Sri Lanka has experienced power shortages from time to time since the early 1990s.
These are mainly the result of generating capacity shortages and the inability of
hydropower plants to meet system demand during times of heavy droughts, which come
about every four to five years. The extent of such power shortages has increased in recent
years due to growing electricity demand coupled with inadequate additions to thermal
capacity. In particular, new generation capacity additions as proposed in the long-term
generation expansion plan of the Ceylon Electricity Board (CEB) have not been
implemented in accordance with approved time schedules. The resulting power shortages
have caused both planned and unplanned power interruptions that have seriously affected
the quality of power supplied to consumers. This situation is common throughout South
Asia, where the economies are significantly affected by poor power quality.
Under the South Asia Regional Initiative/Energy (SARI/Energy) Project of USAID,
Nexant SARI/Energy, the technical assistance contractor, has undertaken to study and
assess the economic impact of poor power quality on industry in the South Asia region,
comprising the countries of Sri Lanka, Nepal, Bangladesh and India.
assessment evaluates the costs to these economies resulting from higher energy costs and
environmental impacts of Backup Unit Generation (BUG) and the loss of production due
to poor power quality & reliability.
This report presents the Sri Lanka component of the regional study.
Due to time and budget limitations, the Sri Lanka study was confined to a sample
consisting of 150 industrial installations encompassing all subcategories of industries
(Classification of the Central Bank of Sri Lanka) that provide a significant contribution to
the country's GDP. In addition, the tea and coconut processing industries and the hotel
sector also were included in the sample.
The study found that the main economic impact...