Sri Lanka opposition says bulk of costly IPPs outside their remit

Apr 26, 2013 (LBO) – Most of Sri Lanka’s private power production capacity has been signed up by state-run Ceylon Electricity Board, outside their administrations and the problems are with ‘negotiated’ plants, an opposition legislator said. Coolair 2005 (not in operation) and Aggreko 2005 and the controversial West Coast Kerawalapitiya the largest ever private plant of 270MW was initiated in 2005.

ACE Power Matara, ACE Power Horana and Lakdhanavi current plant was dis-allowed by the regulator for 2013, as their contracts had expired.

A plant owner’s profit comes from the so-called capacity charge, which is a fixed fee paid for the cost of capital in building the plant and keeping it ready. Each year it is supposed to go down as loans are repaid.

The ‘energy charge’ is a re-imbursement for fuel, and is based on the efficiency of the engine. In competitive bidding plants are evaluated on both criteria and they are under pressure to keep them low.


According to information submitted to a public hearing by power sector expert Tilak Siyambalapitiya on April 04, the Kerawalapitiya has a high capacity charge and the Asia Power has one of the highest even after more than 10 years in operation.