Interview: Damitha Kumarasinghe

What can the Least Cost Long-Term Generation Expansion Plan (LCLTGEP) do to improve energy independence and balance public and private spending?

DAMITHA KUMARASINGHE: The LCLTGEP is designed to meet rising electricity demand for the least cost and fulfil our policy goals related to energy security and self-sufficiency, especially in the electricity sector. The government’s goal is to generate 50% of electricity from renewables, 20% from coal, 20% from domestic natural gas and 10% from oil by 2030. To meet these targets, renewables must increase by 4000 MW above 2018 levels, and considerable foreign direct investment (FDI) is required. Furthermore, considerable investment is required for the Ceylon Electricity Board to strengthen the grid and expand the network. The commission has established transparent energy procurement guidelines to meet the requirement of the LCLTGEP, and all energy plants are procured via a tendering process under those guidelines, which creates a transparent and fair mechanism to invest in energy generation.

What benefits will come with shifting oversight of the water and petroleum industries to the PUCSL?

KUMARASINGHE: The lack of a fully fledged and independent regulator in the water and downstream petroleum sectors is an issue that has been raised by most of these sectors’ lenders and investors. Timely tariff revision and the implementation of technical and safety regulations will help to stabilise both sectors and attract FDI. Moreover, the creation of a transparent, fair and accountable decision-making environment through PUCSL regulation will improve certainty in the industry and reduce perceived risks to FDI.

The amended Petroleum Products (Special Provisions) bill has been prepared to entrust the regulation of the petroleum sector to the PUCSL and is awaiting parliamentary approval, while acts related to the water sector have also been drafted. As a result, 2019 will be an important year for the regulation of both sectors.

Where are the biggest opportunities for private investment in power generation?

KUMARASINGHE: The renewables segment offers investment opportunities in large-scale wind and solar development for the period up to 2030. Moreover, rooftop solar projects are moving very fast, and the technologies used therein have benefitted from considerable private investment. In addition, approximately 1700 MW of liquefied natural gas power plants will be commissioned within the next decade, which provides opportunity for further investment in that segment.

How will better product and service delivery outside the western province kick-start rural growth?

KUMARASINGHE: Almost every citizen of Sri Lanka has access to electricity, so limited access is not a barrier to rural economic development. However, certain areas lack sufficient grid capacity to establish rural industries or connect to distributed generation plants like rooftop solar or wind. Thus, investment is needed to strengthen the grid and increase supply to meet growing demand. Rural access to petroleum products must also increase. This is currently limited in terms of commercial viability.

In the water sector, investment is required to improve rural access to drinking water, as safe and available water is important for public health. Improved supply and sanitation, as well as better resource management, can boost growth, contribute to poverty reduction and help prevent rural-urban migration. Access can be improved by a range of methods, including rain collection, water recycling, and the construction of wells and pumps, which could involve local communities.

Access to safe and sufficient drinking water can also be widened by the addition of centralised distribution systems within communities. Pipe-borne water would improve public health and release more productive labour hours by reducing the time currently spent accessing water. The funding for these new systems could be secured through public-private partnerships.