LNG on Paper, Diesel in Reality: 350MW Sahasdhanavi CEB's newest power plant deal

⭕ CEB signed a Power Purchase Agreement (PPA) for the 350 MW Sahasdhanavi Combined Cycle Power Plant, meant to be LNG-based, built by Sahasdhanavi Ltd on a build, own, operate & transfer (BOOT) basis.

⭕ Despite its LNG label, the plant will run on diesel initially, with a future upgrade planned. This mirrors the Sobadhanavi 1 plant, touted as Sri Lanka's first LNG facility, which President Ranil Wickremesinghe opened before the 2024 elections and still runs on diesel.

⭕ The reality is Sri Lanka 🇱🇰 currently lacks operational LNG infrastructure, including a terminal, regasification facility, storage tanks, or connecting pipelines. There is no concrete, realistic operational plan or timeline for building this infrastructure. They exist on paper, but with continued delays, very little has been done to date to build the infrastructure. It's a miracle if these can get running on LNG within the next 5 years.

⭕CEB got the approval for the project basically with presenting cabinet paper with wrong numbers, PUCSL warned Cabinet was misled on project costs, stating outdated figures were used:

- Diesel prices at Rs.111/litre (actual price: ~Rs.285/litre)
- LNG at $10/MMBtu (realistic 2025 market rate: ~$17/MMBtu or more)
- Exchange rate at Rs.195/USD (current rate: ~Rs.300/USD)

⭕ Based on real market data, PUCSL estimates CEB will pay Rs. 72+ per kilowatt-hour (kWh), significantly higher than the claimed Rs. 20. (Ref: PUCSL letter, April 3, 2025).

⭕ If CEB is willing to pay Rs.72/kWh for diesel electricity, why couldn't they offer better proposals for battery-backed solar power at Rs.56/kWh for peak-time usage? It would have the additional benefit of allowing a percentage of current daytime generation to be moved to peak time, contributing to a much more stable grid in the day time.

⭕ Political parties may trade power in Sri Lanka, but behind the scenes, the 'Diesel Mafia' continues its stranglehold on energy policy, ensuring fossil fuels remain dominant while clean energy solutions are methodically sidelined and suppressed.

#SriLanka #Energy #CEB