urgently implemented.”
Environmentalists argue that the Mannar region—particularly the Vankalai wetland complex—is one of the most critical stopover sites in South Asia for migratory waterbirds, including flamingos, pelicans, and various species of waders. The sanctuary’s ecological value has also supported a niche with growing eco-tourism sector, drawing birdwatchers from around the world.
Executive Director of the Centre for Environmental Justice, Dilena Pathragoda, said the incident underscores the urgency of judicial intervention and stricter environmental oversight.
“This tragedy is a direct consequence of ignoring scientifically established environmental safeguards. We have already raised these concerns before court, particularly regarding the location of transmission infrastructure within sensitive bird habitats,” Pathragoda said.
“Renewable energy cannot be pursued in isolation from ecological responsibility. If due process and proper environmental impact assessments are bypassed or diluted, then such losses are inevitable.”
Conservation groups have long cautioned that the installation of wind turbines and associated grid infrastructure—especially overhead transmission lines—within or near sensitive habitats could transform these landscapes into lethal zones for avifauna.
An environmental activist involved in the ongoing legal challenge said the latest deaths validate earlier warnings.
“This is exactly what we feared. Development is necessary, but not at the cost of biodiversity. When projects of this scale proceed without adequate ecological assessments and safeguards, the consequences are irreversible,” the activist stressed.
The debate has once again brought into focus the delicate balance between renewable energy expansion and biodiversity conservation. While wind energy is widely promoted as a clean alternative to fossil fuels, experts caution that “green” does not automatically mean “harmless.”
Professor Seneviratne emphasised that solutions do exist, including rerouting transmission lines, installing bird diverters, and conducting comprehensive migratory pathway studies prior to project approval.
“Globally, there are well-established mitigation strategies. The issue here is not the absence of knowledge, but the failure to apply it effectively,” he noted.
The timing of the incident is particularly worrying. Migratory flamingos typically remain in Sri Lanka until late April or May before embarking on their return journeys. Conservationists warn that if hazards remain unaddressed, larger flocks could face similar risks in the coming weeks.
Beyond ecological implications, experts also highlight potential economic fallout. Wildlife tourism—especially birdwatching—contributes significantly to local livelihoods in Mannar.
Repeated reports of bird deaths could deter eco-conscious travellers and damage the region’s reputation as a safe haven for migratory species.
Environmentalists are now calling for immediate intervention by authorities, including a temporary halt to high-risk operations in sensitive zones, pending a thorough environmental review.
They stress that protecting animal movement corridors—whether elephant migration routes or avian flyways—is a fundamental pillar of modern conservation.
As the controversy unfolds, one question looms large: can Sri Lanka pursue sustainable energy without sacrificing the very natural heritage that defines it?
Pathragoda added that for now, the sight of fallen flamingos in Mannar stands as a stark reminder that development, if not carefully planned, can carry a heavy and irreversible cost.
Features
‘Weaponizing’ religion in the pursuit of power
A picture of US President Donald Trump apparently being prayed for by supporters, appearing in sections of the international media, said it all loud and clear. That is, religion is being flagrantly leveraged or prostituted by politicians single-mindedly bent on furthering their power aspirations.
Although in the case of the US President the trend took on may be an exceptionally graphic or dramatic form, the ‘weaponizing’ of religion is nothing particularly new, nor is it confined to only religiously conservative sections of the West. For example, in South Asia it is an integral part of politics. The ‘South Asian Eight’ are notorious for it and it could be unreservedly stated that in Sri Lanka, the latter’s ethnic conflict would be more amenable to resolution if religion was not made a potent weapon by ambitious politicians of particularly the country’s South.
The more enlightened sections of Christian believers in the US may not have been able to contain their consternation at the sight of the US President apparently being ‘blessed’ by pastors claiming adherence to Christianity. Any human is entitled to be blessed but not if he is leading his country to war without exhausting all the options at his disposal to end the relevant conflict by peaceful means.
More compounded would be his problem if his directives lead to the death of civilians in the hundreds. In the latter case he is stringently accountable for the spilling of civilian blood, that is, the committing of war crimes.
However, the US along with Israel did just that in the recent bombings of Iran, for instance. The majority of the lives lost were those of civilians. If the US President is endowed with a Christian conscience he would have paused to consider that he is guilty of ordering the taking of the life of another human which is forbidden in the teachings of Jesus Christ.
Moreover, the ‘pastors’ praying over the US President should have thought on the above lines as well. May be they were in an effort to curry the President’s favour which is as blame-worthy as legitimizing in some form the taking of civilian lives. Apparently, the realisation is not dawning on all Christian conservatives of the US that some of these ‘pastors’ could very well be the proverbial false prophets and the latter are almost everywhere, even in far distant Sri Lanka.
However, the political reality ‘on the ground’ is that the Christian Right is a stable support base of the Republican Right in the US. Considering this it should not come as a surprise to the seasoned political watcher if the Christian Right, read Christian fundamentalists, are hand-in-glove, so to speak, with President Trump. But it is a scathing indictment on these rightist sections that they are all for perpetrating war and destruction and not for the fostering of peace and reconciliation. Ideally, they should have impressed on their President the dire need to make peace.
That said, political commentators should consider it incumbent on themselves to point out that religion is being ‘weaponized’ in Iran as well. Theocratic rule in Iran has been essentially all about perpetuating the power of the clerical class. The reasons that led to the Islamic Revolution in Iran are complex and the indiscreet Westernization of Iran under the Shah dynasty is one of these but one would have expected Iran to develop from then on into a multi-party, pluralistic democratic state where people would be enjoying their fundamental rights, as enshrined in the Universal Declaration of Human Rights, for example.
Moreover, Iran should have taken it upon itself to be a champion of world peace, in keeping with its Islamic credentials. But some past regimes in Iran had vowed to virtually bomb Israel out of existence and such regional policy trajectories could only bring perpetual conflict and war. Considering the current state of the Middle East it could be said that the unfettered playing out of these animosities is leading the region and the world to ‘reap the whirlwind’, having recklessly ‘sowed the wind’.
However, religious fundamentalism-inspired conflict and war has spread well beyond the Middle East into almost every region since 1979, the year of the Islamic Revolution in Iran. So much so, knowledgeable opinion now points out that religious identity has come to replace nationalism as a principal shaper of international politics or “geopolitics”, as quite a few sections misleadingly and incorrectly term it.
Elaborating on the decisive influence of religious identity, the well known and far traveled Western journalist Patrick Cockburn says in his authoritative and comprehensive book titled, ‘The Age of Jihad – Islamic State and the Great War for the Middle East’ at page 428 in connection with the war in Chechnya ; ‘If nationalism was not entirely dead, it no longer provided the ideological glue necessary to hold together and motivate people who were fighting a war. Unlike the Islamic faith, it was no longer a belief or a badge of identity for which people would fight very hard.’ (The book in reference was published by VERSO, London and New York).
In his wide coverage of Jihadist Wars the world over Cockburn goes on to state that today a call from a cleric could motivate his followers to lay down no less than their lives for a cause championed by the former. The 9/11 catastrophe alone should convince the observer that this is indeed true.
However, as often pointed out in this column, there is no alternative but to foster peace and reconciliation if a world free of bloodshed and strife is what is being sought. Fortunately we are not short of illustrious persons from the East and West who have shone a light on how best to get to a degree of peace. Besides Mahatma Gandhi of India, who was the subject of this column last week, we have former President of Iran Mohammad Khatami, who made a case for a ‘Dialogue of Civilizations’ rather than a ‘Clash of Civilizations’.
The time is more than ripe to take a leaf from these illustrious personalities, for, the current state of war in the Middle East has raised the possibility of a war that could transcend regional boundaries. The antagonists are obliged to exhaust all the peaceful options with the assistance of the UN system. Besides, war cannot ever have the blessings of the sane.
Features
Venerable Rahula Thera’s 35-year green mission and national Namal Uyana
It was 35 years ago, on March 28, 1991, that Venerable Rahula Thera, then a young monk, embarked on a journey to the Na forest in Ulpathagama, Palagama, in the Anuradhapura District. Today, three and a half decades later, this mission stands as living proof of the enduring bond between Buddhist philosophy and the natural world.
Marking the 35th year of this green mission, Rahula Thera’s relentless dedication has transformed the National Namal Uyana into an environmental landmark admired not only across Sri Lanka but around the globe, as well.
When studying the life of Venerable Rahula Thera, one cannot ignore the profound connection between Buddhism and the environment. Buddhism is a philosophy deeply attuned to nature. The historical use of the sacred “Na Ruka” by all four Buddhas: Mangala Buddha, Sumana Buddha, Revata Buddha, and Sobhita Buddha — for enlightenment —demonstrates that from time immemorial, Buddhism has maintained a sacred bond with the Na tree. From the birth of Siddhartha to his enlightenment, the propagation of the Dharma, and even the great Parinirvana, all of these milestones unfolded in verdant, living landscapes.
Venerable Rahula Thera did not embark on the Namal Uyana mission seeking government support or personal gain. His commitment sprang from a deep devotion to the Buddha’s teachings on grove cultivation. A grove cultivator is one who spreads compassion for nature. As the Vanaropa Sutta teaches:
Venerable Rahula Thera reclaimed Namal Uyana which was then under the control of timber smugglers and treasure hunters. The term “Wanawasi” does not merely mean living in a forest; it signifies finding rest and enlightenment through nature, free from the destructive roots of greed, sin, and delusion.
Another defining aspect of Venerable Rahula Thera’s 35-year mission is the purification of the human mind. He has consistently taught the thousands who visit Namal Uyana that a person who loves a tree will never harm another human being. As the Dhamma proclaims:
It is important to remember that Venerable Rahula Thera devoted his life, without fear, speaking the truth and taking necessary action, tirelessly advancing the national mission he began. From 1991 to the present, he has worked with every government elected by the people, maintaining impartiality and independence from political ideology. Yet, he never hesitated to raise his voice fearlessly against any individual, of any rank or party, who committed wrongdoing.
Religious and Social Mission
The National Namal Uyana is not merely a forest; it is a magnificent heritage site, dating back to ancient times. Scattered across the landscape are boundary walls, the remains of ancient monastery complexes, and stone carvings believed to date back to the reign of King Devanampiyatissa. In earlier centuries, this sacred land had served as a meditation sanctuary for hundreds of monks. The name “National Namal Uyana,” by which this ecological and archaeological treasure is known today, was introduced by Venerable Rahula Thera in 1991. The government’s later recognition of the site as the National Namal Uyana stands as a significant achievement for both religion and national heritage.
Venerable Rahula Thera is a monk who has lived a life of renunciation. A striking example of this is his decision not to assume the position of Chief Incumbent of the National Namal Uyana Viharaya, instead entrusting the temple to the Ramanna Nikaya and its trustees. In doing so, he set a precedent for the contemporary Sangha. The Thera himself stated that he was merely the trustee of Namal Uyana, not its owner.
Legacy and Continuing Inspiration
The 35th anniversary of Venerable Wanawasi Rahula Thera’s arrival at Namal Uyana is not merely the commemoration of a period of time; it is a message of nature to future generations. Through his work, the Thera revived the ancient Hela tradition of loving trees and venerating the environment as something sacred. This religious and environmental mission remains unforgettable.
The revival experienced by Namal Uyana, after the arrival of Venerable Wanawasi Rahula Thera, is beyond simple description. Some of the major accomplishments achieved under his leadership include:
* Securing and protecting the largest Rose Quartz (Rosa Thirivana) reserve in South Asia.
* Restoring the Na forest spread across hundreds of acres, providing shelter to numerous rare plants and animal species.
* Transforming the area into a living centre for environmental education, offering practical learning experiences for thousands of schoolchildren and university students.
* Drawing the attention of world leaders and international environmentalists to Sri Lanka’s unique environmental heritage.
In recognition of his immense contribution to environmental conservation, Venerable Rahula Thera was honoured with the Presidential Environment Award and the Green Award in 2004—a significant moment in his life. Yet the Thera himself has always remained devoted to the work rather than the recognition it brings, making such appreciation even more meaningful.
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