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  • Electricity Pricing Policy in Sri Lanka
  • Sri Lanka Electricity Industry: Long Term Thermal Generation Fuel Options
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Research

Electricity Pricing Policy in Sri Lanka

The paper reviews the electricity pricing policy in Sri Lanka. The electricity supply industry still remains a State-owned monopoly in Sri Lanka. While the electric utilities are financially non-reliant on the State, their investment decisions and pricing policies are heavily controlled by the Government through a mostly ad-hoc process. The paper explains the present policies of electricity pricing and metering, and highlights the weaknesses in the price structure and in the price levels, in which significant anomalies have remained for several years. Apart from the heavily distorted price structure, specific problems remain in the tariff for households, in the time-of-day tariff for industries and in the classification of industrial/hotel customers.

The paper also highlights the absence of in-depth analyses by the two utilities of their costs of supply, and the inadequate correlation between the prices and the costs. It also shows the weaknesses in the mechanism for development, evaluation and approval of revisions to the price structure, and calls for the establishment of an independent regulatory body to examine pricing issues.

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Sri Lanka Electricity Industry: Long Term Thermal Generation Fuel Options

Energy supply in Sri Lanka is mainly based on three primary sources: hydroelectricity, biomass and petroleum. Sri Lanka's electricity generation sector has been dominated by hydroelectricity for many years. With the saturation of economically exploitable hydropower capacity, and in the absence of any other reliable indigenous primary energy sources that can be used for large-scale electricity generation, the paper shows that Sri Lanka will have to rely heavily on thermal generation based on imported fossil fuels. Therefore, fuel choice for thermal generation becomes an important component of generation system planning.

The main objective of this policy paper is to examine the technical, economic and environmental implications of different thermal generation options available for the Sri Lankan electricity industry in its expansion within the next 20 years.

The paper argues that for the next 15 years the only fuel option for thermal generation the country's electricity industry has with regard to base-load operation is coal. The paper also points out that the fuel choice for intermediate and peak load operation needs to be petroleum based. Given the cost benefits, the paper does not see any role for Natural gas, at any level of power generation within the next 15 years.

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Presentations

Nisha Arunatilake

Power Crisis in Sri Lanka: How it Affects the Economy
Lecture to students, Law Faculty, University of Colombo,
Colombo, Sri lanka
26 October, 2001

The Energy Sector in Sri Lanka. Implications for Regional Cooperation
"Regional Cooperation in the Energy Sector",
BRAC-Centre, Dhaka
17-18 March, 2001