Energy

Sri Lanka renewables, power lines without tender to be legalized in new law: IESL

Friday May 31, 2024 6:09 pm

ECONOMYNEXT – Procurement of renewable energy as well as transmission lines without competitive tenders will be legalized in a planned electricity reform law, the Institution of Engineers of Sri Lanka has warned.

“Despite declaring the objects of the proposed Act to be “allowing open competitive procurement of new generation capacity including renewable energy”, the body of this Act states the complete opposite,” the IESL said.

“The present practice of procuring renewable energy projects at higher prices through negotiated deals and at feed-in-tariffs that never decrease, has been further strengthened by incorporating it into the main electricity legislation in the country, when most countries have given up such practices long ago to make way for competition.

“The proposed Act does not have clauses that bring any relief to Sri Lanka’s electricity customer, burdened with prices almost double that of competitor countries in the region.

“Similarly, procurement of transmission capacity can be non-competitive…”

Privately owned transmission can also be procured without competition, the IESL said.

India’s Adani is expected to build a transmission line apparently without competitive tender.

It is also building the largest renewable plant in the island so far without competitive tender.

Related India’s Adani to build Sri Lanka transmission line with wind plants

The IESL said the powers of the Public Utilities Commission would also be watered down through the new law.

“This Council and the Minister have been bestowed with powers to decide on electricity tariff policy and approval of the long-term power generation and transmission plans, too, making a mockery of these highly technical functions so far handled by the PUCSL,” the IESL said.

“Instead of strengthening the existing regulatory functions and capacity of PUCSL, this Act makes PUCSL an agency that merely implements what the Minister and his Council decides.

“The worldwide best practice is otherwise: a stronger, highly professional and fiercely independent regulator implements the law and the policy, through licensing.”

The full statement is reproduced below:

The Proposed Sri Lanka Electricity Act 2024

The Institution of Engineers Sri Lanka (IESL) is the apex body representing over 25,000 professional engineers. IESL has closely followed the developments in the electricity supply industry, making constructive recommendations to ensure customers receive a reliable electricity supply at a regionally competitive price. Sadly, both the above conditions have not been fulfilled owing to actions or inaction of governments and sector institutions. The electricity sector has been moving from one crisis to another. In the ongoing efforts to reform the sector, IESL made several representations to the government since 2022. Sadly, the proposed Act tabled in Parliament in April 2024 does not reflect most necessary recommendations of IESL and other stakeholders who value meaningful reforms, thus failing to bring solutions to several serious shortcomings in the sector.

Instead of making the sector governance simpler and the government intervention smaller, the proposed Act creates a new institution called an Advisory Council. It duplicates some functions or transfers some functions of the Public Utilities Commission of Sri Lanka (PUCSL) – the regulator, to the Council.

The proposed Act hands over the role of the government as the policy maker to the Advisory Council appointed solely by the Minister of Power and Energy. This Council and the Minister have been bestowed with powers to decide on electricity tariff policy and approval of the long-term power generation and transmission plans, too, making a mockery of these highly technical functions so far handled by the PUCSL. Instead of strengthening the existing regulatory functions and capacity of PUCSL, this Act makes PUCSL an agency that merely implements what the Minister and his Council decides. The worldwide best practice is otherwise: a stronger, highly professional and fiercely independent regulator implements the law and the policy, through licensing.

Despite declaring the objects of the proposed Act to be “allowing open competitive procurement of new generation capacity including renewable energy”, the body of this Act states the complete opposite. The present practice of procuring renewable energy projects at higher prices through negotiated deals and at feed-in-tariffs that never decrease, has been further strengthened by incorporating it into the main electricity legislation in the country, when most countries have given up such practices long ago to make way for competition. The proposed Act does not have clauses that bring any relief to Sri Lanka’s electricity customer, burdened with prices almost double that of competitor countries in the region. Similarly, procurement of transmission capacity can be non-competitive, and in addition this Act allows private transmission lines.

The proposed Act allows private investments in generation, transmission, and distribution. However, the authority to grant a license to conduct such a business, presently with PUCSL (which is the worldwide practice in power sector reforms), will now be transferred to the Minister by this Act. Such “political” approval of licenses for a commercial business, at a time when Sri Lanka embarks on the next phase of reforms by inviting private investments to transmission and distribution, will make the reforms meaningless.

With private ownership allowed into 100% of each generation and distribution entity, safeguards to prevent formation of monopolies are grossly inadequate.

Technical matters too, have not been addressed adequately. The grid and technical codes thereof have been defined to be “above 33 kV”, ignoring the need for a distribution code, in an era where distributed generation is growing and would eventually be the main supplier of generation. This not only brings an unregulated block of generation and power wheeling across distribution networks, without adequate technical safety and economic regulation. Serious control problems leading to brownouts or blackouts cannot be avoided.

IESL calls upon the government to seriously review these glaring shortcomings and amend the proposed Act to ensure the above and other serious deficiencies pointed out by our detailed report are rectified. Without revisions, this Act will further aggravate problems of governance, unreliability, and high costs, that have plagued the electricity sector for decades. The proposed Act, if implemented without these amendments, is designed to fail technically and economically, with excessive political interference at every turn.

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Politics

UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

Monday June 3, 2024 1:59 pm

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

Accidents

300 of 100,000 trees in Colombo considered high risk: state minister

Monday June 3, 2024 1:05 pm

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

Politics

Support for AKD drops to SP’s level while RW makes gains, Sri Lanka poll shows

Monday June 3, 2024 12:47 pm

ECONOMYNEXT — Support for leftist candidate Anura Kumara Dissanayake dropped six percentage points to 39 percent in April, levelling with opposition leader Sajith Premadasa, while support for President Ranil Wickremesinghe increased three points to 13 percent in a presidential election voting intent poll.

The Sri Lanka Opinion Tracker Survey (SLOTS) conducted by the Institute for Health Policy showed that, according to its Multilevel Regression and Poststratification (MRP) provisional estimates of presidential election voting intent, National People’s Power (NPP) leader Dissanayake and main opposition Samagi Jana Balawegaya (SJB) lader Premadasa were now neck and neck while United National Party (UNP) leader Wickremesinghe had made some gains. A generic candidate for the ruling Sri Lanka Podujana Peramuna (SLPP) had the support of 9 percent of the people surveyed, up 1 percentage point from March.

These estimates use the January 2024 revision of the IHP’s SLOTS MRP model. The latest update is for all adults and uses data from 17,134 interviews conducted from October 2021 to 19 May 2024, including 444 interviews during April 2024. According to the institute, 100 bootstraps were run to capture model uncertainty. Margins of error are assessed as 1–4% for April.

SLOTS polling director and IHP director Ravi Rannan-Eliya was quoted as saying: “The SLOTS polling in April suffered from a lower response rate owing to the New Year holidays, and we think this may have skewed the sample in favour of SJB supporters. The early May interviews partly compensated for this, and it’s possible that our June interviews may result in further revisions
to our model estimates.

Rannan-Eliya also noted that a number of other internet polls may be overestimating support for the NPP or its main constituent party the Janatha Vimukthi Peramuna (JVP) by about 10 percent.

“We’ve been asked about some other recent internet polls that showed much higher levels of support for the NPP/JVP. We think these over-estimate NPP/JVP support. SLOTS routinely collects data from all respondents on whether they have internet access, and whether they are willing to participate in an internet survey. These data show that NPP/JVP supporters are far more likely to have internet access and even more likely to be willing to respond to internet surveys, and this difference remains even after controlling for past voting behaviour. Our data indicates internet polls may overestimate NPP/JVP support by about 10 percent, and for this kind of reason we have previously decided that the time is not right to do internet polling,” he said.

According to the IHP, its SLOTS MRP methodology first estimates the relationship between a wide variety of characteristics about respondents and their opinions – in this case, ‘If there was a Presidential Election today, who would you vote for?’– in a multilevel statistical model that also smooths month to month changes. It then uses a large data file that is calibrated to the national population to predict voting intent in each month since October 2021, according to what the multilevel model says about their probability of voting for various parties (‘post-stratification’) at each point in time. The multilevel model was estimated 100 times to reflect underlying uncertainties in the model and to obtain margins of error, the institute said. (Colombo/Jun03/2024)