- Introduction to NCRE
- For More Information
- National Energy Policy
- Present Status
- NCRE Tariff
- What I shall Do
- Service Contracts
The Sri Lanka governmental policy directions for power sector envisages that the hydro power generation potential of the country will be developed to its full potential as it is the major indigenous resource for power generation as at present. Under this policy, all large-scale hydropower generation facilities are to be remaining under government control for the foreseeable future. Private sector financing will be utilized for power generation from small hydro power plants.
CEB Assistance Provided for the Development of the Mini Hydropower Sector
Ceylon Electricity Board has promoted generation of electricity using Renewable Energy Resources since early nineties by giving the required assistance to the private sector, which includes training & capacity building, pre feasibility studies and resource assessments.
The procedure for electricity purchases from small power producers (SPPs) by the CEB was regularized beginning 1997 with the publication of a standardized power purchase agreement (SPPA) which included a scheme for calculating the purchase price based on the avoided cost principle. This was offered to all sources of power plants of capacity less than 10 MW.
The government 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.
Keys to Success
Long-term concessionary financing through RERED Project
As part of the commitment of the Government to accelerate the development of renewable energy generation as well as to integrate the use of non-conventional renewable energy within the power sector, GOSL approved the joint World Bank and the Global Environment Facility (GEF) assisted Renewable Energy for Rural Economic Development (RERED) project. Through the RERED project, GOSL aims to foster the rural economic development and improve the quality of life in rural areas by providing access to electricity, and expand the financial support for the mini hydropower projects with low cost funding. The executing agency of the RERED project is the Ministry of Finance and Planning. Project implementation, coordination and management are the responsibility of the Administrative Unit set up within the DFCC Bank.
Positive features of the Standardized Power Purchase Agreement (SPPA)
The SPPA was developed with the assistance of the World Bank and drafted with the standardized terms and conditions. All energy produced by the facility will be purchased by the CEB and no penalty for the non-delivery of energy from the facility.
Following sources of energy are considered as Non conventional Renewable Energy sources
- Hydro Energy (Mini Hydro)
- Wind Energy
- Biomass (Dendro) Energy
- Agricultural & Industrial Waste Energy
- Municipal Waste Energy
- Waste Heat Recovery Energy
- Wave Energy
- Solar Energy
National Energy Policy
The Government will endeavor to reach a minimum level of 10% of electrical energy supplied to the grid from NCRE by 2015
CHALLENGES faced by Sri Lanka’s Energy Sector are many. While ensuring a continuous supply of electricity and petroleum products, the growing economy has to manage a strategic balance between indigenous energy resources and imported fossil fuels. Electricity supply to household needs is yet to reach a quarter of Sri Lanka’s population. Commercial energy utilities are required to be further strengthened to improve their financial viability and service quality. The involvement of the country’s population in the investment, operation, regulation and delivery of energy services needs to be increased.
Present Status of Non-Conventional Renewable Energy Sector (as at 2017-07-31)
|No||Description||Project Type||No.of Projects||Capacity (MW)|
|01||Commissioned Projects||Mini Hydro Power||181||353.744|
|Biomass-Agricultural & Industrial Waste Power||4||13.080|
|Biomass- Dendro Power||5||11.020|
|Total – Commissioned||213||557.654|
Non-Conventional Renewable Energy Tariff
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.
Interested registered institutions can do following types of businesses with CEB. The main types of service contracts are as follows
- Service Connection Contracts
- Construction / Maintenance Contracts
- Way-leave clearing contracts
How to Get Registered as a Service Contractor?
CEB obtains the above services from registered private contractors. Therefore one needs to get resisted with CEB as a service providing contractor.
Each CEB provincial office registers contractors for these services normally on annual basis. This is initiated by calling for Registration of contractors through paper advertisement in national newspapers. During the latter part of each year (around August/September onwards) requests are published in National newspapers to register contractors for these activities. Those interested can respond by submitting their information as requested in bidding documents available at the respective CEB Provincial office.
Once obtaining this information CEB will evaluate the information by checking the submitted data with inspection of original documents, interviewing the parties etc. and selection process will be made on a marking scheme.
Depending on the requirement of number of contractors and the number of applicants (who are capable of meeting the requirements of the CEB) final selection will be made. Those selected will be registered as contractors.
Details regarding the probable time of advertising for registration of contractors can be obtained by contacting the Chief Engineer, Commercial of the CEB Provincial Office.