Interview: Damitha Kumarasinghe
How would Sri Lanka benefit from building a grid interconnection with India?
DAMITHA KUMARASINGHE: The South Asian Association for Regional Cooperation (SAARC) countries have all agreed in principal on an integrated SAARC grid. India is already connected to Bangladesh, Bhutan and Nepal. In Sri Lanka’s case, we are, along with the Maldives, the only country still not connected to the subcontinent. A feasibility study regarding interconnection was carried out a few years back.
If Sri Lanka does connect with India in the future then we have access not just to the Indian market but to the world beyond. There is huge opportunity here. We can purchase electricity when our prices are high, with countries like Pakistan possessing hydro and Bangladesh having natural gas. Likewise, when SAARC countries have higher prices, we can export to them, given our potential for renewable energy and the coal plants we are building. However, the first step must be a connection with the Indian subcontinent.
The technical merits are all there, but there are a number of arguments made by various parties about the social implications of connecting to the subcontinent. Over time, we need to hold consultations and awareness programmes for the general public.
Where are the biggest opportunities for private sector investment in electricity?
KUMARASINGHE: According to Sri Lankan law, transmission and distribution all sits with the Ceylon Electricity Board (CEB), so the only possible investment area is generation. Demand is growing within Sri Lanka at the same time as this interconnection discussion is going on, meaning that generation is open for private participation, and a lot is going to be required over the next 20-30 years.
One of the biggest areas for this is renewables, which the government has declared an official policy and priority going forward. There is significant solar and wind potential, particularly around the northern and eastern sides of the country. To date, only about 60% of generating assets are with the CEB, the rest being fulfilled by many independent power producers, including hundreds of renewable energy generators producing less than 10 MW each. So it is already a proven fact that smaller players are able to participate effectively in the mix.
What modifications can be expected to Sri Lanka’s existing tariff structure?
KUMARASINGHE: On the issue of tariffs, we are now looking at expanding our time of use (ToU) metering. A few years back we introduced mandatory ToU tariffs for use of industrial- and general-purpose commercial energy, and in 2015 we offered three-phase domestic customers an optional ToU tariff. Now we are having discussions with the CEB and Lanka Electricity Company (LECO) to use ToU tariffs with other domestic customers. With both the CEB and LECO agreeing to this rollout quickly, the only real issue now is the availability of ToU meters. Once this is done, we can promote efficient use of electricity as well as provide cheap electricity at cheap times for transportation purposes, which means not only electric cars but other modes of electricity-based transport.
How do electricity tariffs in Sri Lanka compare with those elsewhere in the region?
KUMARASINGHE: In Sri Lanka, more than 50% of the population gets very cheap electricity, at an average unit price of $0.03, while about 70-80% of the population still gets electricity at a rate we consider to be very economical. Only about 3-4% of domestic consumers use a large amount of energy, and they already have very high tariffs. It is also important to note that if you look at industries, rates are very competitive, with ToU meters sitting at around $0.10 at the highest bracket, which serves manufacturing.
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