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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.
News
Navy seizes an Indian fishing trawler poaching in Sri Lankan waters north of Talaimannar
During an operation conducted in the wee hours of Tuesday (23 Dec 25), the Sri Lanka Navy seized an Indian fishing trawler and apprehended 12 Indian fishermen, while they were poaching in Sri Lankan waters north of Talaimannar.
Recognizing the detrimental effects of poaching on marine resources and the livelihoods of local fishing communities, the Sri Lanka Navy continues to conduct regular operations as
proactive measures to deter such activities. These efforts underscore the collective robust approach steadfast commitment to safeguarding the nation’s marine ecosystems while ensuring the economic security and wellbeing of its citizens.
The fishing trawler along with the fishermen held in this operation was handed over to the Fisheries Inspector of Mannar for onward legal proceedings.

News
India’s External Affairs Minister meets Sri Lanka PM
India’s External Affairs Minister, Dr. Subramaniam Jaishankar, met with the Prime Minister of Sri Lanka, Dr. Harini Amarasuriya, on 23 December at Temple Trees, during his visit to Sri Lanka as the Special Envoy of Indian Prime Minister Shri Narendra Modi.
The meeting took place as part of the official visit aimed at holding discussions with Sri Lanka’s top leadership, at a time when the nation commenced reconstruction efforts following the devastation caused by Cyclone Ditwah.
During the discussions, the Minister of External Affairs of India reaffirmed readiness to extend support for Sri Lanka, including assistance in rebuilding railways, bridges, and strengthening of the agricultural sector in the country. He also highlighted the importance of having effective systems in place to respond to disaster situations, supported by strong legislative, administrative, and institutional frameworks. Both sides reviewed ongoing relief efforts and explored avenues to further strengthen bilateral cooperation in disaster response and recovery.
The Prime Minister commended the Government of India for the continued support, noting that the recovery process following the devastation caused by Cyclone Ditwah include beyond immediate relief efforts to long-term measures such as resettlement, and reconstruction of habilitation and infrastructure.
The Prime Minister further stated that steps have been taken to reopen schools as part of the process of restoring normalcy, with close monitoring in place. The Prime Minister emphasized the need to ensure stability, reduce vulnerability, and strengthen protection mechanisms highlighting the solidarity of the people, their strong spirit of volunteerism, and collective action demonstrated during the emergency situation.
The event was attended by the High Commissioner of India Santosh Jha, Additional Secretary (IOR), MEA Puneet Agrawal, Joint Secretary (EAMO), MEA Sandeep Kumar Bayyapu, Deputy High Commissioner Dr. Satyanjal Pandey, and representing Sri Lankan delegation, Secretary to the Prime Minister Pradeep Saputhanthri, Additional Secretary to the Prime minister Ms.Sagarika Bogahawatta, Director General (South Asia), Ministry of Foreign Affairs Samantha Pathirana, Deputy Director, South Asia Division, Ministry of Foreign Affairs Ms.Diana Perera.
[Prime minister’s media division]
News
Sri Lanka’s coastline faces unfolding catastrophe: Expert
Sri Lanka is standing on the edge of a coastal catastrophe, with the nation’s lifeline rapidly eroding under the combined assault of climate change, reckless development and weak compliance, Director General of the Department of Coast Conservation and Coastal Resource Management (DCC&CRM) Dr. Terney Pradeep Kumara has warned.
“This is no longer an environmental warning we can afford to ignore. The crisis is already unfolding before our eyes,” Dr. Kumara told The Island, cautioning that the degradation of Sri Lanka’s 1,620-kilometre coastline has reached a point where delayed action could trigger irreversible damage to ecosystems, livelihoods and national security.
He said accelerating coastal erosion, rising sea levels, saltwater intrusion and the collapse of natural barriers, such as coral reefs and mangroves, are placing entire coastal communities at risk. “When mangroves disappear and reefs are destroyed, villages lose their first line of defence. What follows are floods, loss of homes, declining fisheries and forced displacement,” he said.
Dr. Kumara stressed that the coastline is not merely a development frontier but the backbone of Sri Lanka’s economy and cultural identity. “More than half of our tourism assets, fisheries and key infrastructure are concentrated along the coast.
If the coast fails, the economy will feel the shock immediately,” he warned.
Condemning unregulated construction, illegal sand mining and environmentally blind infrastructure projects, he said short-term economic interests are pushing the coastline towards collapse. “We cannot keep fixing one eroding beach while creating three new erosion sites elsewhere. That is not management—it is destruction,” he said, calling for science-driven, ecosystem-based solutions instead of politically convenient quick fixes.
The Director General said the Department is intensifying enforcement and shifting towards integrated coastal zone management, but warned that laws alone will not save the coast. “This is a shared responsibility. Policymakers, developers, local authorities and the public must understand that every illegal structure, every destroyed mangrove, weakens the island’s natural shield,” he added.
With climate change intensifying storms and sea surges, Dr. Kumara warned that Sri Lanka’s vulnerability will only worsen without urgent, coordinated national action. “The sea has shaped this nation’s history and protected it for centuries. If we fail to protect the coast today, we will be remembered as the generation that allowed the island itself to be slowly eaten away,” he went on to say.
By Ifham Nizam
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