Consumer Electricity Tariff - Need is for a Long Term Vision - Eng Parakrama Jayasinghe

08th April 2013,By Eng Parakrama Jayasinghe


Energy Security is within our grasp!

What is needed is the courage to grab it.


The current mire

• The tariff is the highest in the region
• The cross subsidies cause dissatisfaction
• The CEB continues to lose money every year
• There is no solution in sight
• World energy trends are ignored

Who pays for the subsidies?

• The electricity bill may seem low with the subsidies
• But the Billions of deficit is covered by public funds – that is all of us
• The real beneficiaries are the Oil and Coal suppliers and their local agents

Who is responsible?

• We all are paying for the cardinal sin of believing the myths of cheap electricity round the corner and abdicating our responsibility to speak out.
• The latest is Coal power at Rs 7.50 according to the Minister when the fuel price alone per unit is about Rs 7.00
• Many excuses are offered but !
• Those in authority has not been able to offer a viable solution and have let the country down
• It is time for the consumers to make a stand
• But the solution is not to expect more and more subsidies

How the high tariff should have worked - The Rice Story Vs The Electricity Story





































The problem of Peak Load

• The current generation capacity is enough to meet the average demand. ( 3100 MW Vs 2100 )
• New coal plants are proposed to meet the additions to peak load ignoring the ever increasing price of coal
• Indigenous alternatives are not even considered as candidates in the planning

The way out

The tariff policy must have the objectives of :-

• Time based target for limiting fossil fuel usage to a minimum
• Do not build new coal plants to meet the peak load  demand – there is enough capacity for many years to come to meet the average demand
• Promote self generation at least during peak hours to avoid the need for any more coal plants

Recommendations

• Impose limits on total generation cost  for the coming years.  The current expectation that what ever amount CEB spends have to be recovered from consumers is untenable and unsustainable. The expectation that the fuel surcharge can be removed with termination of oil based power is a fallacy as the coal prices too are moving up
• Phase out the subsidies gradually
• Offer time of day tariff to all segments – GP 1 and HP 1 to start with this year
• Make the peak time tariff cost reflective and the off peak tariff low enough to incentivize self generation
• Provide additional incentives for self generation using indigenous resources

Daily Load Curve – Up to 2007
 















Predicted Daily Load Curve - From 2007 to 2026
















Fossil Fuels Price Movement

Related Info :

• Cost Relective Tariffs for Large Consumers to Encourage Self Generation by Indigenous Sources to Cover Part of Their Requirements. Reduced Burden on CEB May Help Do Away with Coal Power Plants - Eng Parakrama Jayasinghe

• Sri Lanka Should Reduce Peak Power Demand and Trim Most Expensive 5pct of Energy to Eliminate Losses at CEB - LirneAsia, a Regional Think Tank

• Sri Lanka's Power Monopoly Draws Fire at Public Hearing on Proposed Tariff Hike. Costs Claimed by CEB are Murky and Efficiencies of Plants are not Independently Audited

• Electricity Tariff Hike - Industries Get Biggest Subsidy, Hotels Marginally Subsidized & General Purpose Customers to Pay in Excess of Costs - an Analysis by the Regulator

• Electricity Tariff Increase - First, Operate Hydro Plants in an Optimum Manner, Improve Plant Efficiencies, Cut Losses and Switch to more Economical Fuel

• Sri Lanka Combined Cycle Power Plants more Expensive than Diesel Engines - Information on Power Sector not Available in the Past Now Coming Out