The Ceylon Electricity Board (CEB) has announced that there will be no reduction in electricity tariffs during the first half of 2024. This decision is attributed to increasing energy demands and a shortage of low-cost energy sources needed to meet an anticipated additional requirement of one billion electricity units next year compared to 2023.
The projected electricity demand for 2025 is estimated at 17.5 billion units. With hydro and coal generation capacities already maximized at 12 billion units, the shortfall must be addressed through renewable energy and oil. While ongoing renewable energy projects are expected to contribute three billion units, the remaining deficit will have to be covered by oil-based generation, which is significantly more expensive.
Pubudu Niroshan, Director General of the Power Sector Reforms Secretariat, emphasized that generation costs account for two-thirds of electricity bills. He highlighted the urgent need for competitive renewable energy sources, particularly wind and solar power, and the transitional use of liquefied natural gas (LNG) to reduce dependency on costly oil-based generation.
In a related development, the CEB's director board has declined requests for employee bonuses this year, despite appeals from the Ceylon Electricity Employees' Union. The union had previously assured workers that protests would not be necessary to secure bonus payments. However, the CEB's financial limitations have prevented the approval of such payouts.
Looking ahead, the most viable long-term solution lies in accelerating renewable energy projects. Investments in wind and solar power generation, coupled with the adoption of LNG as a transitional energy source, could help the CEB manage costs more effectively and potentially offer tariff reductions in the future.
As the nation grapples with rising energy demands and economic pressures, the CEB is focusing on stabilizing its financial health while ensuring a consistent electricity supply to meet the growing needs of consumers.
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