P OLICY AND R EGULATORY F RAMEWORK AND E NHANCEMENT OF E LECTRICITY T RADING IN S OUTH A SIA Damitha Kumarasinghe Director General Public Utilities Commission of Sri Lanka 15 January 2016
S RI L ANKA E LECTRICITY I NDUSTRY S TRUCTURE GOSL / Cabinet of Ministers GOSL / Cabinet of Ministers Minister of Finance and Planning Minister of Power and Energy Public Utilities Commission of Sri Lanka (Regulator) Corporate IPP Generation CEB Transmission D1 D2 D3 D4 LECO 2 Consumers
S RI L ANKA P OWER S YSTEM Generation Capacity (3,602 MW) Large Hydro 1,361 MW CEB Thermal 1,103 MW IPP Thermal 771 MW NCRE 367 MW (271 MW mini-hydro, 78 MW Wind) Peak Demand – 2,100 MW (excluding NCRE) Sales – 10,500 GWh Consumers – 5.5 Million CEB Transmission System 220kV and 132 kV CEB does 85% of distribution, rest by LECO 3
P UBLIC U TILITIES C OMMISSION OF S RI L ANKA PUCSL established under Act No. 35 of 2002 PUCSL empowered to regulate the electricity industry under Sri Lanka Electricity Act, No. 20 of 2009 4
P UBLIC U TILITIES C OMMISSION IN E LECTRICITY I NDUSTRY acts as Economic, Technical and Safety Regulator Advice Government on all matters related to the Industry Exercises Licensing, Inspecting, Standardizing, etc of of the Industry Regulate Tariffs Efficiency promotion and information dissemination Has to ensure coordinated, efficient, economical and uninterrupted supply at all times throughout Sri Lanka 5
L EGAL P OSITION GENERATION License required and Government shareholding required for plants above 25MW Generator requirement need to be identified in LT plan Competitive Bidding TRANSMISSION License required; Ceylon Electricity Board (CEB) by the Act. DISTRIBUTION License Required; four Licenses to CEB and one for its subsidiary- LECO Private companies can get License - require >50% 6 Gvt ownership TRADING A function of Transmission Licensee – single buyer
M ARKET R ISK No (minimum) risk Single buyer model Government Guaranteed contracts Minimum Dispatch Requirements Fuel supply risk with Government/ CEB 7
O PERATOR V IABILITY AND R IGHTS Legally ensured Required to allow recovery of all reasonable costs of a Licensee Minimum fixed return on Investment as per PPA Stringent procedure to issue enforcement orders Revocation of License is difficult- Provide Certainty Minister Concurrence Public Notice 8
A REAS TO I MPROVE IN R ELATION TO C ROSS B ORDER T RADE Open access would attract investment- but require amendments to Law Handling Trading and related dispatch in the event of International Trading Private parties that intend to invest in Generation (>25 MW) will have to have a Government share, this might not be attractive 9
I NDIA - S RI L ANKA U NDERSEA HVDC T RANSMISSION L INK Pre-feasibility done 2002 and 2006 Originally planned for 500 MW upgradable to 1,000MW Agreement signed to conduct a detailed feasibility – collaboration with Power Grid India and Ceylon Electricity Board 10
Madurai- Anuradhapura selected 285 km 50km undersea ±400kV USD 800 Mn 11
P OWER TRADING THROUGH I NDIA - S RI L ANKA L INK Opportunity power deficits at various time intervals Large scale Transmission network developments in India Very attractive peak prices observed in the Indian Power Exchange Potential savings by spinning reserve reduction on both sides Few large Coal Power plants being built in the country- base load may not be sufficient One 250 MW x 2 coal plant proposed in the East coast in collaboration with NTPC, India Large Renewable Energy potential in Northern part of the country All depends on Indian/ Sri Lankan policy 12
S RI L ANKA E LECTRICITY L AW AND R EGIONAL I NTERCONNECTION Open Access is not allowed All trading has to go through CEB- Transmission Licensee (Single Buyer) Any Generation procurement to be included in Least Cost Long Term Generation Expansion Plan- Ensure least cost criteria 13
T HANK Y OU 14
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