“Multi-buyer model must for power sector” | Daily News

“Multi-buyer model must for power sector”

Riyaz Sangani
Riyaz Sangani

As part of the CEB restructuring process, it is essential to have a multi-buyer model and an independent system control relating to power generation, planning. CEO Vidullanka PLC, Riyaz Sangani, said.

Whilst expressing hope that the restructuring of CEB would happen sooner than later to help to reduce the draining of immense resources, Sangani emphasised the need to have a multi -buyer model allowing the private developers to sell power to different buyers.

“Otherwise we are selling to the same buyer which has monopolistic power, making it difficult for power generators like us to negotiate in a big way.”

Despite the government’s ambitious target of increasing the contribution of renewable energy to 70% to the national grid by 2030, Sangani says the interim budget has simply mentioned allocating land for renewable energy projects, rather than addressing the real issue.

“I wish the budget had more emphasis on building the confidence of developers and to come out with a good tariff structure. I hope this will get addressed in the next budget, so that the renewal industry can move faster. To develop and reach set targets in the industry, Sangani highlighted the need to build confidence, which has eroded fast.”

According to Sangani, industry confidence has eroded mainly attributed to outstanding dues to be paid by CEB to the developers. “I know we are in a crisis situation and outstanding dues will be credited, but then the economics are far away from this. Explaining further, Sangani stated that despite recent tariff increases, the estimated loss of CEB stands at Rs. 250 billion.

“Somewhere down the line the treasurer will have to give this money. Otherwise there won’t be energy in the country and the country will be a total back out .Whichever way it’s going to come to the treasury and we need to find solutions in this end in a speedy manner.”

According to Sangani, renewable energy is one way where the country can bring down the energy costs and help the total economy.

“Another thing I think we should have addressed is the tariff; because at the end of the day renewable energy will have to be developed by the private sector and the CEB has not been successful at it. Central Bank report of 2020 says that, 96 % of work on the Uma oya project has been completed by 2020 and today that 4% is still not completed after two years.”

Sangani said the private sector has to drive when it comes to developing power projects and in this regard, the private sector needs a commercial case and that commercial case will come only if there is a proper tariff system.

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