Sri Lanka Economic Acceleration Framework 2020-25 Ceylon Chamber of Commerce’s key recommendations on power and energy

Tuesday, 22 October 2019 01:15 -     - {{hitsCtrl.values.hits}}

The Ceylon Chamber of Commerce recently launched a working draft of ‘Sri Lanka Economic Acceleration Framework 2020-25’ towards building a $ 135 billion economy by 2025. Today we feature the Power and Energy Working Group proposals from the document

Members are constituted from the existing National Agenda Committee of the Chamber on Energy


Policy interventions and key activities

  1. Restructure and standardise the bidding processes including Request For Proposals (RFPs) to increase competition, compare bids accurately, and capture maximum long-term economic value.

  2. Engage professional industry advisory companies to protect national interest when evaluating and negotiating energy contracts with international parties, until Sri Lankan experts gain capacity.

  3. Mandate the National Procurement Commission (NPC) to perform the functions of the Procurement Appeals Board (PAB), so that the appeals process could be carried out in an independent and impartial manner.

  4. Allow ‘power wheeling’ within the transmission network. This measure could lead to significant investment in power generation by major industries and help in achieving the Non-Conventional Renewable Energy (NCRE) generation targets, while reducing CEB’s need for generation capacity additions. 

  5. Amend the Electricity Act to exclude the requirement to bid for small-scale NCRE projects and implement a ‘Feed-in-Tariff’ with agreed formulae and periodic rate revision. Applications may include a forfeitable bond, and approvals need to be time limited. 

  6. Rationalise short-term LNG imports with upstream development timelines.  Strategic LNG imports in the short term through flexible contracts, use of an offshore delivery solution (FSRU or FSU+ barge) instead of land-based terminal, would be beneficial in balancing imported LNG with possible natural gas production in the future.  Ideally, this could be achieved through agreements with institutions involved in both exploration and the LNG retail business and by giving control of the LNG supply portfolio to the Ministry of Petroleum Resources Development, who currently has responsibility for both upstream and downstream gas. 

  7. Address the lack of an independent regulator in the petroleum. This can be achieved through legally empowering the regulator (Public Utilities Commission of Sri Lanka) with clearly defined roles and responsibilities. It must further be noted that the role of the regulator should ideally be an evolving one.

  8. Develop a technology roadmap for a 100% (renewable/indigenous) grid, utilising global expertise to create a notional generation plan for alternative scenarios.

  9. Phase in unbundling of the CEB based on functionality, with independent financial reporting, beginning with independent accounting between generation units, transmission licensees, and distribution units. CEB to conduct mandatory dispatch audits periodically to ensure transparency and good practices within the system. Listing a percentage of State-Owned Enterprises (SOEs) on the stock market would also help to increase public oversight and increase accountability.

  10. Attract private sector participation in the sector through public private partnerships, including in electricity transmission and distribution.

  11. Introduce Key Performance Indicators (KPIs) aligned with economic and environmental goals for the utility companies.

  12. Align generation planning with sustainability goals and in-line with technological trends of the sector. Planning should be restricted to a single currency, with a sensitivity analysis taking into consideration full social and environmental cost.