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Tuesday December 5th, 2023

Sri Lanka power regulator fires salvo against fossil plants by adding up eco-costs

ECONOMYNEXT – Sri Lanka’s power regulator has released a study of ‘externalities’, where an attempt has been made to give a cash value to the pollution caused by thermal power plants such as coal, which will tend to push up costs.

Sri Lanka plans new power plants based on ‘least costs’ which tends to give a higher weighting to coal and now liquefied natural gas plants, and mature technologies such as large hydros where available.

Wind power prices have also fallen since competitive bidding was brought in and the technology also matured elsewhere. By adding externalities, higher cost renewable energy plants look better.

The Public Utilities Commission of Sri Lanka said the study was done by Sri Lanka Energy Managers Association.

The externalities study added 10.23 rupees to the cost of unit generated by a coal plant in Sri Lanka (Lakdanavi), 4.53 rupees to a heavy fuel oil combined cycle run LTL Holdings, 7.55 rupees to a diesel plant in CEB’s Kelanitissa complex, and a 4.55 rupees to a heavy fuel plant in Sapugaskanda.

“Power generation gives rise to a range of environmental issues including air pollution, water pollution, releasing toxic materials and GHG emissions during their operational life,” the PUCSL said.

“These environmental issues lead to adverse community, social and ecological related costs referred to as externalities.

“The right costs will help Sri Lanka to discover the real economic impact from power generation and also will help in preparing power generation plans for the country in the future.”

The ‘internalizing’ of ‘externalities’ however has also drawn controversy as a tactic used by the green lobby to tilt the playing field in their favour.

In Sri Lanka heavy fuels (furnace oil) are artificially priced up by the Ceylon Electricity Board which distorts the ‘merit order’ on which plants are operated (dispatched).

Related Ceylon Electricity Board forced to idle cheaper plants as financial crisis worsens

The government also charges taxes from coal and diesel from time to time, while renewable energy is given tax free status, which tends to further cloud the issue.

Many high costs plants including liquid fuel plans are also not in original generation plans of the Ceylon Electricity Board but are pushed in at the last minute after coal plants are scuttled by various interest groups.

Sri Lanka built a Chinese designed coal plant amid a crisis after a Japanese plant which was specified in a CEB plan was scuttled.

Renewable plants also have their costs. Some small hydro plants are located in montane forests. Some of Sri Lanka’s wet zone forests have point endemism.

Wind farms can disrupt bird flight paths, floating solar can cut off light and destroy under water plants which in turn hurts fish, while land solar farms spread over large distances can destroy the country’s remaining forests and brush land.

Many large hydro projects proposed by the CEB which are cheap, in the past have been opposed by environmental grousp. CEB also had trouble building a wind farm, after costs fell.

“PUCSL plans to extend the study to discover the external costs of power generation from other sources like hydro, wind, solar and natural gas as the second phase,” the regulator said.

The PUCSL is calling for public consultations on externalities.

PUCSL Public Notice


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Sri Lanka rupee closes stronger at 327.40/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 327.40/90 to the US dollar on Tuesday, from 328.10/30 the previous day, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.60/70 percent from 13.70/14.00 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.00 percent from 13.90/14.10 percent.

A bond maturing on 15.01.2027 closed at 14.00/15 percent from 14.00/14.10 percent.

A bond maturing on 01.07.2028 closed at 14.10/20 percent from 14.20/35 percent.

A bond maturing on 15.05.2030 closed at 14.20/35 percent, from 14.25/45 percent.

A bond maturing on 01.07.2032 closed at 14.10/35 percent, from 14.05/40 percent. (Colombo/Dec5/2023)

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Sri Lanka stocks close down as investor sentiment dips

ECONOMYNEXT – The Colombo Stock Exchange closed down on Tuesday, CSE data showed.

The All Share Price Index was down 0.40 percent, or 43.50 points, at 10,700.09.

The S&P SL20 index was up 0.43 percent, or 13.32 points, at 3,054.41.

Turnover was at 711 million. The capital goods sector contributed 172 million, the food, beverage and tobacco sector contributed 140 million, and banks 113 million of this.

Top positive contributors to the ASPI in the day were John Keells Holdings Plc (up at 193.00), Richard Pieris And Company Plc (up at 19.80), and Nation Lanka Finance Plc, (up at 0.40).

Negative contributors were Commercial Bank of Ceylon Plc (down at 89.70), Sampath Bank Plc (down at 71.00), and Central Finance Company Plc, (down at 106.00). (Colombo/Dec5/2023).

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Sri Lanka plans to reduce number of school grades from 13 to 12

ECONOMYNEXT – The Ministry of Education proposes to reduce the number of school grades from 13 to 12, according to a government information department statement.

“Every child will be given the opportunity to finish school in 17 years through the proposed new education reforms,” education officials were quoted as saying after a discussion on budget allocations.

Under the proposed system, pre-school education will be at the age of 4 years, the primary section between grades 1-5, junior section between grades 6-8, and senior section between grades 9-12.

The General Certificate of Education Ordinary Level Exam (GCE O/L) is proposed to be conducted in grade 10, and the Advanced Level Examination in grade 12.

It has also been decided to reduce the number of mandatory subjects at the GCE O/L Exam from 9 to 7.

Three new subjects, information and communication technology (ICT), technical and professional skills, and religion and values will be made mandatory and included in those 7 subjects. (Colombo/Dec5/2023)

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