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CEB fails to accord priority to mini hydro power plants    

Sri Lanka’s Mini Hydro power plants have not been given priority by the Ceylon Electricity Board (CEB ) as it has not signed a single standardised power purchasing agreement with such power suppliers  during the past seven years. 

This was reiterated by the Small Hydro Power Developers Association (SHPDA) President Thusitha Peiris when he addressed the 25th anniversary of the grid-connected mini hydropower industry.

 He noted that if SPAAs were offered, an average of 150 MW could have been connected to the national grid through small hydropower plants.

Recommendations from 19 Government agencies will be needed to build a mini hydro power plant he said adding that a fter obtaining those recommendations, it usually takes about three-and-a-half years to complete a project. 

Accordingly, during the last 18 years, an average capacity of about 25 MW was only connected to the national grid through SHPs. 

Pieris mentioned that only 12 to 14 projects had been constructed per year on an average where at least 7,500 workers have been employed for the construction work.

 In addition, 65% of the total cost of projects has been added into the flow of the national economy, helping that valuable contribution circulated within the rural economy to elevate people’s livelihood.

“We have completed projects with a capacity of more than 440 MW in as little as 18 years. If SPPAs had been issued during the last seven years, we believe that another 150 MW could have been added to the national grid. Projects that more than 472 local entrepreneurs initiated have been held since 2015,” said Peiris.

According to SHPDA, local entrepreneurs have invested more than Rs. 2.2 billion on small hydropower projects, which have been idle for the last seven years. 

If SPPAs were signed for these projects, the association estimates that Sri Lanka would have received investments worth over Rs. 6.5 billion and over 6,000 direct and indirect employment opportunities.

PPAs are generally signed for 15 to 20-year durations, and most of the PPAs that are under avoided cost tariff structure, have expired in the recent past. 

Given the financial position of the CEB, initially, it was considering to review the PPAs upon their expiry, as a measure to improve its financial position. 

Hence, the renewals of such expired PPAs were delayed. However, these power plants continued to supply energy to the national grid at a lower tariff structure, which was generally offered for expired PPAs. 

. Therefore, the CEB’s decision to renew expired PPAs is a credit positive for mini-hydro power producers, whose PPAs had expired in the recent past.

From 2018 – 2037, Sri Lanka plans to add 842 MW of major hydro, 215 MW of mini hydro, 1,389 MW of solar, 1,205 MW of wind, 85 MW of biomass, 425 MW of oil-based power, 1,500 MW of natural gas and 2,700 MW of coal power into the electricity generation system.  

The annual total electricity demand is about 14,150 gigawatt hours (GWH).  The annual demand for electricity is expected to increase by 4.9 percent over the next 20 years, a number constrained by high prices.

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