News
Biomass power producers shut down during power crisis
by Ifham Nizam
Renewable energy producers who generate electricity using biomass (wood chips) capable of supplying 20 MW (140 million kWhs) per year to the CEB grid, have shut down because what they are paid for such power is not sufficient to even cover their variable costs for biomass and other day to day operating costs such as salaries, chemicals, etc.
These producers, who have entered into Power Purchase Agreements (PPAs) with the CEB, have jointly written to the CEB requesting an increase in their tariff if they are to restart operations.
They have pointed out that the costs used in the formula used to calculate their annual tariff rate is far below actuals. The calculation uses Rs 14 per kWh as the cost of fuel wood, whereas the actual cost today is Rs 21 per kWh. Overheads and maintenance (O&M) and other related costs are assumed to be Rs 2 per kWh, whereas the actual cost is around Rs 6 per kWh, developers claim.
In their letter to the CEB, they point out that if the “correct” costs are used in the tariff formula, their tariff should be Rs 36.67 per kWh. With such a tariff they would be able to operate their plants and also service their bank loans.
They say that the CEB’s cost for generating power from its own plants, including coal, is substantially higher than the Rs 36.67 per kWh they have requested.
They have calculated that if the CEB pays them the requested tariff, instead of using their own plants to generate this power, it would save Rs 3,220 million per year. Also, since they use a local biomass and not imported coal and oil required by the CEB’s plants, the country would save USD 20 million per year foreign exchange.
Unlike in the case of other renewable energy technologies such as hydro, wind, and solar, biomass plants can operate reliably round the clock and, in CEB terminology, are ‘base load’ plants similar to the coal plants. The energy supplied by such plants is therefore more valuable to the CEB than power from other types of renewable energy.
The problem has been made worse by the fact that the CEB has not paid biomass developers (as well as other renewable power suppliers) for the power they have supplied to the CEB from December 2021 to date.
In their letter, developers have pointed out that they, unlike other renewable energy technologies (hydro, wind and solar) whose “fuel” cost is zero, have large recurring costs on fuel.
They have requested the CEB to expedite the payment of their past invoices and give them priority over other renewable energy developers as, without such payments, they cannot operate due to severe cash flow shortages.
One of the larger developers, Mirigama Dendro Power (MDP) located near Giriulla, has already informed its bankers that it is unable to service its loans and has asked the banks to take over its plant which was pledged as collateral.
The banks don’t want to foreclose because with the present tariffs no one would want to take over the plant even if all debts were settled and the plant was sold for a token one rupee.
This plant originally cost Rs 1.2 billion to build and it would cost Rs 3 billion to replicate today. Without an increase in the tariff as requested, MDP says they can’t remain in business and their plant will be only good for scrap. Other biomass developers whose plants are all currently stopped will soon be following MDP and closing down permanently, they say.
Biomass developers wrote to the CEB Chairman M M C Ferdinando two weeks ago and he recently met with a group of them. While the Chairman appeared to understand the situation, all he could say was that he would forward the request to the CEB’s tariff committee.
From past experience, developers claim that it will take months, if not years, for anything to come of this. By this time all biomass plants would have laid off their staff and most likely, been dismantled.
It is ironic that at a time when the country is suffering from power and foreign exchange shortages, an option to provide a substantial quantum of high-quality power to the grid at a price lower than any other alternative available today and to save foreign exchange, is not being prioritized, the developers urge.
Power and Energy Kanchana Wijesekera said that he will make the maximum effort to feed renewable energy-based power into the CEB grid as soon as possible. In the case of biomass developers, there is approximately 20 MW of such power capable of generating 140 million kWh annually already connected to the grid. But this has become unavailable because of the inadequate tariff.
As detailed above, the requested tariff is financially beneficial to the CEB and the country. Here is a clear opportunity for the minister to intervene to “walk the talk” and bring this 20 MW back into the grid, biomass developers say.
The U.S. Embassy in Colombo welcomed the U.S. Sports Envoys to Sri Lanka, former National Basketball Association (NBA) and Women’s National Basketball Association (WNBA) players Stephen Howard and Astou Ndiaye, from June 8 through 14.
The Public Diplomacy section of the U.S. Embassy said that it would launch a weeklong basketball program intended to harness the unifying power of sports, made possible through collaboration with Foundation of Goodness and IImpact Hoop Lab.
While in Sri Lanka, Howard and Ndiaye, both retired professional basketball players, will conduct a weeklong program, Hoops for Hope: Bridging Borders through Basketball. The Sports Envoys will lead basketball clinics and exhibition matches and engage in leadership sessions in Colombo and Southern Province for youth aged 14-18 from Northern, Uva, Eastern and Western Provinces, offering skills and leadership training both on and off the court. The U.S. Envoys will also share their expertise with the Sri Lanka Basketball Federation, national coaches, and players, furthering the development of basketball in the country. Beyond the clinics, they will collaborate with Sri Lankan schoolchildren to take part in a community service project in the Colombo area.
“We are so proud to welcome Stephen and Astou as our Sports Envoys to Sri Lanka, to build on the strong people-to-people connections between the United States and Sri Lanka,” said U.S. Ambassador Julie Chung. “The lessons that will be shared by our Sports Envoys – communication, teamwork, resilience, inclusion, and conflict resolution – are essential for leadership development, community building, equality, and peace. The U.S. Sports Envoy program is a testament to our belief that sports can be a powerful tool in promoting peace and unity.”
SJB Colombo District MP Mujibur Rahuman in parliament demanded to know from the government the reasons for CEB suspending the leave of all its employees until further notice from Thursday.
MP Rahuman said that the CEB has got an acting General Manager anew and the latter yesterday morning issued a circular suspending leave of all CEB employees with immediate effect until further notice.
“We demand that Minister Kanchana Wijesekera should explain this to the House. This circular was issued while this debate on the new Electricity Amendment Bill was pending. There are many who oppose this Bill. The Minister must tell parliament the reason for the urge to cancel the leave of CEB employees,” the MP said.However, Speaker Mahinda Yapa Abeywardena prevented Minister Wijesekera responding to the query and said that the matter raised by MP Rahuman was not relevant.
The Chartered Institute of Personnel Management (CIPM) successfully concluded the 8th Annual CIPM Symposium, which took place on 31st May 2024. Themed “Nurturing the Human Element—Redefining HRM in a Rapidly Changing World,” the symposium underscored the pivotal role of human resource management (HRM) in today’s dynamic global landscape. Since its inception in 1959, CIPM has been dedicated to advancing the HR profession through education, professional development, and advocacy, solidifying its position as Sri Lanka’s leading professional body for HRM.
Ken Vijayakumar, the President of the CIPM, graced the occasion as the chief guest. The symposium commenced with the welcome address by the Chairperson, Prof. Arosha Adikaram, followed by the Web Launch of the Symposium Proceedings and Abstract Book by the CIPM President. The event featured distinguished addresses, including a speech by Chief Guest Ken Vijayakumar, President of CIPM, and an address by Guest of Honor Shakthi Ranatunga, Chief Operating Officer of MAS Holdings Pvt. Ltd., Sri Lanka.
The symposium also featured an inspiring keynote address by Prof. Mario Fernando, Professor of Management and Director of the Centre for Cross Cultural Management (CCCM) at the University of Wollongong, Australia.
Vote of Thanks of the inauguration session was delivered by Dr. Dillanjani Weeratunga, Symposium Co-chair.
The symposium served as a comprehensive platform for researchers to present their findings across a wide range of critical topics in HRM. These included Cultural Diversity and Inclusion, Talent Development and Retention, Ethical Leadership and Corporate Social Responsibility, Adapting to Technological Advancements, Mental Health and Well-being at Work, Global Workforce Challenges, Employee Empowerment, and Reskilling and Upskilling.
The plenary session was led by Prof. Wasantha Rajapakse. Certificates were awarded to the best paper presenters during the valedictory session, followed by a vote of thanks delivered by Kamani Perera, Manager of Research and Development.
The annual symposium of CIPM was a truly inclusive event, attracting a diverse audience that spanned undergraduates, graduates, working professionals, research scholars and lecturers. This widespread interest highlights the symposium’s significance in the field of HRM, offering a unique opportunity for everyone to network and learn from scholarly brains.The CIPM International Research Symposium was sponsored by Hambantota International Port, Sri Lanka Institute of Information Technology (SLIIT), E B Creasy & Co. PLC, and Print Xcel Company.
US sports envoys to Lanka to champion youth development
Rahuman questions sudden cancellation of leave of CEB employees
