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The World Bank initiated the Energy Services Delivery (ESD) project in Sri Lanka to support the development of renewable energy-based power generation. ESD project provided substantial amount of financing for small hydropower plants operating in the grid-connected mode selling electricity to the national utility – Ceylon Electricity Board (CEB) on a standardized power purchase agreement.

The purchase tariff is calculated and announced by CEB at the beginning of each year. This tariff calculation is based on the principle of avoided costs to the utility as result of inputs to the grid from small power plants.

Concerns had been expressed about the methodology adopted by CEB to calculate the tariff, and the suitability of the principle of avoided costs itself. Furthermore, small power developers have claimed that they too should receive a capacity charge similar to what is paid to the large independent power producers. Views had also been expressed about the lower levels of the tariff, which was not adequately stimulating a rapid development of the remaining small hydroelectric sites and other renewable sources of energy.

The World Bank under the ESD project assigned RMA to conduct a study to analyze and propose improvements to the present method of CEB tariff calculations, and to examine whether capacity credits accrue to the utility with the embedded generators.

The work extensively used CEB’s WASP and METRO planning models.

RMA was selected by the World Bank and Ceylon Electricity Board (CEB, the National Electricity Utility in Sri Lanka) to prepare a Guide for grid interconnection of small power plants embedded in the distribution system of Sri Lanka.  RMA provided the Consulting Services to this project jointly with DULAS Ltd. of UK.

Connection of relatively small, embedded power plants to the CEB network commenced in the mid-1990s. These embedded power plants are mostly built, owned and operated by non-utility Companies and individuals.  Presently, most of these are small hydroelectric plants, with a few Combined Heat and Power plants also in operation. There are purpose-built, investor-owned power plants as well as those with a captive load, such as a tea factory.

The interconnection agreement between the CEB and the Generator is based on a Power Purchase Agreement, which has been standardised by the CEB. The technical requirements for the safety and protection of equipment used for the interconnection were guided by the G/59 Technical Recommendations published by the Electricity Association of the UK. There was a need to streamline the design, testing and commissioning of the interconnection of  embedded power plants with the Grid to match specific situations in Sri Lanka.

RMA in association with DULAS Ltd. of UK, developed the Guide Book, after studying the specific requirements and characteristics of both the CEB grid and the small power plants. Services provided to CEB also included two Training Courses conducted by RMA/DULAS.