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Lanka looking for cheaper three-year private power to plug capacity gap
ECONOMYNEXT –Sri Lanka’s state-run Ceylon Electricity Board is looking for cheaper private power to plug near term gaps in supply and to offset high-cost power at the margin of costly generators owned by the utility, Energy Minister Kanchana Wijesekera said.
The CEB has advertised for firm energy above 50 Mega Watts that can dispatched at any time for one, two and three years.
“Objective of this endeavor is to serve the nation with low-cost electricity while maintaining an uninterrupted power supply in the country for 24 hours during any period of the year even in a natural disaster or a technical failure of an existing plant,” the tender notice said.
“The envisaged contract period will be for one, two or three years and expected to connect as early to the system. The source of energy shall be any type which can be dispatched to the national grid at least cost on the instructions of System Control Centre of CEB.”
The plants could be located anywhere and the company will also have to build transmission line to connect to the grid. Bids close on September 07.2023 was drier than expected and next year may also be dry, Minister Wijesekera said. Daily energy demand was now also higher than expected, he added.
The CEB is also in talks with ACE Power Embilipitiya and ACE Power Matara to buy power to plug a short-term gap due to being forced to release extra water from the Samanalawewa reservoir. However, these plants too could be used to replace higher cost CEB plants.
Private power without capacity charge could be bought at around 52 to 58 rupees based on discussions, Wijesekera said. The capacity charge will add to the cost.
Furnace oil is generally cheaper than diesel (CPC pricing and taxes may impact), newer plants with a better heat rate are cheaper than older ones, combined cycles are generally cheaper than pure gas turbines, and coal is generally cheaper than liquid fuels.
According to the latest data the energy cost (without capacity charge) of the Lakvijaya coal plant was 43.23 rupees a unit, Sapugaskanda barge was 44.15 rupees, Uthuru Janani was 44.18 rupees, Sapugaskanda A, 47.76 rupees, the West Coast plant 48.36, Kelanitissa 48.36, Kelanitissa Diesel 63.82.
Small CEB generators in Hambantota which were re-activated to avoid supplementary power was 85.28 rupees, CEB generators in Matugama was 87.24 rupees. A CEB gas turbine (expected to peaking) cost 113.11 rupees and a small GT 143.60 rupees.
CEB is now negotiating with ACE Embilipitiya and ACE Matara to buy power for the Southern grid after demands were made to release stored water ahead of schedule from Samamnalawewa reservoir.
“As a practical matter, some of these private plant are cheaper than some of our (CEBs) older plants,” Minister Wijesekera said. “They have been used for many years and their efficiency is low. At times, taking power from private plant is cheaper than those plants.
“So we have to clearly say the extra power is taken due to dry weather and being forced to release more water than earlier requested for irrigation.”
The capacity charge reflects the investment cost and profit. In the past some private plants under competitive bidding has taken a loss on the energy charge to guarantee a better heat rate and win power purchase deals, industry analysts say. Once a plant has been signed up, the capacity charge is a sunk cost. CEB is expecting to sign up both ACE plants of around 100MW and 23 MWs.
“We need at least about 100 MegaWatts,” Minister Wijesekera said. “As much power utilizing those plants would be an additional benefit. May be if there is a surplus of power we can stop some of the high cost power power plants that is in use today.
“If the GT-7 is going to cost us 143 (rupees), and the other plant is going to cost between 60 to 65 rupees, it makes perfect economic sense to go with those power plants.”
In the past attempts by CEB to get idle private plants before a crisis developed and boost is safety margin when the bargaining power to push down the capacity charge is with the CEB has been shot down by various activists.
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PM departs Sri Lanka to participate in the 56th World Economic Forum Annual Meeting in Davos-Klosters, Switzerland.
Prime Minister Dr. Harini Amarasuriya departed Sri Lanka on this morning (19 January) to participate in the 56th Annual Meeting of the World Economic Forum (WEF), to be held in Davos-Klosters, Switzerland, from 19 to 23 January 2026.
The World Economic Forum 2026 will be convened under the theme “A Spirit of Dialogue” and will bring together over 3,000 global leaders, including heads of state, government leaders, chief executive officers of leading multinational corporations, policymakers, and technology innovators.
During the visit, the Prime Minister is scheduled to hold a series of high-level bilateral meetings with key international leaders, heads of global institutions, and other distinguished dignitaries.
(Prime Minister’s Media Division)
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Coal scandal: Govt. urged to release lab report
The government is under mounting pressure to release a foreign laboratory report on the controversial coal consignment imported for the Lakvijaya Power Plant, with the Frontline Socialist Party (FSP) accusing the authorities of political interference and tender manipulation.
Speaking to the media after a party meeting in Homagama yesterday, FSP Education Secretary Pubudu Jagoda demanded an immediate explanation for the delay in disclosing the report from a Dutch laboratory, Cotecna, which was commissioned to test samples of the coal stocks in question after doubts were raised about an earlier local laboratory assessment. Jagoda said Cabinet media spokesperson Dr. Nalinda Jayatissa had announced that the report would be submitted by 16 January, but it had yet to be made public.
“The Sri Lankan lab confirmed the coal was substandard and could damage both the environment and power plant machinery. The foreign lab has independently verified the same results, we are told. Yet, political pressure appears to be delaying the release of the report.” He warned that any attempt to issue a false report would eventually be exposed and urged the government and the laboratory to maintain transparency.
SLPP MP D.V. Chanaka told Parliament last week that while 107 metric tonnes of coal were normally required per hour to generate 300 megawatts, but as many as 120 tonnes of newly imported coal were needed to produce the same amount of power due to its lower calorific value. Tests showed the first two shipments had calorific values of 5,600–5,800 kcal/kg, below the required minimum of 5,900 kcal/kg, said.
Jagoda accused the government of tailoring procurement rules to benefit an Indian supplier, citing a drastic reduction in reserve requirements—from one million metric tonnes in 2021 to just 100,000 tonnes in 2025—and alleged previous irregularities by the company, including a 2016 Auditor General finding regarding a rice supply contract and the 2019 suspension of a key agent of the company by the International Cricket Council over match-fixing.
He further criticised systemic manipulation of the coal tender process, including delays in issuing the tender from the usual February-March window to July, and progressively shortening the submission period from six weeks to three, giving an advantage to suppliers with stock on hand.
The Ministry of Energy recently issued an amended tender for 4.5 million metric tonnes of coal for the 2025/26 and 2026/27 periods, following the cancellation of an earlier tender. Jagoda warned that procurement delays and irregularities could trigger coal shortages, higher spot-market purchases, increased electricity costs, and potential power cuts if hydropower falls short.
Jagoda called for urgent investigations into the procurement process, insisting that any mismanagement or corruption should not be passed on to the public.Denying any wrongdoing, the government has said it is waiting for the lab report.
by Saman Indrajith ✍️
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Greenland dispute has compelled Europe to acknowledge US terrorising world with tariffs – CPSL
The Communist Party of Sri Lanka yesterday (18) alleged that the US was terrorising countries with unfair tariffs to compel them to align with its bigot policies.
CPSL General Secretary Dr. G. Weerasinghe said so responding to The Island query regarding European countries being threatened with fresh tariffs over their opposition to proposed US take-over of autonomous Danish territory Greenland.
US President Donald Trump has declared a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland with effect from 1 February but could later rise to 25% – and would last until a deal was reached. Targeted countries have condemned the US move.
Dr. Weerasinghe pointed out that none of the above-mentioned countries found fault with the US imposing taxes on countries doing trade with Russia and Iran. Now that they, too, had been targeted with similar US tactics, the CP official said, underscoring the pivotal importance of the world taking a stand against Trump’s behaviour.
Referring to the coverage of the Greenland developments, Dr. Weerasinghe said that news agencies quoted UK Prime Minister Keir Starmer as having said that the move was “completely wrong”, while French President Emmanuel Macron called it “unacceptable.
Dr. Weerasinghe said that Sri Lanka, still struggling to cope up with the post-Aragalaya economic crisis was also the target of discriminating US tariff policy. The top CPSL spokesman said that the recent US declaration of an immediate 25% increase in tariff on imports from countries doing business with Iran revealed the prejudiced nature of the US strategy. “Iran is one of our trading partners as well as the US. Threat of US tariffs on smaller countries is nothing but terrorism,” Dr. Weerasinghe said, stressing the urgent need for the issue at hand to be taken up at the UN.
Responding to another query, Dr. Weerasinghe cited the US targeting India over the latter’s trade with Russia as a case in point. He was commenting on the recent reports on India’s Reliance Industries and state-owned refiners sharply cutting crude oil imports from Russia. The CPSL official said that the EU wouldn’t have even bothered to examine the legitimacy of US tariff action if they hadn’t been targeted by the same action.
Perhaps, those who now complain of US threats over the dispute regarding Greenland’s future owed the world an explanation, Dr. Weerasinghe said. The reportage of the abduction of Venezuela’s President and the first lady underscored that the US intervened because it couldn’t bear the Maduro administration doing trade with China and other countries considered hostile to them, Dr. Weerasinghe said.
The CPSL official said that the NPP couldn’t turn a blind eye to what was happening. Just praising the US wouldn’t do Sri Lanka any good, he said, adding that the Greenland development underscored that the US under Trump was not concerned about the well-being of any other country but pursued an utterly one-sided strategy.
The US dealings with the NPP government, particularly the defence MoU should be examined taking into consideration US tariffs imposed on Sri Lanka at the onset of the second Trump administration and ongoing talks with the US, Dr. Weerasinghe.
By Shamindra Ferdinando ✍️
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