ECONOMYNEXT – Sri Lanka’s power ministry is planning to bring generation costs to 25 rupees, down from 37 rupees in mid 2025 using competitive bidding, Energy Minister Kumara Jayakoday said.
In July 2024, an electricity unit averaged 37 rupees and it had now come down to 29 rupees, he said.
The policy of the National People’s Power administration was to reduce electricity bills by 30 percent, over three years as articulated in their election platform he said.
“We are planning to bring generation costs down to 25 rupees,” Minister Jayakody said. “If we bring it down to 25 rupees a unit there will be a 32 percent reduction in costs.
“To reduce a unit to 25 rupees the purchase price must be below 25 rupees.
“As a general policy we want to buy all electricity units on a competitive basis and bring down costs.
“We have introduced competitive bidding instead of feed in tariffs.”
Under competitive tender, crony businesses will not be able to overcharge the Ceylon Electricity Board, he said.
“Under competitive bidding, we were able to bring down the purchase price of a wind power to 12 rupees a unit,” Minister Jayakody said.
“Battery storage came below 20 rupees. In the future, costs will come down further.”
However due to severe currency depreciation by the central bank renewable power investors are also now demanding a US dollar tariff.
When the central bank depreciates the rupee, costs of all power, other than CEB’s renewable plants on which loans have been repaid, goes up, undermining the economic strategy of the government. (Colombo/Jan07/2025)