• Renewable energy generation projects hit by fund suspensions
• CEB plans to exploit existing transmission capacity to 1,000 MW renewables
• CEB needs to amend transmission plan: SLSEA
• 100 MW Siyambalanduwa renewable energy project nears approval
• SIA seeks revisable tariff for solar power

By Maheesha Mudugamuwa Sri Lanka is at risk of not reaching the 2030 Renewable Energy (RE) target of 70% set by President Gotabaya Rajapaksa, as several financing agencies have temporarily suspended their funds for ongoing projects amidst the declaration of bankruptcy and the impact of the ongoing economic crisis, The Sunday Morning learns. It is reliably learnt that the funds committed by the Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) for developing the country’s transmission network have been temporarily suspended as the Government is not in a position to repay those loans. The decision has been taken following the Government defaulting on its loan repayments recently. This, as the country struggles with persistent energy security issues that have impacted industry, services, and the day-to-day life of almost every citizen. The Sunday Morning also learnt that in order to achieve the 70% target, the country’s RE sector will need a multibillion-dollar investment, and in a backdrop where financing agencies such as the ADB and JICA are holding back their funds for ongoing projects, it is highly unlikely that they will invest in the sector in the future. In order to achieve the President’s 70% RE target, the existing transmission line should be upgraded and for that an investment of a minimum of $ 4 billion is a must. At a time when import costs of products are increasing dramatically with highly unpredictable exchange rates, the actual cost of the transmission line upgrading is likely to go even higher. It was in President Rajapaksa’s election manifesto – the 78-page document named ‘Vistas of Prosperity and Splendour’ – that he had first highlighted the importance of the country’s RE sector, stating that by 2030, the country’s renewable energy mix should be 40% of the total portfolio and anticipating that hydro and RE together would account for 80% of the overall energy mix by 2030. The Sunday Morning reported last week that according to Ceylon Electricity Board (CEB) Chairman M.M.C. Ferdinando Cabinet approval had been received to enhance the existing transmission network to enable the addition of more RE to meet the 2030 target at a cost of around $ 4 billion. This was also confirmed by Energy Ministry Secretary K.D.S. Ruwanchandra. Meanwhile, raising concerns over the Cabinet approved transmission network upgrading project, Sustainability Specialist Dr. Vidura Ralapanawe said there was no feasibility or assessment of the CEB that came up to $ 4 billion.  “The infamous memo of the CEB GM around August-September alluded to 1.7 for transmission which many said was absurdly high. Even adding the overpriced storage costs estimated by the CEB of $ 1.5 billion (which is not part of the transmission), it would only come up to $ 3.2 million and not 4,” he said in his reply to The Sunday Morning last week.  Dr. Ralapanawe further said: “Well, anyone who understands the current situation would know that chances of JICA/ADB funding for anything to do with the CEB will be zero for a long time, especially with CEB’s balance sheet. How can CEB develop the network without funds just because there is a Cabinet paper? As per CEB procedures, all transmission upgrades are part of the transmission development plan, which does not have a $ 4 billion upgrade.” Analysts have suggested that up to 2 GW can be added to the current grid without augmentation, he added. A new roadmap? Yet, with obtaining of the expected financial facilities now seemingly near impossible, The Sunday Morning learns that the CEB is drawing yet another roadmap to utilise the existing space in the transmission network to add at least another 1,000 MW of RE by 2025. As highlighted in the CEB Long-Term Generation Expansion Plan (LTGEP) (2022-2041) – the latest plan submitted by the Board which was to be revised in conjunction with revised Government policy in the next LTGEP to be submitted for the period 2023-2042 – the total renewable energy capacity was planned to be increased from 2,427 MW as at end 2020 to 6,240 MW by end of 2030 and to 9,600 MW by end of 2040. “The year-by-year renewable energy capacities in the plan are based on the study titled, ‘Integration of Renewable Based Generation into Sri Lankan Grid 2021-2030’ conducted by the CEB to investigate the technical and economic implications of renewable energy development dictated by the policy and to study the necessary enabling measures required for the successful renewable energy development programme,” it stated. Meanwhile, Sri Lanka Sustainable Energy Authority (SLSEA) Director General (DG) Sulakshana Jayawardena said the authority previously had a target to achieve 50%, but later it had been changed to meet the RE demand by 70% of demand by 2030. “The CEB has to amend its long-term generation plan. Based on that plan it has to prepare a transmission plan. We can comment only after that is submitted,” he said.   Commenting on transmission line enhancement plans, the DG stressed that the Cabinet memo had been submitted by the Energy Ministry to get Cabinet approval for this investment based on figures submitted by the CEB. “They have submitted the request given by the CEB. The transmission cost is calculated by CEB because it has the knowledge about the requirement. We share whatever the potential we have identified, then based on the information it makes transmission plans. The line-up of renewable energy projects is done by the CEB although we do a shortlist. Renewable energy projects cannot be developed wherever we want; the CEB calculates the costs; it has the knowledge about the transmission network. It knows the areas of congestion and how to enhance accordingly,” he explained. Ongoing projects Commenting on ongoing projects, Jayawardena said: “We have completed the prerequisites needed to develop the 100 MW Siyambalanduwa project including all environmental clearance. Once CEB selects the developer, we can transfer the approvals for it to develop. Land is available, the development area has been declared, and the environment permit is there. The project can be easily developed.” Commenting on Mannar, he said they were in the process of doing environment clearance. “We were asked to do a one-year bird study for Mannar because migrant birds come there from all over the world via demarcated routes. We have to compromise technical capacities to minimise the impact on the birds,” he stressed, adding that the one-year bird study would be completed by September. “Most of the lands in Mannar belong to private parties. We are in the process of doing valuations; next week we will receive the valuation and begin the acquisition process. Environment studies are being conducted,” Jayawardena said. Speaking on the Pooneryn project, he said: “We are now conducting an environment and social impact assessment; the technical study has been done. Land acquisition is being done.” He added that the first phase of the project could be conducted on Government land: “We have requested the Land Commission to give the lands. We have planned 100 MW of wind, another 133 MW of wind, and 150 MW of solar in Pooneryn,” he said. Meanwhile, a senior engineer attached to the CEB told The Sunday Morning that another 1,000 MW of RE could be accommodated in the existing grid and they were now preparing a plan to add the quantities accordingly till 2025. The engineer predicted that the existing power shortages would be eased with the increase of hydropower generation but unless a proper solution was given, the crisis would return next year. “Several projects had already been suspended due to the lack of finances as several institutions such as ADB and JICA have stopped funding for transmission line upgrading projects recently,” the engineer stressed. Solar needs tariff hike Meanwhile, solar power developers have requested a tariff hike for rooftop solar, considering the present exchange rates. Accordingly, the SLSEA had forwarded its request to the Ministry three weeks ago to appoint a committee to consider the tariff hike.  “The Ministry has to appoint a committee comprising all the relevant stakeholders such as the SLSEA, the Ministry, the CEB, and the Treasury. We made a request from the SLSEA to the Ministry to review the tariffs. We know that the cost has been increased,” the SLSEA DG said.   “Exchange rate fluctuations affect the prices of solar units and interest rates of loans. Considering all factors we made a request to review the tariffs, because we know that with a change in any of these factors, the project cost will change. We have to recalculate the tariffs. Otherwise any project won’t be feasible or viable. The committee is supposed to make recommendations. Three weeks ago we made a request, but the CEB has not appointed the committee yet,” he added. Speaking to The Sunday Morning, Solar Industries Association (SIA) General Secretary Lakmal Fernando stressed on the need for a tariff hike that can be revised periodically based on exchange rates. “The tariffs were given in 2016 at the time the dollar rate was around Rs. 140. Our projects have become financially non-viable and therefore are not moving forward. Solar production this year will be very marginal. Those who have brought down materials will install solar units,” he said, adding that without having a proper tariff rate the sector would not survive this crisis. Meanwhile, when contacted by The Sunday Morning, Power Ministry Secretary K.D.S Ruwanchandra said he was not officially informed about the suspension of loans by ADB, JICA, or any other institution as yet.  “We will discuss it with the agencies through the Finance Ministry to re-activate those loans,” he added.  Commenting on solar tariffs, the Secretary stressed that his Ministry had not received any formal communication with regard to any tariff requests as yet.