February 17, 2020
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    CEB predicts 7.5% sales growth in 2020-21

    December 31, 2019

    In terms of electricity demand growth and investment needs, single-buyer and transmission licensee Ceylon Electricity Board (CEB) forecasts that sales will grow at the rate of about 7.5% until 2021 and then decline to about 5% per year by the end of the decade.The peak demand is forecasted to cross 3,000 MW by 2020 and reach 4,800 MW by 2030. Significantly, the time of occurrence of the peak demand is expected to shift from the present late evening (typically 7 p.m.) to early afternoon (typically 1 p.m.), by 2027, according to Asian Development Bank’s Sri Lanka Energy Sector Assessment Strategy and Road Map Sri Lanka.

    To meet the growing demand at the lowest cost, CEB plans indicate the investment requirements for power generation to be $2,400 million from 2020–2025.“Matching investments are required for transmission (to interconnect generating facilities), estimated to be $320 million and in distribution (to serve the growing demand and to improve reliability of supply to customers) a further $60 million,” the report said. In terms of petroleum sales growth, no formal forecasts are published by Ceylon Petroleum Corporation (CPC), but it is expected that the growth in sales of petroleum products will remain at 5%– 10% per year. No specific investment plans are published by petroleum industry entities.

    Giving an overview of the Electricity industry in Sri Lanka, the report highlights that at present, the electricity industry has three major constraints, such as capacity shortage and delays in implementation of mainstream power plants, slow growth in renewable energy development and severe financial crisis, mainly attributed to non cost reflective tariffs.

    “The capacity shortage has to be resolved by building larger power plants. CEB has proposed that the two cancelled coal-fired power plants be revived and built using the latest technology. Additionally, two combined cycle power plants are required to be built to cater to seasonal shortages of hydropower.”

    CEB expects the liquefied natural gas (LNG) import terminal to be ready by 2023, already behind its previous schedule at 2020. Renewable energy development through solar and wind investments by the private sector is effectively at a standstill, owing to legal impediments and lack of clarity on the feed-in tariffs. Solar and wind parks have been put out for competitive bids, but only a handful have materialized. These shortcomings have to be resolved, to create a healthy environment for private investors to build solar and wind power plants in the long

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