Power mafia applies brakes on country’s infant solar industry


Solar Industry Association (SIA) alleges that the ‘Surya Bala Sangraamaya’ programme, launched in 2016, is on the verge of collapse. This is despite the fact that the programme has been a resounding success with over 17,000 installations and a combined energy capacity of nearly 200 MW added to the national grid.

"The Ceylon Electricity Board (CEB) and Ministry of Power and Energy officials have undertaken steps without any consultation from relevant authorities including the Cabinet and the President as the Minister in charge of the Environment that will completely stop the installation of solar power projects," Lakmal Fernando, Secretary of SIA said.

He said that on 28 May 2019, CEB had stopped accepting applications for solar power projects over 50 kW in size.

"They informed us that Net Metering Systems (carry forward of excess energy produced by solar projects in homes) and Net Accounting Systems (sale of extra energy produced by solar projects in homes to the CEB) will be cancelled. Meanwhile Net Plus Tariffs (CEB buys all energy produced by solar projects) are to be drastically reduced rendering the scheme commercially unviable."

These steps would lead to the collapse of the solar industry in Sri Lanka leading to over 10,000 people losing their jobs, Fernando said. As the solar power industry collapses, the CEB would have to purchase more power from private thermal power producers at higher prices.

Earlier it was reported that Minister of Power, Ravi Karunanayake had been pressing the producers of renewable energy to reduce their prices. Currently, those who produce renewable energy are paid Rs. 22 for the first seven years and Rs. 15.50 for the next 13 years. The average lifecycle cost (LCC) of electricity is about Rs. 18 per unit. LCC is the industry standard worldwide to facilitate investment decisions before acquiring or developing assets associated with a power project.

Fernando said that during a meeting, Minister of Power and Energy Ravi Karunanayake had said that plans were underway to introduce a completely new tariff system. The SIA currently had no idea of what the new systems might be and that had created uncertainty in the renewable energy sector, he said.

"On average, we are paid about Rs. 18 per unit. What you should keep in mind is that unlike electricity generated using coal, LNG or diesel, our prices are not tied to the dollar. The dollar keeps on rising and so does the cost of production. This creates balance of payment issues. We are paid in rupees and our average life-cycle cost of electricity is Rs. 18." (RK)

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