• Engineers warn of Rs. 20 b public loss from tender bypass
• CEB flags single-owner control of six projects
• Finance Ministry observations sent, Energy Ministry in dark
• Cabinet to take up RE tariff proposal tomorrow

While the long-delayed tariff revision for power purchases remains stuck awaiting Cabinet approval, a wind power project involving six 10 MW plants in Puttalam is allegedly being pushed ahead for approval – a move that could cost the public over Rs. 20 billion, as learnt by The Sunday Morning.

It is learnt that several private companies are reportedly planning to build six 10 MW wind farms in the Puttalam area, in a deal that could result in the public losing more than Rs. 20 billion due to what is alleged to be a scheme to overcharge for the electricity these plants would generate, with the additional costs eventually passed on to consumers through their electricity bills.

A senior engineer attached to the Ceylon Electricity Board (CEB) told The Sunday Morning that under the provisions of the Electricity Act, renewable energy projects below 10 MW were exempt from the requirement to call for tenders. 

Instead, the price paid per unit of electricity was determined by a committee appointed by the Ministry of Energy, taking into account factors such as investment costs, the prevailing dollar exchange rate, and bank loan interest rates, the engineer alleged.

The engineer also alleged that currently, wind power producers were paid Rs. 29.80 per unit – a rate set by the previous Government, reflecting the elevated exchange rates and interest rates in 2024.

However, this rate is reviewed annually. For 2025, the Ministry of Energy’s committee has recommended a revised price of Rs. 23 per unit. Although a Cabinet paper to formalise this new rate had been submitted in March, its approval had been repeatedly delayed, the engineer alleged.

According to ministry sources, the delay is due to the Ministry of Finance’s failure to submit its recommendations on the proposed amendment.

Moreover, the engineer further alleged that since all six planned wind farms were located in the same area, if a single 60 MW tender had been called, the price per unit could have fallen to around Rs. 16-18 through competitive bidding.

While the projects are being officially developed by six different companies, it is claimed that all six are owned by the same group of individuals. This would result in the bypassing of the tender requirement by keeping each project under the 10 MW threshold.

Therefore, the senior engineer went on to allege that if the current high price of Rs. 29.80 per unit were to be maintained instead of implementing the committee’s recommended Rs. 23 per unit for sub-10 MW projects, the CEB could incur an additional loss of Rs. 20 billion over 20 years.

If the projects were to be consolidated into a single 60 MW tender, it could potentially save an estimated Rs. 40-50 billion compared to the current arrangement.

In 2024, under the previous Government, then Minister Kanchana Wijesekera had submitted a Cabinet paper proposing a reduction in the Feed-in Tariff (FIT) for renewable energy. 

However, the Finance Ministry, under then President Ranil Wickremesinghe, had opposed the move. The official reason cited was that lowering the tariff could jeopardise the country’s target of achieving 70% renewable energy in the electricity mix by 2030.

Furthermore, the matter was discussed during a recent Board meeting, based on Board Paper Ref. TRD/DGM(RED&PM)/04 dated 8 May 2025, as seen by The Sunday Morning. 

However, during the meeting, the CEB’s Board of Directors had raised concerns over a proposed power purchase arrangement involving six wind power projects in Kalpitiya.

According to the proposal, Standardised Power Purchase Agreements (SPPAs) and a Transmission Facility Agreement were to be signed for six wind plants, each with a capacity of 10 MW, all situated in Norochcholai. 

Although registered under six different company names, it had been observed that the projects were effectively controlled by a single ownership entity. The Board had expressed concern that this setup exploited the SPPA framework, which was typically reserved for small-scale, independent power producers to secure contracts for what was essentially a single 60 MW project.

The Board had further noted that the CEB currently procured wind power through competitive bidding processes at far lower rates, averaging $ 4.88 cents per kilowatt-hour (approximately Rs. 14.65/kWh). In contrast, the proposed SPPA rate for these projects stands at a significantly higher Rs. 29.86/kWh. Even after factoring in substation augmentation costs, the Board had questioned the justification for using the SPPA process in this instance.

In response, the Board had directed the General Manager and Chief Legal Officer to seek a legal opinion to confirm the actual ownership structure of the six companies and to assess the legal soundness of the proposed arrangement. 

It was noted that this appeared to be an attempt by a single entity to bypass the competitive bidding process by fragmenting a larger project into multiple smaller ventures. The Board had called for immediate appropriate action based on the findings.

When The Sunday Morning inquired about the project and the losses alleged by the engineers, Energy Ministry Secretary Prof. Udayanga Hemapala said that the Cabinet was scheduled to reconsider the Energy Ministry’s proposal to reduce tariffs for all renewable energy-based electricity supplied to the national grid tomorrow (2).

As reliably learnt, the proposal has been pending Cabinet approval due to a delay in receiving observations from the Ministry of Finance.

Prof. Hemapala also noted that the Finance Ministry had submitted its observations to a committee appointed by the Cabinet to review the matter.

When asked whether the Energy Ministry had seen the Finance Ministry’s observations, Prof. Hemapala responded: “No, we haven’t received a copy of the observations, but we were informed that the Finance Ministry has submitted them to the committee. We are not part of the committee and are not aware of its exact members, but it comprises some ministers and deputy ministers.”

“However, we were notified that the Cabinet will take up the matter at this forthcoming meeting,” he added.  

As learnt by The Sunday Morning, the Energy Ministry has proposed a new tariff structure that, if approved, will allow the CEB to significantly reduce the prices paid for electricity generated through all new private sector contracts for rooftop solar, mini-hydro, wind, ground-mounted solar, biomass, and municipal solid waste projects. 

For the first time, the proposal also introduces a specific tariff for rooftop solar and solar photovoltaic (PV) systems integrated with Battery Energy Storage Systems (BESS).

Reliable sources revealed that under the new scheme, rates for rooftop solar generation would be revised as follows: up to 20 kW will be paid Rs. 19.61 per unit; above 20 kW and up to 100 kW will be paid Rs. 17.46 per unit; above 100 kW and up to 500 kW will be paid Rs. 15.49 per unit; above 500 kW and less than 1 MW will earn Rs. 15.07 per unit; and systems of 1 MW and above will be paid Rs. 14.46 per unit.

These revised tariffs were determined by a 12-member committee comprising officials from the Ministry of Energy and the Ministry of Finance, Planning, and Economic Development, along with representatives from the CEB, Lanka Electricity Company Ltd., the Sustainable Energy Authority, and the Central Bank of Sri Lanka.