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Section II

Assessment of the Impacts of Electricity Subsidies in Sri Lanka

Authors:

W. D. A. S. Wijayapala ,

University of Moratuwa, LK
About W. D. A. S.

Senior Lecturer, Department of Electrical Engineering

Int. PEng (SL), C.Eng, FIE (Sri Lanka), B.Sc. Eng (Hons) (Moratuwa), MEng (Moratuwa)

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T. N. Kankanamge

Ceylon Electricity Board, LK
About T. N.

Electrical Engineer

C.Eng, MIE (Sri Lanka), B.Sc Eng (Hons) (Moratuwa)

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Abstract

The government of Sri Lanka has been providing over decades, subsidies on electricity to uplift the living conditions of Sri Lankans. This research project scrutinizes whether the objectives of providing electricity subsidies have been fulfilled. Furthermore, both positive and negative impacts of the electricity subsidy are descriptively discussed. Appropriate remedial actions are proposed to lessen the effects of indirect negative impacts that are identified. Through the analysis, it was found that some of the primary objectives of the electricity subsidy have not been achieved. One of the most subtle negative impacts of the electricity subsidy is the encouragement it provides to subsidized consumers to use energy inefficient equipment. A case study was conducted in Ratnapura district to investigate the energy inefficient equipment usage and to quantify the resulting electricity wastage. The findings of the study were used to estimate the amount of electricity wasted in the entire country through the use of inefficient equipment. Furthermore, it was found that the existing tariff structure encourages energy inefficient equipment usage and that it therefore acts in contradiction to the fundamentals. The replacement of incandescent lamps by energy efficient equipment is analyzed as a means of saving electricity and meeting the demand during peak times in the night, and resulting savings estimated. Moreover, the investment on replacing incandescent lamps by energy efficient equipment is estimated and its financial returns evaluated.

 

It is also revealed that there are many loopholes in the criteria used for selecting consumers for receiving the subsidy. The major shortcoming is that it allows unwanted people to enjoy the subsidy. It is seen that modifications are needed for the electricity subsidy eligibility criteria to ensure that only needy people receive the subsidy.

How to Cite: Wijayapala, W.D.A.S. & Kankanamge, T.N., (2016). Assessment of the Impacts of Electricity Subsidies in Sri Lanka. Engineer: Journal of the Institution of Engineers, Sri Lanka. 49(4), pp.29–36. DOI: http://doi.org/10.4038/engineer.v49i4.7235
Published on 22 Oct 2016.
Peer Reviewed

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