ECONOMYNEXT – Sri Lanka has published a draft electricity law which aims to break up the Ceylon Electricity Board into separate, generation, distribution companies and a systems operator.
New generation plants would continue to be procured by a single entity.
Distribution licensees would not be allowed to procure a portion of generation plants directly in the general course of business.
However open access will be allowed at a later date allowing large customers to buy power directly from generators.
“Such open access shall be made operational in a phased-out manner and the extent of open access in successive phases shall take place in such manner as shall be prescribed and be subject to such conditions including payment of cross subsidies and other operational limitations as may be prescribed,” the draft act says.
Open access would come into operation in five years but the Minister could delay it for another 5 years.
Captive generating plant would be allowed.
A wholesale market will be set up at a future date.
Download the Sri Lanka Electricity Bill from here.
Existing power purchase agreements would be valid for nine months from a specified date.
“Provided that, all power purchase agreements and Standardized Power purchase agreements which had been entered into by the Ceylon Electricity Board, and which are valid and are in operation on the day immediately preceding the appointed date shall, from and after such date continue to be valid and effective as if entered into in terms of this Act for a period only for nine months, from the appointed date,” according to the draft law.
A long-term generation plan will be valid for five years and it will require the approval of the minister. The minister can also alter the generation plan.
“The Regulator shall after consultations with the generation licensees, the National Transmission Network Service Provider and relevant stakeholders, finalize and submit the prepared plan to the Minister for his approval,” the draft law says.
“Such approval shall include any amendments as may be proposed by the Minister.”
It is not clear why such political approval is required and on what basis, technical or otherwise, changes would be made.
The Public Utilities Commission of Sri Lanka would continue to regulate the sector.
A National Electricity Advisory Council will be set up. (Colombo/Dec08/2023)