Who's trying to derail power sector reforms?

THE reform of the power sector and the restructuring of the Ceylon Electricity Board (CEB) were key election promises made by the current NPP Government.

- By Dilakshan Seneviratne

This initiative stands as one of their flagship projects and is progressing well, staying on track as planned.

Despite this, there have been murmurs of dissatisfaction from groups claiming to represent the business community, trade unions, and the solar energy lobby. The writer believes it's time to clarify the situation by distinguishing between fact and speculation.

An earlier article by the same author, published on 1 July 2025 in this newspaper (https://www.ft.lk/opinion/Electricity-reforms-and-CEB-restructure-Confusion-conjecture-or-calmness/14-778393), outlined some key aspects of the proposed CEB restructuring.

Some critics have questioned the unbundling of the CEB, suggesting it is an unprecedented move. However, it's worth examining how countries such as the UK, Australia, and Vietnam have carried out their own electricity sector reforms, ranging from full privatisation to models with minimal or no competition.

How did other countries reform their electricity industries?

In Australia, the privatisation of electricity assets has been a gradual process. Reforms began in the early 1990s, but the National Electricity Market Management Company (NEMMCO) which operated the national grid remained fully government-owned until 2009. It was then replaced by the Australian Energy Market Operator (AEMO), a not-for-profit public company with 60% government ownership. Sri Lanka's proposed National System Operator (NSO) will perform a similar role.

Prior to reforms, Australia's state-owned electricity utilities were vertically integrated, much like the CEB. Following restructuring, electricity generation became a competitive market, while transmission and distribution, considered natural monopolies, were regulated and separated into independent entities.