Commitment of Ceylon Electricity Board in Power Generation using RE Sources

Ceylon Electricity Board is the pioneer of implementing Renewable Power Generation in Sri Lanka. CEB's Renewable Power Generation dates back to 1969, the inception of CEB, with Hydro Power Technology and it managed to generate Power entirely from Hydro Power to the whole country in the initial era. Later, CEB took the initiative to open business opportunities to private investors by allowing Mini-Hydro Power Plants to get synchronized to the Power Grid.

While CEB's primary focus on renewable energy was on major Hydro, CEB researched for other renewable resources in parallel as harnessing major Hydro potential was gradually reaching the ultimatum. As a result, CEB introduced Wind and Solar Power Generation taking another gigantic step towards a Carbon Neutral Sri Lanka.

Along with the varying Government policies from 2017 and with the latest target given to achieve at least 70% of the energy generation via Renewable Energy sources, Ceylon Electricity board has grabbed the opportunity to accelerate the generation of Solar Power despite numerous technical limitations.

Solar Power Generation is the main form of renewable energy source that indicates the highest growth during the last few years.  CEB has classified the Solar potential identified in the country in to following categories of development and are implemented through several configurations appropriately.

1. Ground Mounted Solar

a. Large and Medium scale Solar parks (10-100 MW)

b. Scattered small scale Solar projects (1-10 MW)

c. Scattered small scale Solar projects in LV Network

2. Rooftop Solar (Net Metering, Net Accounting, Net Plus)

3. Floating Solar

Annual electrical energy produced from Solar has risen nearly 46% in past two decades as illustrated in figure below. Total capacity of commercial Solar Power Plants by end of 2020 was 67 MW and nearly 347 MW of Solar roof tops were also connected by end of 2020. Scattered developments of small-scale Solar Power Plants have been already initiated and feasibility studies were initiated to develop Solar Power Plants in park concept.

Cost of Solar Power Generation technology is becoming increasingly competitive and a steady and strong growth is expected to continue for both rooftop and ground mounted applications in commercial scale. Along with these initiatives, CEB Engineers are faced with new challenges in grid connection owing to the technical limitations in the Power Network to cater the rapid increase of Solar Power projects and synchronizing the new Power generation projects with the existing Power network that has maintained constant synchronization over the past decades. To promote Rooftop Solar Power Generation, “Energy Banking Facility”, commonly known as the “Net Energy Metering Facility” was introduced for electricity consumers. However, commercialization of Power Generation provides room for low-cost, low-quality products that will disturb the entire Power network of the country. CEB Engineers are aggressively working on resolving such dynamics to enable Solar Power Generation retain a dominant share as planned in the 20 year long term Generation Plan

The government of Sri Lanka has identified the development of Renewable Energy Projects, as a matter of policy to diversify the electricity sector from high cost thermal power generation. Therefore, required incentives and assistance was provided for the renewable energy resource development (Mini Hydro, Bio Mass, Wind, etc.,). Further National Energy Policy 2006 has identified fuel diversify and energy security in electricity generation as a strategic objective and development of renewable energy projects was identified as a part of this strategy. In view of above action has been taken to introduce a cost based, technology specific, three-tier tariff instead of avoided cost based tariff with effect from year 2007.

Cost based, technology specific NCRE Tariff

The cost based approach of determining tariffs for NCRE power plants is commonly used in many countries. The tariff that is computed using this method, allows a project developer to cover its O & M and capital costs. Besides, it ensures an assured return on capital.

This method analyses the cash flows as a result of the project activity with return on equity as one of the components of cash outflow and estimates annual cost of generation. There are some variations in the application of this method. The tariff can be given in tiers where in the initial years (typically the loan repayment period), the tariff given is higher and then lower tariff is given for the subsequent periods, which covers the operational costs and the return on the investment. The cost escalations, the O&M escalation, fuel cost escalation, and incentives in terms of subsidy or other fiscal incentives can also be included while estimating tariffs by this method. The tariff calculated by this method varies from technology to technology depending upon the performance and costs. Moreover, the tariff estimation by this method solely depends on the cost and performance of the project/ technology.

In the cost based approach, ideally tariff should be estimated for each project. However, due to resource and time constraints, technology benchmarking is commonly used wherein the average parameters such as the plant factor and, capital costs, are used for estimation of tariff. Cost based, technology specific NCRE Tariff effective from 01/01/2012 until further notice

National Energy Policy

Sri Lanka has achieved several goals set in the National Energy Policy and Strategies (2008) in the completion of electrification and the development of the renewable energy sector on the island.

The importance of enhancing self-reliance and the continuous development of the renewable energy sector in Sri Lanka is also emphasized as a part of the Ten Pillars of the National Energy Policy (2019). It is described in greater detail on the Gazette Extraordinary No. 2135/61 of 09.08.2019 which can be download from here.

Present Status of Non-Conventional Renewable Energy (NCRE) Sector as at 31st May 2020