Green Money

Mar08 (LBO) – The Treasury is to fork out a subsidy for wood based electricity generation, making tariffs for dendro-power higher and more investor-attractive. State utility, Ceylon Electricity Board (CEB) pays private developers who supply electricity to the national grid, on the basis of a Standard Power Purchase Agreement.

Suppliers like mini-hydros are paid on a set of published tariffs, based on avoided cost, or how much CEB saves by running hydro instead of a costly diesel plant.

The Treasury has agreed to pad up CEB’s average tariff of about Rs5.50 for a unit of dendro power, to Rs8.50 a unit, to increase returns for dendro-power producers.

The Treasury has already agreed to set aside Rs100 million for this scheme, and a first instalment of Rs25 million has been approved for this year, Ananda Gunasekera, Chairman of the Energy Conservation Fund (ECF), told LBO on Tuesday.

The funds will be routed through a new Sri Lanka Energy Fund that has been set up and will be managed by the ECF, though plans are to make the fund sustainable.

Options still being thrashed out include a tax of less than a rupee per litre on petroleum f