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Electricity consumption: A worrying decline?

18 Sep 2022

By Vinu Opanayake    Sri Lanka has begun to witness a drop in power consumption, even before the recently-announced electricity tariff hikes have started to kick in.   Public Utilities Commission of Sri Lanka (PUCSL) Chairman Janaka Ratnayake told The Sunday Morning that surprisingly, despite the reduction in power cut hours, consumption of electricity had come down by about 25%.   “If we take the electricity consumption on a weekday, it now stands around 35-40 million units per day from 48-49 million units that were recorded several weeks ago. The weekend consumption is now around 33-35 million units per day, which too is a drop of about 25%,” Ratnayake stated.   He said that this number was despite the gradually-reducing power cut hours, pointing out that if the drop in consumption had happened a couple of months ago, it could have been pinned on the prolonged power cuts.  He also stated that even though a cold weather pattern had been observed islandwide in the past few days which may have resulted in people reducing the usage of fans and air conditioners, it still could not have resulted in such a double-digit percentage drop. “We have been having minimum power cut hours now. Therefore, one could expect that the recent tariff hikes may be the reason, but those new tariffs are yet to kick off in the bills, so the tariff increase cannot be the reason. I think people are becoming mindful of electricity consumption and opting for alternatives such as solar and wind energy,” Ratnayake noted.  However, he expects electricity consumption to drop further from this month onwards due to the newly-implemented electricity tariffs. According to the latest available data from the Asian Development Bank (ADB), Sri Lanka’s per capita electricity consumption was 626 kWh/person in 2017, lower than that of India and many developing countries in Southeast Asia. In 2017, the share of sales to household customers was 37% and industrial customers was 32%, while the sales share to the commercial sector was 29%.    Decline welcome, unless via industrial   LIRNEasia Chairman Professor Rohan Samarajiva speaking to The Sunday Morning stated that a decline in electricity consumption was a good development as it would make us rely less on expensive diesel power for a shorter period of time.   “We should encourage consumers to reduce their electricity usage. Many countries have taken a number of measures, including encouraging the usage of energy-efficient electronic appliance usage,” Samarajiva added.   However, he noted that if the drop in electricity consumption was from the industrial sector, that was a matter of concern: “If industrial sector electricity consumption has gone down, that would either mean that factories are being closed or they have run down on production. This needs to be investigated, but apart from that, I see nothing wrong in people being frugal with electricity usage,” he stated.     Consumption by factories rises   Speaking to The Sunday Morning, National Chamber of Exports (NCE) Secretary General Shiham Marikkar assured that factories were up and running and in fact were consuming more electricity than they used to, as the country was now geared towards becoming an export-oriented economy.  “None of our members have decreased their electricity consumption. In fact, consumption has gone up now. It is true that our businesses will have higher electricity bills due to the tariff hike and also higher water bills. These will add up to our expenditure, which is inevitable. Businesses will definitely feel the burden, but we are operating as usual as we are focused on increasing the country’s production,” Marikkar stated.  Further, he noted that businesses were exploring ways to move into renewable energy in the long term, but pointed out that the one-time cost of setting up renewable energy infrastructure was much higher than it used to be and therefore the business community had reached out to the authorities seeking a solution.  “We inquired from the authorities whether there were any organisations that would assist businesses in converting energy bases to renewable energy at an affordable cost and we are looking at this now,” he stated.  Marikkar confirmed that factories were running as normal or more than they used to, with the country’s exports continually passing the $ 1 billion mark in earnings every month now.     Economic contraction   Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) Secretary General Rohan Masakorala told The Sunday Morning that when the prices of electricity rose, there would inevitably be a decline in consumption. However, he noted that along with the drop in consumption, the economy too would inevitably shrink and pointed to the statement made by the Central Bank Governor Dr. Nandalal Weerasinghe on potential economic contraction this year.  “With inflation, people’s disposable income has come down and they have reduced electricity consumption. This is a market-based reaction to any good or service. Consumption patterns change and along with consumption, the economy will contract,” Masakorala explained.  He stated that Sri Lanka needed to adjust to reality and noted that services could not be provided at subsidised rates, as doing so had led the Government to venture on a borrowing spree in the past few years. He said that even though a contraction was expected, the economy was likely to adjust in the next two years to come.    Fossil fuels power up Sri Lanka   Sri Lanka’s electrification rate stood at 99.3% in 2016, compared to just 29% in 1990, showing steady progress in improving access to electricity. However, the country remains highly dependent on fossil fuels, according to the Asian Development Bank (ADB).  In 2016, thermal power contributed 67.2% of total power generation, compared to 24.6% and 8.2% contribution from hydropower and nonconventional renewable sources (solar, small hydropower, and wind), respectively. This dependence on carbon-emitting energy sources makes Sri Lanka vulnerable to fluctuating fuel prices, while hampering the Government’s efforts to reduce greenhouse gas emissions by 20% as part of its commitment to the Paris Agreement. It should be noted that coal and petroleum are imported fossil fuel resources and these imports weigh on the country’s import expenditure. On the other hand, per capita energy consumption is on the rise with improving living standards. Furthermore, Sri Lanka’s public transport sector depends entirely on energy generated from fossil fuels.  According to the ADB assessment of Sri Lanka’s renewable energy sector, the annual average Global Horizontal Irradiance (GHI) varies from 4.5 to 6.0 kWh per square metre per day (kWh/m2/day) across the country.  During the day, solar energy alone will be sufficient to meet the country’s demand. At the same time, during the day, there is likely to be a significant curtailment of wind power if the energy generated is not stored. The total storage requirement is expected to be 15,000 MW. The technical resource potential for solar power generation is estimated to be 6,000 MW.  The CEB’s Long-Term Generation Expansion Plan believes that the solar capacity in Sri Lanka will rapidly grow, faster than wind, and its energy contribution will rise steadily over the planning period with the projected development. However, many experts, policymakers, and regulators, including Ratnayake, have questioned why the CEB has been dragging their feet on implementing a policy of rapidly-integrating renewable energy sources into the national power grid. According to a research paper titled ‘Renewable energy resources in South Asian countries’ by the Energy Centre of Maulana Azad National Institute of Technology Bhopal in India, in terms of solar energy generation, Sri Lanka has the potential to produce 5 kWh of solar power per day. Nevertheless, Sri Lanka is yet to efficiently leverage 100% of its sunlight resources in producing solar power.  


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