Low cost power plants the remedy for electricity crisis -Dr. Siyambalapitiya

The private sector has invested in 530 Megawatts of oil burning power plants, and 120 MW of renewable energy power plants and further large investments requested for generation and transmission development will also come in the near future, Consultant, Dr Tilak Siyambalapitiya, said.

Addressing a seminar on "Infrastructure Development" organised by the Chamber of Construction Industry held at Galadari Hotel Colombo, he said adequate funds are available for investments from both conventional and private sources but there should be a further improved and focused political bill, a better professional approach and a larger, diverse-hardworking professional teams.

Siyambalapitiya pointed out that recovery of full cost is possible as electricity tariffs are nearly at cost recovery levels in average terms as at March 2008. But the cross subsidies exist, discouraging efficiency improvement.

However the energy policy says that all will pay cost-reflective priced in 2008, the targeted subsidies for " lighting" he said .Siyambalapitiya stated that the electricity tariffs now is the most complicated ever in Sri Lanka due to unwilling to simply tariffs, make them cost-reflective and ad- hoc announcements of subsidies, not followed- up with cheques from the treasuray to CEB and LECO have made it complicated.

The estimated fuel bill of CEB and private operators in 2008 stands at Rs 110 billion, to produce about 6000 million units of electricity as a result of building wrong types of power plants from 1996 to 2000.

He said that in any other country, this would be about Rs 60 billion.

Siyambalapitiya regretted that country's electricity prices are non competitive in the region.

Elaborating on the electricity cost challenge he said the generation costs in Sri Lanka are rapidly rising in grids with a large diesel ,fuel - oil share but countries like India with a high share of large hydro and coal -fired thermal have been relatively safe from the turmoil in the oil markets. Countries such as Bangladesh, Pakistan and Malaysia with indigenous gas too have managed to hold the prices competitively.

Meanwhile subsidies and delayed price increases have financially crippled the electricity utility of the CEB.

There had been two nearly - total national blackouts so far this year and it is necessary to invest on modernising the transmission net work, as many industries outside the WP have immense problems with reliability of supply due to poor maintenance.

He pointed out that customercare can be improved significantly through commercially-oriented thinking and attitudes. Finally the energy efficiency in the country needs an additional new focus and all have a potential to save five per cent in low cost and most have a potential of ten per cent, Siyambalapitiya said.

Further he said reforms and privatisation would not reduce prices in the immediate future but in the long term it is possible if low cost power plants are built.