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Electricity Act Amendment passed despite objections

10 Jun 2022

  • CEB engineers’ threats fail to deter Govt.
  • Kanchana says over past six years, over 4,000 MW RE projects yet to receive CEB approval
  • Ex-Energy Minister Patali says it will hurt small and medium scale developers
  • PM Ranil welcomes rapid deployment of cost-effective renewable energy to grid
The third reading of the Bill to amend the Sri Lanka Electricity Act No. 20 of 2009, was passed in Parliament yesterday (9), with 120 votes in favour of it, while 36 voted against it and 13 abstained from voting, at the vote of the third reading, which took place late yesterday evening. “From 2013, a licensee of renewable energy could not enter the national grid without a tender process. There is a power crisis, and many are asking as to why we are not using our natural resources for electricity generation and are instead spending money. Because of certain parties who are not allowing private investments, we are in this crisis at the moment,” Minister of Power and Energy Kanchana Wijesekera said, commencing the debate in Parliament yesterday.  “Rs. 750 billion is needed for electricity generation per year, but the Ceylon Electricity Board (CEB) only gets about Rs. 250 billion as income. About $ 100 million is needed every month in order to import fuel for the thermal power plants. For coal for the coal power plant, we need $ 800 million for next year. We are not against tendering, but within the current Act, a person without any potential land to generate electricity using renewable energy sources can get the tender. Only thereafter will they search for land.” He pointed out that investors of certain projects who completed the tender process in 2019 by offering the lowest cost of generation are yet to implement them, and have in fact, in two instances, sought to increase their cost of generation this year.  “We are not saying to not go for competitive bidding. The Sri Lanka Sustainable Energy Authority (SLSEA) has a different Act. If the CEB won't purchase electricity after the SLSEA issues licences to these renewable energy providers, we must then close down the SLSEA. Someone gets a licence from the SLSEA because they have their own land to implement a project. Over the past six years, 580 megawatts (MW) of hydro energy projects, 769 MW of wind energy projects, 2,538 MW of solar energy projects, and 196 MW of biomass projects are yet to receive approval from the CEB,” said Wijesekera, emphasising the need for the Amendment.  On Wednesday (8) midnight, the CEB Engineers’ Union (CEBEU) declared a strike action over disagreements about the proposed amendment to the Sri Lanka Electricity Act.  The CEBEU’s strike action demanded the following: To withdraw the proposed Amendments with immediate effect; to stop the handing over of the country’s wind and solar resources to the Adani Group (paying in US dollars) without following the competitive bidding process; to stop driving the CEB towards privatisation under the guise of reform; and to appoint a suitable professional with unblemished character to the post of the CEB Chairman without further delay. “When the whole world is moving towards competition, we question the rationale of moving back in time to renewable tariffs decided by committees, an avenue leading to corruption. We apologise to the public for any inconvenience and appeal to all to understand that this fight is to prevent people corrupting the system in order to receive undue advantages at a later stage,” the CEBEU has stated.  Commenting on the claims about the Adani Group’s interests, Wijesekera said that it was a Government to Government memorandum of understanding (MoU) to develop 500 MW of wind energy projects in Mannar and Pooneryn. “They were then supposed to follow it up with a feasibility study. Maybe this study proposes that they want to sell a unit of electricity at USD seven cents. But we have not yet agreed to it. That would just be a proposal. Ultimately, foreign investments help local investors too as it brings in foreign exchange, thereby allowing local investors to open letters of credit to import their equipment. The generation cost of electricity will then eventually reduce which would help the public. I am ready to face anyone to reduce the generation cost,” said Wijesekera.  Samagi Jana Balawegeya (SJB) Opposition MP Dr. Harsha de Silva proposed a “compromise Amendment” which was ultimately not approved. “We would like to state that we are not against you. We support your argument that the generation cost should be reduced. We agree with renewable energy. The problem is in the competitive process. That is needed for large projects. For small ones in your personal land, that approval process should not take time and in that, we agree to any law you bring in. But for large projects, they cannot be done without the competitive bidding process. Show me any country that does projects without a competitive process,” said Dr. de Silva.  Thus, he proposed that, as a compromise, the tender process be eliminated only for projects which are less than 10 MW. “This would clear the backlog of small scale projects and still keep the tender process for large scale projects.”  “I fought hard to keep transparency in procuring large renewable energy projects by proposing a compromise Amendment to do away with tenders for projects generating less than 10 MW. My Amendment got 54 votes. Sri Lanka now joins an odd group of nations blocking competition. This goes against good governance,” Tweeted Dr. de Silva, following the vote. Opposition and SJB Leader Sajith Premadasa too said that although they agree that renewable energy should be brought in, the Government is attempting to cunningly bring in this Bill which would decrease competitiveness.  “It is not progressive; it is regressive. Competitiveness is needed to reduce costs and it benefits the country and the consumers. The Opposition is united against this Amendment which removes competitiveness. Let's continue the discussion and postpone it to tomorrow so don't take a final decision now. Let's discuss for at least a week and come to a proper, good stance. Removing competitiveness for every project is opening the door for robbery,” said Premadasa. Similarly, National People’s Power (NPP) MP Vijitha Herath said that the said Bill would pave the path for robbery. “This Amendment will not give space to small or medium scale developers, only large scale ones. The Adani Group has sent a letter to the Government of Sri Lanka, requesting to develop 6,000 MW of electricity generation projects. Thus, giving such a huge project solely to international development should not take place. If this Amendment is brought in for this reason, then that is a serious problem for our energy sector,” said SJB “independent” MP Patali Champika Ranawaka.  Tweeting after the Bill was passed, Prime Minister Ranil Wickremesinghe welcomed it, adding that it would allow for the rapid deployment of cost effective renewable energy to the grid. The CEBEU had earlier declared that the strike action involved the shutdown of the national electricity grid which would lead to an island-wide power failure by yesterday morning. Several areas around the country experienced power failures from about 4 a.m. to 8 a.m. yesterday. At 6 a.m. yesterday, the CEBEU declared that the strike would continue while preventing a total power failure in the system, as President Gotabaya Rajapaksa had assured them that the CEBEU’s proposals to the Amendment would be considered during the committee stage of the Bill’s reading in Parliament.  


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