Lopsided decisions on energy
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The topic was energy and the government’s painstaking efforts to combat allegations of fraud or official bungling in recent coal purchases to run the Norochcholai coal power plant.Was it a scam? Did the government at ministerial-level make the wrong decision? Was it official bungling? Or was it a simple case of the supplier sending inferior coal?
These were questions raised during a conversation on Thursday with Ruwanputha, a young economist. “There is a lot of heat over the ’seemingly’ inferior coal purchases,” I said. “Indeed, the government seems to be on the back-foot on this issue. Why can’t they come out and clearly explain what went wrong instead of waiting for the opposition to increase its rhetoric and point fingers of irresponsibility,” asked Ruwanputha.
“I think the problem is governance and the government’s immaturity in dealing with problematic issues. When do you admit something is wrong and when do you come clean on issues of governance? To the government it may reflect badly on their governance, that’s why they are slow to react,” I said. The Sunday Times also had a comprehensive report last week on the issue.
According to a February 19 letter issued by Ceylon Electricity Board (CEB) General Manager K.S.I. Kumara to the Secretary, Ministry of Energy, the total loss from the faulty coal was Rs. 7.67 billion. Was this a loss or did the authorities penalise the supplier for faulty coal?
To some extent the doubts were cleared by Cabinet spokesman and minister, Dr. Nalinda Jayatissa, who told the media in the early part of the week that a total of US$ 4.35 million in fines was imposed on the supplier.
He told reporters that the first shipment, containing 59,831 metric tonnes, was found to be sub-standard and hence a penalty of $ 2.07 million was imposed. This was followed by fines of $ 436,000 on the second shipment, $ 484,929 on the third, $ 345,652 on the fourth, $ 500,192 on the fifth and $ 510,677 on the sixth shipment imposed for faulty coal.
This total amount in Sri Lanka rupees comes to over Rs. 1.2 billion which is still not close to the estimated Rs. 7.67 billion loss calculated by the CEB.
Dr. Jayatissa is reported to have said that penalties are imposed if the calorific value falls below specified, laid-down standards.
While strong pressure has been mounted by the Opposition calling on Energy Minister Kumara Jayakody to take responsibility for the fiasco and resign, the Opposition Leader’s call for a proper inquiry into the issue has resulted in the government appointing a technically-skilled committee to examine all issues pertaining to the faulty coal purchases and submit a report.
There are also allegations that there is a coal mafia with ‘official’ endorsement operating, a claim rejected by the government which says that the suppliers were those which have been supplying coal for many years.
There is, however, a bigger picture emerging and this is about the country’s total energy requirement in the future which includes hydropower, fossil-fuel generated (diesel plants) and renewable energy – wind, solar, etc.
Amidst all this drama, the CEB has requested a 13.56 per cent increase in electricity tariffs for the second quarter of 2026. In response to this request, the Public Utilities Commission of Sri Lanka (PUCSL) has opened the request to public comment. The CEB had earlier requested an 11.5 per cent increase in rates for the first quarter of 2026 but this was denied by the PUCSL.
The government, past and present, has set a goal of achieving 70 per cent of the country’s energy requirement through renewables by 2030 and furthermore of becoming carbon neutral by 2050. The Renewable Energy Resources Development Plan 2025–2030, approved by the Cabinet, is a key element of this strategy.
However, renewable energy producers, particularly those involved in solar power generation, complain that the CEB has a ‘lukewarm’ approach to solar energy which is contrary to the stated and explicit goal of renewable energy. “The head honchos (leadership) at the CEB are known to oppose solar power generation and promote energy from other fuels,” said a renewable energy expert, adding: “How can the CEB contradict the government’s future energy plans?”
In fact, many renewable energy producers, disgruntled over the negative attitude of the CEB to new solar power projects, are forced to go overseas with their investments, particularly to Africa.
Another problem is that if there is more renewable energy, it would affect usage of the grid, which is an issue as the grid has limited capacity. Usage of the national grid is essential and at one point, the authorities wanted solar power households to switch off solar power generation as increased solar power was affecting the grid.
Some renewable energy experts believe the authorities should set up small, local grids at district level which then can harness the abundance of renewable energy, instead of relying on the national grid. Another option is to promote battery storage systems (BESS) that can store excess energy. In fact, the Grid Connected Solar Power Association in January warned of a severe crisis impacting Sri Lanka’s renewable energy industry. Developers supplying over 3,300 MW warned that arbitrary CEB curtailments and the proposed National Electricity Policy 2025 were putting the entire sector at risk. It said there was a Rs. 2 billion loss due to ongoing power curtailment.
Phew! I really needed a break to get ‘more energy’. Walking to the kitchen I found a plate of ‘maalu paan’, and picking up one and also a mug of tea, I could overhear the conversation of the trio under the margosa tree.
“Mokada ara adyapana saha pela-poth prashneyta wela thiyenney (What happened to that education problem and some text books),” asked Serapina. “Mama hithanney eh poth avalangu kara kiyala (I think they cancelled these books),” said Mabel Rasthiyadu. “Eka hondai. Mokada nethnam lamainta prashna athiwenawaney (This is good because children should not be affected by these issues),” noted Kussi Amma Sera.
Back to today’s topic, the government seriously has to engage with private solar producers and ensure that Sri Lanka has the correct renewable energy policy in line with the 2030 goal, not oppose renewable energy suppliers; and also ensure the CEB is in line with renewable energy expectations.
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