Renewable energy in peril as tariff shake-up threatens billions in losses

THE Federation of Renewable Energy Developers (FRED) yesterday sounded the alarm over a looming crisis sparked by the proposed new tariff system awaiting Cabinet approval.

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With 150 to 200 projects stuck in limbo, FRED warns that if progress stalls, the Ceylon Electricity Board (CEB) could face annual losses exceeding Rs. 13 billion.

Speaking to the media, FRED Chairman Thusitha Peiris highlighted one of the most contentious aspects of the proposed agreement is a clause allowing the CEB to unconditionally limit the intake of electricity from renewable projects into the national grid.

He criticised this provision, warning that it undermines investor confidence and discourages expansion in the renewable energy sector.

"The ramifications of these stalled projects extend beyond the industry itself," he said.

Peiris revealed that if 300 MWs of renewable energy is lost due to the tariff policy, it would mean a reduction of over 500,000 units of electricity in the national grid next year. “To compensate for this shortfall, the CEB would have to rely on coal-based power, which would cost an additional Rs. 13-15 billion annually,” he opined.

Peiris said that even solar power projects under Piyasa, though not affiliated with the federation, are in jeopardy due to the new tariff structure.