Economics

Sri Lanka to Revise High Renewable Feed-In Tariffs After Competitive Tenders

Sri Lanka will reduce the high feed-in tariffs offered to renewable energy developers following low prices from a 50 MW tender for a power plant in Mannar, according to Minister Wijesekera.

“With the new competitive bids coming in, the Ministry of Power & Energy has already taken steps to revise the feed-in tariff rates and rooftop solar tariff rates,” Minister Wijesekera announced on Twitter.

Formulas for negotiating renewable projects and economic indicators will also be revised. Two years ago, the government increased rooftop solar tariffs from 22 rupees per unit to 37 rupees, the feed-in tariff for ground-mounted solar to 33 rupees per unit, and wind to 30 rupees per unit to encourage developers in the sector.

The tender for the Mannar plant came in at 4.88 US cents (approximately 14.80 rupees at 305 rupees to the US dollar). A tender for 165 MW small ground plants came in at 15 to 29 rupees.

Administratively decided feed-in tariffs have been controversial for years, as small plants under competitive tender drew bids at low prices due to high competition, challenging the conventional logic of ‘economies of scale.’