Electricity demand declining in Sri Lanka

"The demand for electricity in Sri Lanka is declining and it is not growing at a rate which it should be," Resource Management Associates Managing Director Dr. Tilak Siyambalapitiya said.

Addressing the Sri Lanka Economic Summit 2008 on Challenges and Opportunities in Infrastructure Development in the power sector, he revealed that 10 years ago the demand growth for electricity was 7.9% which is actually greater than the GDP growth rate, but that now it has slowed down. "The demand for electricity was 4.5% in 2007 and in the first quarter of 2008 it is only 3.6%," he stated.

He further divulged that although there is no immediate threat of power cuts in the near future, 2010 and 2011 will be critical of power shortages. "Compared to the other countries in the region as Sri Lanka has no black outs when the rest of South Asia is under is under severe blackouts," he affirmed. Dr. Siyambalapitiya however conveyed that categorically Sri Lanka has very high power prices  and that if it is not Sri Lanka it is led by Singapore.

He noted that certain countries in the region like India is able to maintain low electricity prices due to the use of indigenous gas, hydro and thermal alternatives to fuel for the generation of power to remain price competitive.

Delving into the problems prevalent in the sector, he claimed that the government is not willing to simplify the tariffs and make them more cost effective as the tariffs in Sri Lanka are now at the most complicated level. He also said that the announcement of subsidies not followed by cheques from the treasury to the Ceylon Electricity Board and the LECO is another issue.

He portrayed that adequate investment funds are available in the sector, even for future use together with assistance from their main supporters Asian Development Bank, World Bank and the Japanese Government. He declared that many energy related projects are already in progress and that the India Sri Lanka Inter connection is entering the stage of feasibility study. According to him the private sector has also invested a 530 Mega Watt oil burning plant and a 120 Mega Watt renewable power plant.