The Supreme Court has directed the Ceylon Electricity Board (CEB) to identify and take “appropriate action” against officials responsible for blocking a solar power project of a private company that had fulfilled all the conditions to secure a “letter of intent” from the board.
The findings and action taken in this regard must be reported to court, the judges said.
The stinging ruling saw Justice Yasantha Kodagoda hold the first respondent CEB and the second respondent Sri Lanka Sustainable Energy Authority (SLSEA) responsible for their failure to efficiently mobilise new generation projects for the production of electricity using the abundant renewable energy resources in the country. Justices Gamini Amarasekara and Dileep Nawaz agreed.
The 2022 situation was a stark reminder of how the lack of support from CEB and SLSEA for private enterprises in renewable electricity generation and integration into the national grid could cause severe damage. The judgment reported that the country and its people suffered greatly due to inadequate energy generation and over-reliance on petroleum.
“At the time of writing this judgement, the critical importance of generating electrical energy using sustainable and renewable energy resources available in abundance in Sri Lanka, and the devastating consequences that have arisen out of the failure on the part of agencies of the State to voluminously and efficiently mobilise new renewable energy generation projects for the generation of electricity using solar and wind power and other renewable energy resources are felt unlike ever before.”
Vavuniya Solar Power (Private) Limited petitioned the Supreme Court that it applied to the SLSEA in 2012 for approval to commission and operate a solar-powered electricity generation plant in Vavuniya.
The CEB, which is the power purchaser, first required the company to change the technical design of the proposed plant to include a battery storage system. Later, after being instructed to remove that system from the design, Vavuniya Solar Power was granted a “provisional approval” by the SLSEA, which ordered it to obtain several other approvals from state entities.
One of the SLSEA’s conditions was that the company must obtain a “letter of intent” from the CEB signifying that the utility was ready to link the electricity generated by the plant to the national grid and also to purchase it. However, the CEB did not grant the required document, thereby preventing the company from securing the SLSEA permit.
The company argued before the Court that, in view of the provisional approval it received from the SLSEA and having complied with all other conditions, it entertained a legitimate expectation that it would receive a letter of intent from the CEB and, thereby, the permit it had applied for.
The CEB maintained that, in view of an amendment introduced to the Electricity Act in 2013, it was not in a position to comply with the petitioner’s request and that it was required to select a suitable project proponent by calling for tenders and negotiating the purchase price of electricity.
Having the law relating to the doctrine of legitimate expectations, among other things, Justice Kodagoda found that the claim of Vavuniya Solar Power that it expected to be issued a letter of intent by the CEB—and, thereafter, a permit by the SLSEA—was “an expectation which it was legitimately entitled to entertain”.
The Court held that the Sri Lanka Electricity Act, as amended, did not legally compel the CEB to call for tenders, select a project proponent, and negotiate the price in order to issue a letter of intent. This was because the on-grid electricity generation project proposed by the petitioner using renewable energy would not produce over 10 megawatts. It was thus governed by a “small power purchase tariff” approved by the Public Utilities Commission of Sri Lanka.
The CEB’s decision was held to be untenable in the eyes of the law and arbitrary. The Court decided that the CEB and the SLSEA had jointly infringed the fundamental right of the petitioner to equal protection of the law and, inter alia, the right to engage in the lawful business which it has chosen, planned and applied for, also guaranteed under the Constitution.
source; Sunday Times
