Sri Lanka promises no power cuts but utility losses up

July 12, 2011 (LBO) – Sri Lanka will not impose power cuts although hydro-power reservoirs have run dry owing to drought but losses in the state utility will rise as it relies more on high-cost thermal power plants. Power minister Patali Champika Ranawaka said power generation capacity in hydro-power reservoirs had fallen to 29 percent because of the drought forcing the Ceylon Electricity Board (CEB) to use more thermal power plants.

“It costs the CEB 19 rupees to generate a unit of electricity from diesel-fired thermal power plants,” he told a news conference. “But power is sold at 13 rupees with a loss per unit of six rupees.

“Until the rains come, the bulk of power will have to come from thermal plants because of which the CEB’s losses will increase.”

Ranawaka said the CEB loss was forecast at 16 billion rupees this financial year before the crisis arose but that now losses will be more. He did not say how much the loss will be.

Ranawaka admitted the CEB had been forced to restrict demand at times in recent weeks, during which consumers complained of unofficial power cuts.

But he assured consumers this would not happen in future and that if power cuts were needed the CEB would make public