Former Energy Minister Patali Champika Ranawaka has told the Public Utilities Commission of Sri Lanka (PUCSL) that its calculation of losses from low-quality coal imports leaves out the value of hydropower used to cover the shortfall.

Addressing the commission, Ranawaka said the calculations for the first 19 coal shipments imported through Trident, and for five later shipments during 2025 and 2026, contained a significant error.

According to the figures he cited, extra coal burned because of the poor quality cost Rs. 7.099 billion. Another Rs. 93 million was spent on maintenance, including ash handling.

A further Rs. 8.572 billion was spent on buying electricity to make up for the drop in coal-fired generation, he said.

Of the 197,673 megawatt-hours (MWh) of electricity lost, Ranawaka said 35,209 MWh was attributed to hydropower and assigned zero cost. “This is a very serious error in the calculation,” he said.

He urged the PUCSL to calculate the opportunity cost of that hydropower. By his own calculations, it comes to about Rs. 2.2 billion.

Background

The PUCSL is the statutory regulator of Sri Lanka’s electricity sector. It reviews tariff proposals and examines the costs that the power utilities say they have incurred.

Coal-fired power plants supply a large share of the country’s electricity, so the quality of imported coal affects how much fuel a plant must burn to produce the same amount of power. When a coal plant produces less than expected, other sources, including hydropower, thermal plants and purchased electricity, must fill the gap.

Ranawaka rejected claims that reservoirs were overflowing during the period, saying they had not reached maximum capacity. He explained that the Mahaweli and Kelani reservoir systems operate as cascades, so electricity can be generated at other reservoirs even when one reservoir is full.

In his view, water used for generation at that time could otherwise have been kept for later use. That would have reduced the need to run plants on expensive diesel or furnace oil, he said.

What it means

The size of the loss attributed to the coal shipments can influence how the regulator treats costs when it reviews electricity prices. Electricity tariffs in Sri Lanka are set after the PUCSL examines the costs submitted to it, so the figures it accepts matter to household and business consumers.

The PUCSL has not yet responded to Ranawaka’s submission in the material available. Whether it will add an opportunity cost for hydropower to its calculation is not yet known.

The figures quoted in this report are those Ranawaka presented to the commission. They have not been independently verified.