Sri Lanka gets 6000MW of renewable energy proposals as competitive bidding ends

ECONOMYNEXT – Sri Lanka had received proposals from operators to build around 6,000MW of renewable capacity when expressions of interest were called, according to industry officials as competitive procurement was also ended.

Adding 1.500 MW renewable capacity to the grid will not be a challenge, officials of the Federation of Renewal Energy (FRED) have told reporters.

Sri Lanka had high feed-in tariffs above global rates for renewable energy at one time, which were given against the country’s electricity law. The Feed-in Tariffs were then halted and competitive bidding was brought in.

When feed-in tariffs were in place over 700MW of capacity were added, according to the renewable industry.

The renewable industry representatives say under competitive tendering new additions to the grid had reduced.

However, Ceylon Electricity Board officials have said that tendering was progressively blocked at high political levels and tender documents prepared by the CEB did not go past the minister with pressure put into bringing back feed-in tariffs.

A case in point was a tender for 190 MW of renewable energy plants which was systematically blocked at the minister level pending the bringing back of feed-in tariffs according to critics.

Related: Sri Lanka renewable power competitive tenders stuck for 10 months without a ministerial nod

Sri Lanka’s sustainable energy authority has now outlined the following renewable feed-in tariff for CEB to procure plants without competitive tender.

These include 32 rupees per unit for mini-hydro, 29 for wind and over 33 rupees per unit for solar, reducing over time. However, there is a scalable rate for operation and maintenance.

Sri Lanka’s parliament backed by the ruling party recently changed the electricity law to allow non-competitive bidding, which the opposition said will pave the way for systematic procurement corruption.

Related:  Sri Lanka opens floodgates for corruption in power sector: Harsha

Sri Lanka’s electricity sector has been a magnet for corruption with political and business interests trying to push high-cost plants to the grid, including in LNG procurement.

Sri Lanka however is now in the worst currency crisis in the history of the island’s intermediate regime central bank after soft-pegging macro-economists printed money to suppress rates yet again.
(Colombo/Oct23/2022)