Liquid Potential

Mar. 31 (LBO) – Small hydro company Vallibel Power Erathne, that opens its share issue on April 6, is bullish on Sri Lanka’s hydro and other renewable energy prospects, despite climbing costs. The Vallibel Power group operates 18.9 megawatts in small hydro plants, with plans to go up to 45 MegaWatts over the next few years, selling electricity to state utility the Ceylon Electricity Board (CEB).

Vallibel Power Erathne at 9.9 MW is the largest mini-hydro plant to date, situated at a high rainfall location Erathne, and is considered to be highly capital efficient, with costs per megawatt of Rs75 million, over the general standard of Rs90 million.

It also has a guaranteed floor tariff of Rs5.14 a unit or 90 percent of the rate effective when signing the Standardized Power Purchase Agreement (SPPA) with the CEB.

Private power developers are paid on the basis of avoided cost – or how much the CEB saves by not using costly diesels, calculated for wet and dry seasons.

Heavy Start Up Costs

But capital costs of mini-hydro projects are rising, making new investments less attractive, top officials say, with CEB also restricting new projects, saying its finely stretched d

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