ECONOMYNEXT – Sri Lanka’s energy minister Kumara Jayakody said the country cannot have cheap energy if the Ceylon Electricity Board is pressured to buy power at high prices from private parties and households, amid calls to raise prices paid for solar power.
“On one side you are question us why we are not bringing down electricity bills,” Minister Jayakody told parliament.
“On the other side you are asking why renewable prices are being brought down. In no world can that type of business be operated. It is not possible to buy at high prices and sell at low prices.
“If there is a subsidy it has to be paid with taxes collected from the people.”
He was responding to criticism from opposition leader Sajith Premadasa that prices paid to new renewable power producers have been reduced.
“The price paid to solar power was reduced from 37 to 27 rupees,” he said. Then it was reduced from 27 to 24 rupees. Now it has been reduced from 24 to 18 rupees.
“So this damages (paludu kireemak) solar or renewable power. When the price paid to them is reduced, micro, small and mid-sized producers will be hurt and be completely discouraged.”
“I would like to suggest that the price paid to solar power be brought back to the previous level.”
Minister Jayakody said the old prices cannot be paid to new renewable power producers.
“The cost of solar panels have fallen by 30 percent,” he explained. “The rupee has strengthened to 300.”
“That benefit has to go to the people. Nobody has lost money.”
However investors who did not put some money of their own (high debt to equity ratio) may be having higher costs and cannot make big profits, Minister Jayakody said.
“They do not have one cent,” he said. “They take loans for everything. But there is no loss for genuine developers. We are getting enough applications.”
In a recent bid for 50×2 MW wind plants, Vidullanka with David Pieris bid around 3.77 US cents per kiloWatt hours (less that 11.50 rupees).
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The CEB also has to invest heavily on the grid to accommodate renewables and also prevent blackouts from intermittent energy without energy and also without reactive power in some cases.
“We also have to develop a lot of infrastructure for that (to accommodate renewable power),” he said.
“No party or old administrations have left any money for us.”
The CEB has just closed tenders for Battery Energy Storage System (BESS) which may cost around 17 rupees a unit. Several transmission lines in remote areas to take solar and wind power has been also tendered financed by AIIB.
In addition, existing renewable energy developers have been offered 45.80 rupees for battery stored energy delivered in the night.
There was a lot of interest and competition for tenders, Minister Jayakody said.
“We welcome that,” he said.
It was the 2015-2019 administration under then Deputy Minister Ajith Perera brought competitive tendering, even to small plants, ending the controversial feed in tariff which critics say were manipulated upwards by lobbying.
The feed-in-tariffs manipulation went so far as to have protectionist rent-seeking with higher tariffs for local inputs, at one time, like in the building materials and maize trade.
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However, the the controversial feed-in-tariffs without competitive bidding was later brought back by the next administration. The current administration is being criticized for lowering the feed-in tariffs.
Minister Jayakody tabling data on another question said the cost of the CEB owned coal plant were 20.82 rupees a unit, large hydro 2.30 rupees, furnace oil 46.94 and naptha 20.82 rupees. CEB’s wind plant 12.12 rupees.
Coal is subject to taxes, and there is a capital cost.
Private diesel combined cycle firm energy that can be dispatched was 80.20 in December 2024 and furnace oil 50.37 rupees.
Renewable, intermittent energy (no capacity charge) was 14.13 rupees on average for small hydro, wind 15.73 on average, Ground mounted solar was 19.49 rupees.
Rooftop solar was 27.06 rupees up to 500kW, 23.18 rupees above 500 kW.
Urban waste energy was 36.20 rupees (also available in the night).
(Colombo/Nov02/2025)
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