New tariff structure to hit small hydro power developers

The new tariff structure approved by the Cabinet will adversely affect small hydro power developers in the country. Small power developers fear that if the new tariff structure is implemented it would be to the detriment of the industry.

The Cabinet approved the new tariff scheme on October 9 paving the way for a revision of the existing payment rates.

The Working Committee said that incentives given to small hydro power producers were higher than the present tariff structure. The new tariff scheme stipulates that Rs. 6.48 will be paid per electricity unit for the first six years and thereafter Rs. 2.36.

The small hydro power sector contributes 100MW to the national grid and targets 300MW by 2008. The Ceylon Electricity Board (CEB) said that there would be power cuts in 2008. The CEB has to be more proactive and avert such situations by cooperating with the industry.

Local hydro power developers, engineers and other stakeholders said that the new tariff structure is not only an injustice but also an insult to the small hydro power sector who make a significant contribution to the country.

President, Small Hydro Power Developers Association, Dr. Nishantha Nanayakkara said the Cabinet proposal was made in a haphazard manner by a few members of the Working Committee.

The key stockholders of the hydro power sector were not consulted by the Working Committee before forwarding the proposal to the Ministry of Power and Energy.