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Monday June 3rd, 2024

Sri Lanka’s Adani wind power price lowered to 8.85 cents: Minister

ECONOMYNEXT – The purchase price of a wind power plant in Mannar, Sri Lanka built by India’s Adani has now been lowered to 8.85 US cents in the latest negotiations, Energy Minister Kanchana Wijesekera said.

“They are now proposing 8.85 US cents or about 26.90 rupees,” Minister Wijesekera told parliament.

The private plant has drawn controversy because it was not coming through competitive bidding and the initial price demanded was said to have been as high at 15.20 US cents a unit.

Power purchase agreements (PPA) which run up to 20 years are among the largest government procurement in the island and dwarfs some capital projects.

Minister Wijesekera said the plant came as a government-to-government deal.  A cabinet appointed negotiation committee was appointed to sort out the price.

Some political analysts refer to such power plants as a ‘geopolitical’ cost.

There are now several plants for which prices are being negotiated without competitive tender.

Minister Wijesekera was responding to a question from opposition leader Sajith Premadasa whether the proper environmental cost has been assessed, given that the plant is in the middle of a migratory bird flyway and what was the price.

A bird corridor was expected to be set aside according to an Environmental Impact Assessment, he said.

However concerns have been raise about high tension wires. It is not clear whether buried cables would be used as called for by some activists.

Minister Wijesekera said the price now compared favourably with other renewable plants.

Sri Lanka was a risky country after a sovereign default, he said.

Due to the regulator earlier not increasing tariffs after the central bank depreciated the currency from time to time in the past after inflationary rate cuts, the CEB also runs losses and is unable to pay IPPs, adding another risk to private developers.

Mannar was one of the areas with the highest wind power potential, Minister Wijesekera said and there were already several other plants in the area.

Hiru Ras Power, which had a 15MW plant in the mainland, after a procurement process had asked for 20.54 rupees a unit. The price was set before macro-economists depreciated the currency.

Ceylex (Pvt) Ltd had sought 33.35 rupees for a 20MW plant. These were for 20 – year contracts.

A 50MW wind plant near the existing CEB plant has now been opened for competitive bidding to close in May 2024.

The Adani plant discussions are still underway, he said.

A solar plant in Siyambalanduwa (tendered in crisis period) was as high as 12 cents on tendering.

But after negotiations it was brought down to 8 US cents after negotiations, he said.

Solar panel prices have also plunged after the global commodity bubble ended and the US started to tighten policy, analysts say.

Minister Wijesekera said compared to wind, solar costs were lower.

The Siyambalanduwa plant comes with ramping, which reduces renewable energy stress on the grid.

Related Windforce to build Sri Lanka’s first ramp-rate controlled solar power plant

It is not clear whether Adani is now offering ramping at 8.85 cents or not.

Adani has meanwhile said it has been unfairly targeted.

Related Indian Adani Group says “vicious campaign” against its Sri Lanka wind project

Investors demanded a price based on the cost, location, plant factor, return on equity and the interest rate, Minister Wijesekera said.

According to data in an Environmental Impact Assessment the Adani 250MW plant would cost 420 million US dollars with 147 million dollars of equity (35 percent) and 273 million (65 percent) in debt

Under so-called ‘feed-in-tariffs’ which are also non-competitive, developers are paid 33.70 rupees per unit for the first 8 years, from 9-15 years 18.90 rupees and from 16 to 20 years 13.80 rupees, he explained.

Energy costs of coal plants are now around 25 rupees.

(Colombo/Mar21/2024)

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  1. Kush Maddumarachchi says:

    Is a unit reffered to in this article a MWh? Sri Lanka should transition to a open market where generators bid for pricing every half hour and work in a more dynamic model. That way cheapest available generation is used first.

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  1. Kush Maddumarachchi says:

    Is a unit reffered to in this article a MWh? Sri Lanka should transition to a open market where generators bid for pricing every half hour and work in a more dynamic model. That way cheapest available generation is used first.

Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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

The UNP party headquarters in Pitakotte/EconomyNext

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)

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

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)

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