Business Times

Energy-More power play from small timers in the future

By Duruthu Edirimuni Chandrasekera

When compared with the neighbouring countries, Sri Lankan per capita electricity consumption is relatively low creating potential for growth in demand within the next three years, which will see many small players participating in this sector, according to stock market analysts.

“Most of the large hydropower reservoirs have already been used in the power generation process which is why there is more scope for the small power plants to enter into the business,” an analyst said, adding that there will be increased participation from the private sector in the future power generation process.

According to data, the government has initiated several projects to meet the rising demand which includes Broadland Hydro Power Project (to be completed by 2014), Sampur coal fired power station (1st stage 8208 2014), Upper Kotmale hydro power project (to be completed next year) and Puttalam coal power plant (1st stage – 2011).

“Electricity demand which is closely linked to the country’s GDP growth is expected to rise in the coming period due to the revival in the economic activities in the country. Currently the country is heavily dependent on thermal power sources and by the end of 2009 the household electrification would be 85.4%,” Subhashi Jayasumana, Analyst SMB Securities said. She added that hydropower companies have recorded improved earnings in the recent past, which is another attraction into this sector.

“The better tariff rates, increased power generation has resulted in the increased earnings and their strong balance sheet position is backed by the low gearing levels. Relatively stable cash flows and profit margins, relatively high life span of the assets can be identified as few industry specific characteristics among others,” she said, noting that the initial investment required to operate the power plant remains low. As per the 2009 Central Bank report 86% of total households have electricity and per capita electricity consumption is 412.8 Kilowatt per person. Sale of electricity is categorized into four sectors of the economy namely industrial, general, domestic and religious and other. The electricity consumption of the industrial sector superseded the domestic and religious sector until 2006.

However, this pattern has gradually changed and now household and religious sector have come up to the top of the list with a 5.6 % growth compared to 2008.

Top to the page  |  E-mail  |  views[1]
SocialTwist Tell-a-Friend
Other Business Times Articles
Controversy over proposed CCC property deal
RPC looking at acquiring rubber, palm oil land in Cambodia, Vietnam
SEC stands firm on non-credit rule in Jan.
FCCISL AGM tomorrow amidst dispute
SIMs for free!
Christmas parties in Nov.
Tea in a pod
No power cuts till 2020:Power Minister
Short-cut to development-2
Collateral free micro finance: Will the proposed Micro Finance Act kill it?
IMF advises the government to tighten its fiscal policy
Cinnamon Grand launches ‘Diabetic Menu’ on World Diabetes Day
Informatics listed as partner of ICAO
Economic growth not reflected in share market
36% fall in after tax profits for DFCC in 2Q11
Renuka Holdings post-tax group profits up 168% in 1H11
Unit Trust code to be ready by 2011
Hayleys post-tax profits up marginally in 1st half 2011
NDB Group’s Q3 profits grow significantly
High latex rubber prices hurt Dipped Products margins
United Motors Lanka Group says strong half-year performance
Hemas reports 85% 1H11 earnings growth
Major tech expansion by Dialog to cover entire Sri Lanka
‘New questions over Lanka's bid to strike oil’ -- Right of Reply
SL can one day earn 15% of GDP from BPOs
Quick approvals, better infrastructure urged as SL grows
Attracting tourists and other foreigners to Ayurvedic medicine
Aitken Spence to manage 5th Indian hotel
BSA pushes for IPR compliance through SAM
‘Sun shines’ on Sunshine Co. profits
Tea Trails become Sri Lanka’s first Relais and Chateaux resort
Caltex scholarships for automobile workers
Laugfs Gas grew faster than LPG market growth
SLT, Dialog, Singer, Abans and others to collect e-waste for CEA
Weliamuna elected to global anti-corruption Board
Strengthening BOI to spur FDI
Energy-More power play from small timers in the future
SEC’s special ‘eye’ on-line
Sri Lankan-born chef leads Canadian team at world culinary event
Milestone as SLT reaches 200,000 ADSL Broadband customers
Declining interest rates and provident fund holders -- Letter
YESL initiates Entrepreneur Education for children of the war-torn East
More banks, but industry still to operate in Jaffna
ICT4D Java World Congress starts Nov 19
MicroChem gets international accreditation
Maldives wants more tourism with Sri Lanka
Seminar on ‘Proposed Education Reforms’
Sri Lanka Design Festival 2010 to offset carbon


Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2010 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution