The 2005 budget jacked up renewable energy tariffs, stepping squarely into a running battle between mini-hydro developers and the state power utility. The 2005 budget jacked up renewable energy tariffs, stepping squarely into a running battle between mini-hydro developers and the state power utility. Finance Minister Dr. Sarath Amunugama said on Thursday that renewable sources of energy would be given an all-inclusive tariff of about US$ 0.06 as an incentive, which works out to about Rs. 6.30 a unit.
“The way we understand it, the Ceylon Electricity Board will continue to calculate the avoided cost rate, and the Treasury will step in with the balance,” President of the Grid Connected Small Hydro Developers, Dr. Nishantha Nanayakkara said.
Mini-hydro tariffs have long been calculated on the principle of avoidance cost – the average cost the utility pays others, especially thermal to buy power.
Still pegged to the cost of expensive thermal fuel, that doesn’t do much to pass on the benefits of a diversified and cheaper fuel base to users.
The tariff is based on a complicated formula, which involves the actual cost as well as projected