July 16, 2024

Cheaper Energy through Independent Power Producers?

2 min read

The government has already explored the offshore wind power potential in the country especially in the North and East, expediting two mega wind power projects of 286 MW in Mannar and 234 MW in Pooneryn undertaken by India’s Adani Green Energy Ltd for an investment of over US$ 500 million.

Power and Energy Minister Kanchana Wijesekera disclosed that Adani Green Energy has been given approval to implement the projects in August and it has expressed commitment to complete the projects by December 2024.

A cabinet paper on the same projects, dated August 14, 2023, noted that it should be considered as a government-to-government arrangement.

According to the proposed power purchase agreement, Adani Company has quoted the selling price of a wind power unit to be generated by Mannar wind power plant at around $0.14 cents equivalent to around Rs. 46.

(Courtesy- Sunday Times)

A source close to the project  stated ‘The recent grid failure acts as a wake-up call. Sri Lanka must act promptly to avoid global stagnation. Breaking from the CEB-dominated system to encourage healthy competition among stakeholders is crucial. It promises enhanced service quality and reliability, crucial for Sri Lanka’s continued growth and relevance on the global stage.

The state of power generation and distribution is pivotal for a country’s economic stability and progress. Sri Lanka faces escalating generation costs, hindering its economic foothold, unlike its neighboring nations benefiting from Independent Power Producers (IPPs). Recent grid failures expose systemic issues, stemming from inadequate transmission planning and maintenance.

Technological lag in distribution leads to inefficiencies, contrasting with advanced private setups in India managed by CESC, Adani, Tata, Torrent, prioritizing customer empowerment through technology. Sri Lanka’s sector, monopolized by CEB, requires reform. Introducing private entities under strong oversight will harmonize growth and consumer interests, essential for reliable electricity, pivotal in homes, businesses, and overall economic activities.

IPPs such as Adani can provide a cost reduction amounting to 30% and the cost per unit falls below USD $0.10. The benefit of the price reduction can be given to the consumer.

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