 
The Ceylon Electricity Board (CEB) has confirmed that electricity tariffs will not be reduced during the first half of 2024. This decision is driven by rising energy demands and a shortage of low-cost energy sources to meet an expected additional requirement of one billion electricity units compared to 2023.
For 2025, electricity demand is projected to reach 17.5 billion units. With hydro and coal generation capacities maximized at 12 billion units, the shortfall must be addressed through renewable energy and oil. Renewable energy projects are anticipated to provide three billion units, leaving the remaining deficit to be fulfilled by oil-based generation, which is considerably more expensive.
Financial Pressures and Debt Management
The CEB continues to face
significant financial pressures. By August 31, 2023, it allocated Rs. 112
billion to service debts owed to institutions such as the Ceylon Petroleum
Corporation (CPC). Despite a recent tariff revision passing Rs. 41 billion of revenue
difference to consumers, this adjustment has not been sufficient to alleviate
the organization’s fiscal constraints. Consequently, reducing tariffs in the
short term remains unfeasible.
Reforms and Transition to Renewable Energy
Pubudu Niroshan, Director General of the Power Sector Reforms Secretariat, emphasized the critical role of generation costs, which account for two-thirds of electricity bills. He advocated for increasing reliance on competitive renewable energy sources, particularly wind and solar power, to address high generation costs. He also identified liquefied natural gas (LNG) as a transitional energy source to reduce dependency on oil-based generation.
Accelerating renewable energy projects remains a top priority for long-term sustainability. Investments in wind and solar power, alongside LNG, could help manage costs more effectively, allowing for potential tariff reductions in the future.
Employee Bonuses Declined Amid Financial Constraints
The CEB’s director board has rejected employee bonus requests for the year, citing financial limitations. Although the Ceylon Electricity Employees' Union had previously assured workers that protests would not be required to secure bonuses, the CEB's fiscal realities have made such payouts impossible. This decision underscores the organization’s broader financial challenges and its focus on maintaining operational stability.
Future Outlook and Strategic Focus
As Sri Lanka faces rising energy demands and economic pressures, the CEB is prioritizing financial health while ensuring consistent electricity supply to meet consumer needs. By accelerating renewable energy adoption and optimizing its generation mix, the CEB aims to mitigate costs and achieve long-term sustainability. This strategy reflects the nation’s commitment to addressing energy challenges while balancing economic and environmental priorities.
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