Plantation sector urges fair electricity tariffs
View(s):The Planters’ Association of Ceylon (PA) this week called for the implementation of a more sustainable electricity tariff framework and energy generation policy, citing the severe economic strain faced by the plantation sector and other export-oriented industries due to prohibitively high electricity tariffs.
The PA’s appeal comes at a critical juncture, with public consultations on the Ceylon Electricity Board’s (CEB) most recent proposal for a 13.6 per cent hike in tariffs by the second quarter (Q2) of 2026 scheduled over the coming month, it said in a statement.
Following the regulator’s rejection of the previously proposed Q1 hike, the industry now faces the risk of a ‘price cliff’ in April as the utility seeks to recover infrastructure losses and operational deficits.
While agri-businesses require minimal energy inputs during cultivation, plantation operations become highly energy-intensive once crops reach the factory stage, where continuous processing is essential for operational continuity.
The PA noted that, unlike several other key export-earning sectors, RPCs (regional plantation companies) are excluded from any form of concessionary or differential tariff structures. While other export industries often benefit from subsidised infrastructure within dedicated Export Processing Zones or negotiated sector-specific relief, RPCs are billed under standard Industrial (I-2/I-3) General rates.
Consequently, due to the 24-hour nature of tea and rubber processing, RPCs are disproportionately impacted by Time of Use (TOU) peak-hour surcharges. This lack of a dedicated ‘Agricultural Export’ tier means the plantation sector bears some of the highest effective unit costs within the non-domestic category, directly undermining the global price competitiveness of Sri Lankan exports.
This recent proposal around tariff hikes follow’s a previous January 2026 decision by the authorities to freeze tariffs for the first quarter, citing procedural defects in the CEB’s initially proposed 11.6 per cent hike.
While the pause provided a temporary reprieve, the PA called for careful consideration of the impact on export competitiveness given the potentially catastrophic impact on the already high Cost of Production in tea and rubber processing.
In the face of sustained tariff pressure, the plantation industry has proactively pursued strategies to reduce dependence on grid electricity. Across six leading RPCs, extensive energy efficiency and renewable energy projects are already underway. These include the widespread adoption of LED lighting, high-efficiency boilers, variable speed drives for motors and advanced energy management systems deployed across factories and estates.
Several RPC’s have invested in mini-hydro, rooftop and ground-mounted solar, biogas systems, high-efficiency motors, boilers and advanced energy management technologies. Bogawantalawa alone has committed over Rs. 300 million to solar and hydro projects, while Talawakelle Tea Estates invested Rs. 59.3 million in rooftop solar expansion in 2024/25.
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