‘Mini hydros’ could save Rs 50 b annually
Sri Lanka could save over Rs 50 billion thermal power generating cost
annually if authorities minimise red tape and allow mini hydro power
plants get off the ground.
Currently there are several mini hydro power plants pending approval
and they could generate over 500 MW power in three years time.
Bhathiya Ratnayake addressing the
‘mini hydro’ event. Dr Nishantha Nanayakkara, Past
President, Riyaz Surgni, Secretary, Anil Makalanda,
President and Prabodha Samarasekera,Past Vice President were
also present. Picture by Saliya Rupasinghe
Vice President, Small Hydro Power Developers Association Bhathiya
Ratnayake said the present 94 mini hydro plants with 201 MW capacity
saves Rs 17 billion annually . This is 5% of the total power generation
and the government's vision is to generate10% of total requirement by
Ratnayake said that the Ceylon Electricity Board gets a unit of
thermal power at around Rs 21, while they purchase an unit of hydro
power for Rs 13. “We also appeal to the CEB to revise this rate,” he
Secretary of the Association M Rizmy disclosed that an entrepreneur
has to go to 12 institutions such as Ceylon Electricity Board,
Irrigation Department, Water Board, Mahaweli Authority, Environmental
Authority, Divisional Secretariats and Pradeshiya Sabhas to get the
green light to commence a project and this takes nearly two years thus
discouraging the investor.
Mini hydro plants are developed in remote isolated villages thus
creating infrastructure development and job opportunities to village
Furthermore, the professional knowledge gained by entrepreneurs,
engineers and financiers in this regard is now used in East Africa and
surrounding Asian countries, bringing in much needed foreign income to
“Government intervention to fast track the development of this sector
is needed with a fair and transparent tariff offered and red tape cut
off, which will automatically attract foreign and local investments
required to boost the sector,” he said. Recent macro economic
developments in Sri Lanka, including rupee depreciation and especially
the drastic increase in interest rates, would have serious implications
on the viability of investors commencing small hydro power plants.
The government should step into mobilizing long term project lending
for the small hydro power sector, especially from state banks, with loan
tenures of 15 years and longer plus moratoriums at project inception of
up to 5 years.
At present the typical loan tenure is eight years. The cost of the
loan and its repayment account for over 50% of the unit cost from a
typical small hydro plant.
The present power generating system of Sri Lanka is predominantly
based on fossil fuel.
Over 85% of the total daily generation is produced from coal power
plants and CEB and privately owned thermal power plants. With post war
industrialization, service and consumer sector growth of the country,
the demand for electricity is expected to grow at nearly 7.5% every
Thus it is clear that existing thermal plants and large-scale hydro
power systems alone cannot meet the current demand.
Due to its adverse effects such as pollution concerns and high
expenses due to fuel importation, thermal power generation in Sri Lanka
can weaken the macroeconomic image of the country drastically.
Maximizing renewable energy production to the full potential is the most
suitable and sustainable form of energy generation accepted globally,
and it is in the interest of national energy security.