SL Renewable Energy Associations allege:
By Hiran H. Senewiratne
Government pays higher terms on a unit cost for Adani Group’s renewable energy company compared to local developers, which has created unfair situations for local developers, Sri Lanka’s Renewable Energy Associations say .
“The Adani Group is exploring possible investments in Sri Lanka’s wind and renewable energy sector and the government has agreed to pay six hundred US dollars for one kilowatt hour/unit, while local developers only receive a little more of two hundred US dollars, which really discourages them, said Riyaz Sangani, member of the exco, Biomass Developers Association.
Sangani made the comments during a press conference organized by renewable energy associations which include developers of small hydro, wind, solar and biomass power plants and the Solar Industries Association of Sri Lanka. The event took place at the BMICH on Wednesday.
Sangani said Adani Group has only signed the agreements but has not yet started its feasibility studies for the proposed projects. “I am sure that with the depreciation of the rupee and the bad decision-making process of the government, they will withdraw from the proposed projects,” he added.
“The government has ignored its priorities as this country’s national grid now stands to lose 1250.9 megawatts (MW) of electricity generated by renewable energy developers because the Ceylon Electricity Board (CEB) has failed to pay electricity supplied by them since August 2021. , Sangani explained.
“At this critical juncture where the country is in dire economic straits, renewable energy developers are finding it difficult to cease operations as they are unable to meet their critical payment obligations, including payment of employee salaries, l ‘maintenance and debts, Secretary, Wind Power Association Manjula Perera said.
“The net effect of this would not only be that the country would lose this mass of clean energy, but it would lead to a severe economic crisis because the alternative would be to procure thermal energy, burning fossil fuels at a Astronomical cost of around Rs.90/- per unit as opposed to the average cost of Rs.15.77 paid for renewables.This will exacerbate the forex crisis and will be unbearable for the country at this stage, Perera said.
“Overall, CEB owes around Rs. 22 billion to renewable energy operators. This has brought the industry to its knees, posing a serious threat of not being able to pay the salaries of around 7,000 employees, which could lead to a serious social crisis, he said.
“At the same time, banks have lent around Rs. 60 billion to the industry and servicing of these loans will soon stop,” said Grid Connected Solar Power Association Chairman Lasith Wimalasena.
“It can also have an impact on the banking system. On the other hand, there are about 550MW of projects in the pipeline for imminent financial close and if these are not funded and developed, the country will turn to high cost fossil fuels for electricity, further aggravating its economic difficulties, Wimalasena said.
“Sri Lanka has a huge energy deficit due to the wrong type of power plants in operation. Renewable energy is the cheapest and cleanest option available, however, these defaults will seriously discourage potential investors in the sector, completely halting the country’s ambition to become a high-generation renewable energy nation. and also failing to meet its obligations to the United Nations Sustainable Development Goals. (UNSDG), he added.
“CEB’s current average cost of a unit of electricity delivered to consumers is estimated at Rs. 60/-, as of April 20, 2022. The cost of direct generation itself from CEB power stations ranges from Rs. 154 per unit, Kelanitissa Power Station being the highest, and Rs. 7.19 (large hydro) being the lowest.
“Other renewable power plants operated by private owners are at their lowest after the cost of large reservoir-based hydropower plants and the recently commissioned 100MW wind power plant in Mannar, said the president of the Solar Industries Association, Kushaan Jayasuriya.
“The CEB should focus on cost-effectiveness and the promotion of renewable energy by creating greater flexibility in decision-making within the Sustainable Energy Authority, the Ministry of Energy, the Ministry of Finance, of the Attorney General’s office and the PUCSL for the good of the country and its people, Secretary, said the Association of Small Hydro Developers, Warna Dahanayake.
“The future target of 70% of electricity generated from renewables means it will never materialize as late payments will drive away investors,” he added.