News
Biomass power producers shut down during power crisis
by Ifham Nizam
Renewable energy producers who generate electricity using biomass (wood chips) capable of supplying 20 MW (140 million kWhs) per year to the CEB grid, have shut down because what they are paid for such power is not sufficient to even cover their variable costs for biomass and other day to day operating costs such as salaries, chemicals, etc.
These producers, who have entered into Power Purchase Agreements (PPAs) with the CEB, have jointly written to the CEB requesting an increase in their tariff if they are to restart operations.
They have pointed out that the costs used in the formula used to calculate their annual tariff rate is far below actuals. The calculation uses Rs 14 per kWh as the cost of fuel wood, whereas the actual cost today is Rs 21 per kWh. Overheads and maintenance (O&M) and other related costs are assumed to be Rs 2 per kWh, whereas the actual cost is around Rs 6 per kWh, developers claim.
In their letter to the CEB, they point out that if the “correct” costs are used in the tariff formula, their tariff should be Rs 36.67 per kWh. With such a tariff they would be able to operate their plants and also service their bank loans.
They say that the CEB’s cost for generating power from its own plants, including coal, is substantially higher than the Rs 36.67 per kWh they have requested.
They have calculated that if the CEB pays them the requested tariff, instead of using their own plants to generate this power, it would save Rs 3,220 million per year. Also, since they use a local biomass and not imported coal and oil required by the CEB’s plants, the country would save USD 20 million per year foreign exchange.
Unlike in the case of other renewable energy technologies such as hydro, wind, and solar, biomass plants can operate reliably round the clock and, in CEB terminology, are ‘base load’ plants similar to the coal plants. The energy supplied by such plants is therefore more valuable to the CEB than power from other types of renewable energy.
The problem has been made worse by the fact that the CEB has not paid biomass developers (as well as other renewable power suppliers) for the power they have supplied to the CEB from December 2021 to date.
In their letter, developers have pointed out that they, unlike other renewable energy technologies (hydro, wind and solar) whose “fuel” cost is zero, have large recurring costs on fuel.
They have requested the CEB to expedite the payment of their past invoices and give them priority over other renewable energy developers as, without such payments, they cannot operate due to severe cash flow shortages.
One of the larger developers, Mirigama Dendro Power (MDP) located near Giriulla, has already informed its bankers that it is unable to service its loans and has asked the banks to take over its plant which was pledged as collateral.
The banks don’t want to foreclose because with the present tariffs no one would want to take over the plant even if all debts were settled and the plant was sold for a token one rupee.
This plant originally cost Rs 1.2 billion to build and it would cost Rs 3 billion to replicate today. Without an increase in the tariff as requested, MDP says they can’t remain in business and their plant will be only good for scrap. Other biomass developers whose plants are all currently stopped will soon be following MDP and closing down permanently, they say.
Biomass developers wrote to the CEB Chairman M M C Ferdinando two weeks ago and he recently met with a group of them. While the Chairman appeared to understand the situation, all he could say was that he would forward the request to the CEB’s tariff committee.
From past experience, developers claim that it will take months, if not years, for anything to come of this. By this time all biomass plants would have laid off their staff and most likely, been dismantled.
It is ironic that at a time when the country is suffering from power and foreign exchange shortages, an option to provide a substantial quantum of high-quality power to the grid at a price lower than any other alternative available today and to save foreign exchange, is not being prioritized, the developers urge.
Power and Energy Kanchana Wijesekera said that he will make the maximum effort to feed renewable energy-based power into the CEB grid as soon as possible. In the case of biomass developers, there is approximately 20 MW of such power capable of generating 140 million kWh annually already connected to the grid. But this has become unavailable because of the inadequate tariff.
As detailed above, the requested tariff is financially beneficial to the CEB and the country. Here is a clear opportunity for the minister to intervene to “walk the talk” and bring this 20 MW back into the grid, biomass developers say.
News
National Audit Office reveals NHSL lapses
Reagent scandal:
Deputy Director of the National Hospital, Dr. Rukshan Bellana, has been interdicted by Health Service Committee (HSC) of the Public Service Commission (PSC) following a preliminary inquiry into several complaints received against him, government sources said.
They said certain matters referred by the Secretary to the Prime Minister Dr. Harini Amarasuriya and Inspector General of Police (IGP) Priyantha Weerasooriya, too, had been taken into consideration.
A Health Ministry official said there was no truth in Dr. Bellana’s claim, as reported in the 30th December edition of The Island, that the Health Ministry had sacked him on the approval of the HSC of the PSC over him taking up the massive Rs 900 mn fraud involving the supply of chemical reagents to the laboratory of the National Hospital of Sri Lanka (NHSL) in Colombo, which is the premier hospital in the country.
Sources said that there was absolutely no basis for this allegation. The official said that Dr. Bellana had been interdicted for issuing statements that caused controversy and turmoil among the public. That’s the most serious offence that had been taken into consideration when the decision to interdict him was taken, sources said. “There will be a spate of charges in the charge sheet to be issued soon.”
The interdiction of medical officers could not be carried out by the Ministry of Health and Mass Media, as the Ministry was not vested with disciplinary authority, sources added.
Dr. Bellana said he stood by what he revealed and had evidence to support his claim.
Health Ministry sources acknowledged that the National Audit Office (NAO) on June 6, 2025, had called for information in respect of chemical reagents procured by the National Hospital Colombo NHSL laboratory from 2022 to 2024.
Responding to another query, sources said that a separate investigation by the Internal Audit of the Ministry of Health was on into issues raised by the Audit query pertaining to the lab of the NHSL.
Having pointed out that the government paid Rs. 894,186,168 (2022), Rs. 713,652,615 (2023) and Rs. 936,152,767, totalling Rs 2,543,991,550 for chemical reagents during that period, NAO sought an explanation from the Health Ministry as to how Rs 12,894,697 worth of chemical reagents past expiry dates were found in six laboratories at NHSL during examination carried out on April 7,8,10,21 and 22 in 2025.
The NAO also raised the failure on the part of the relevant authorities to secure the approval of the Medical Supplies Division (MSD) before placing orders with local suppliers for chemical reagents.
The Health Ministry was questioned over the absence of proper stock keeping regarding Rs 2544 mn worth chemical reagents issued to NHSL laboratories. The NAO ascertained that Financial Regulations 751 had been violated. As a result of the absence of credible stock keeping, the NAO hadn’t been able to ascertain whether shelf-life expired chemical reagents were misused, the government authority stated.
The NAO asked for an explanation regarding the payment of Rs 912,838 over the required amount to a local private supplier (NAO named the supplier) for chemical reagents obtained.
In one of the most serious observations, NAO pointed out that shelf-life expired chemical reagents had been used for tests. The NAO raised this while pointing out the Health Ministry violated a key prerequisite in the procurement of chemical reagents that their shelf life should be at least 85% at the time of receiving consignments. Instead, all stocks procured had less than six months shelf life, NAO stated.
NAO declared that some suppliers refrained from mentioning the date of manufacture and the time of expiry.
The above mentioned were some of the issues that had been raised by Audit Superintendent Y.M. Sugathadasa on behalf of the Auditor General who is the head of the NAO. The post of AG remains vacant since December 8, 2025. Earlier incumbent W.P.C. Wickremeratne retired on April 8, 2025 after having served as AG for several years. President Anura Kumara Dissanayake and the Constitutional Council haven’t been able to reach consensus on a permanent appointment yet.
By Shamindra Ferdinando ✍️
News
NPP’s CMC budget passed after four Opp. members switch allegiance
The Opposition has claimed that the government forced three of its Colombo Municipal Council members to to skip yesterday’s vote on the annual budget of the Council. The three councillors who voted with the SJB-led Opposition on 22 Dec., to defeat the NPP, skipped yesterday’s vote.
Two of them didn’t turn up yesterday while the other one left the Council early, claiming his wife was not well. One of the four SLMC councillors switched his allegiance to the NPP. having voted with the Opposition on 22 Dec.
As a result, the CMC’s annual budget was passed with a majority of two votes.
The budget proposal received 58 votes in favour, while 56 councillors voted against it. Last week, the Opposition obtained 60 votes to defeat it, while the NPP managed to secure only 57.
When the 2026 budget of CMC was first presented to the council on 22 December, 60 councilors voted against it while 57 members voted for the budget.
In the last Local Government Elections, the NPP secured power in the CMC and its mayoral candidate Vraie Cally Balthazar was elected as the Mayor of Colombo by securing 61 votes. (SF)
News
600MW hit to national grid as two Norochcholai units go offline
Sri Lanka’s power system has suffered a major setback with two of the three generators at the coal-fired power plant at Norochcholai going out of service, cutting around 600 megawatts from the national grid, even as Energy Ministry officials stressed yesterday that the issue is minor and fully under control.
One unit has been offline since November for scheduled major maintenance carried out once every three years, while another was shut down following a technical fault in its boiler. As a result, only one generator, at the country’s largest and only coal-fired power station, is currently supplying electricity to the grid.
Despite the sharp reduction in coal-based generation, a senior spokesperson for the Norochcholai Power Plant assured that there would be no disruption to electricity supply, as hydroelectric power generation is being increased to compensate for the temporary shortfall from Norochcholai.
Ministry of Power and Energy officials also confirmed that the situation is not serious and does not pose a risk to the stability of the national grid. “This is a minor technical issue and routine maintenance activity. There is no cause for public concern,” a senior Ministry official said.
Meanwhile, a top official of the Ceylon Electricity Board (CEB) said all three units of the Norochcholai Power Plant are expected to be restored by the first week of January, delivering the full 900MW capacity back to the national grid.
“Current reservoir levels are favourable, allowing us to rely more on hydropower during this period,” the CEB official said, adding that system operations are being closely monitored.
A senior electrical engineer told The Island that one unit had been shut down in November for routine maintenance, while another unit suffered an unexpected breakdown earlier this week. “Such incidents are not unusual in large thermal power stations. Corrective work is already under way and the units will be brought back online as scheduled,” he said.
Norochcholai remains the backbone of Sri Lanka’s base-load electricity generation, and while prolonged outages could place strain on the system during dry periods, officials reiterated that current conditions and contingency measures are adequate to ensure uninterrupted power supply until full operations resume.
By Ifham Nizam ✍️
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