Concerns over neglect of small hydropower plant owners

Friday, 20 December 2024 00:00 - - {{hitsCtrl.values.hits}}

It appears that the Ceylon Electricity Board (CEB) has shown minimal consideration towards small hydropower plant owners. Despite paying premium rates per unit of electricity generated by other categories of private power producers, the payments made to mini-hydro power plants remain disproportionately low. This discrepancy is a cause for concern.

While an acceptable rate is paid during the first 15 years or so of operation, subsequent payments drastically reduce to negligible amounts. This is particularly troubling given that small hydropower turbines and generators are often designed for lifespans exceeding 75 years. The rationale for reducing payments after just 15 or 20 years in some instances is difficult to justify.

The disparity is glaring when compared to the payments made to diesel and wind power plants, which continue to receive substantial financial support. The failure to extend similar terms to small hydropower plants is both regrettable and inequitable.

Every kilowatt hour of electricity produced by these projects holds the same value, yet the reasons cited for such discriminatory treatment seem implausible at best. It is hoped that the relevant authorities will address this matter promptly and equitably.

The exploitation of small hydropower plant owners is further compounded by the CEB’s justification that once the initial investment is recouped, there is no need for higher payments. This perspective fails to consider the operational costs, including maintenance and salaries, which remain ongoing.

According to sources several investors have obtained Letters of Intent (LOIs) to construct new power plants either upstream or downstream of existing small hydropower plants. However, these new developments cannot proceed until the current power plants are decommissioned. This situation may have arisen due to either a reduction in water resources or limitations in the capacity of the transmission system, or potentially both factors combined.

This creates unnecessary competition, undermining the viability of existing facilities, and forces Sri Lanka to incur significant foreign exchange costs for new investments.

The Government, including the President and the relevant ministers, must address these issues, ensuring a fair playing field for all stakeholders in the energy sector. It is imperative to eliminate the outdated concepts of “cheap kilowatt hours” and “expensive kilowatt hours” and to support the longevity and sustainability of the country’s existing small hydropower plants. It must be examined whether the politicians who have been in power so far lacked the intelligence to understand this or deliberately avoided it.

In conclusion, the current state of affairs in the energy sector highlights inefficiencies and corruption that need urgent reform. The responsible authorities must ensure that small hydropower plant owners, who have served the nation reliably for decades, are treated with fairness and respect. This step is vital to securing the future of Sri Lanka’s energy sustainability.

K.R. Pushparanjan