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As enacted
Contents

Part IV · Establishment of the National System Operator

11. Procurement

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

The National System Operator shall, in accordance with the Long Term Power System Development

Plan, procure-

(a)

electricity, generation capacity and energy storage capacity by calling for tenders based on the following procedure:-

The National System Operator shall call for proposals to proceed with the procuring of any new generation plant or for the expansion of the generation capacity of an existing plant in excess of the threshold capacity mentioned in subsection (3), energy storage capacity and any other form of ancillary service capacity, and the procurement including procedures adopted for public private partnership shall be undertaken in a transparent and competitive manner.

Electricity Industry specific procedures for such procurement and the formats required therefore shall be prepared in consultation with the

National

Procurement

Commission established in terms of Article 156B (1) of the Constitution and shall be as prescribed:

Provided that, -

(i)

if the capacity of the generation plant is below or equal to the threshold value as specified under subsection (3), and the final approval has been granted to generate electricity through renewable energy resources by the Sri Lanka

Sustainable Energy Authority under section 18 of the Sri Lanka Sustainable

Energy Authority Act, No. 35 of 2007;

(ii)

where on the day preceding the date of the coming into operation of this Act an approval of the Cabinet of Ministers has been obtained to develop a new generation plant or to expand the generation capacity of an existing generation plant; or

(iii)

where on the day preceding the appointed date a valid letter of award has been issued by the Ceylon Electricity

Board in accordance with the provisions of the Sri Lanka Electricity Act,

No. 20 of 2009, the National System Operator shall not be required to comply with the provisions of this subsection:

Provided that, the selection of the party to whom approval has been granted or the letter of award has been issued has been selected pursuant to a competitive and transparent procurement process:

Provided further, the requirement to submit a tender shall not be applicable in respect of any new generation plant or to the expansion of any existing generation plant that is being developed to meet any emergency situation as determined by the Cabinet of Ministers during a national calamity or a long term forced outage of a major generation plant, where protracted bid inviting process outweighs the potential benefit or procuring emergency capacity required to be provided by any person at least cost;

(b)

transmission capacity based on the following procedure:-

(i)

The Minister, with the approval of the

Cabinet of Ministers may, inform the

National System Operator to assign certain transmission assets to be built by the

National Transmission Network Service

Provider in the interest of the national economy.

(ii)

The Minister, with the approval of the

Cabinet of Ministers may, assign certain transmission assets to be procured using public private partnership modality. The

National System Operator shall call for proposals for procuring of such transmission assets in a transparent and competitive manner. Specific procedures for such procurement and the formats required therefore shall be prepared in consultation with the National Procurement Commission established in terms of Article 156B (1) of the Constitution and shall be as prescribed.

(iii)

The National System Operator shall issue a letter of award to the selected party.

(2)

The Regulator shall be required, on receipt of any recommendations of the National System Operator, to grant its approval at its earliest convenience, where the Regulator is satisfied that the recommended price for the purchase of electricity or electricity generating capacity is consistent with the requirements of the Long Term Power System

Development Plan and that the terms and conditions of such purchase is within the accepted technical and economical parameters.

(3)

The Minister may on the advice of the Council, by

Order published in the Gazette, specify the maximum capacity of any renewable energy technology-based power plants which may be permitted to enter into standardized power purchase agreements with the National System

Operator:

Provided that, the maximum capacity of such renewable energy plants to be procured from a contiguous location using standard power purchase agreements on cumulative basis shall not exceed 10 MW, which shall be further reduced by an order made by the Minister published in the Gazette, once the regulations prescribing the procedures for competitive procurement of new capacity are in place:

Provided further, any electricity project located within the territory of Sri Lanka and the Sri Lanka Waters which may involve electricity exports shall be undertaken only with the approval of the Cabinet of Ministers.

Read on from s 12

Part V

National Transmission Network Service Provider

Read on from Part V

Part VI

Incorporation of Limited Companies Under the Companies Act…

Read on from Part VI

Part VII

Licensing

Read on from Part VII

Part VIII

Tariffs

Read on from Part VIII

Part IX

Wholesale Electricity Market

Read on from Part IX

Part X

Consumer Protection

Read on from Part X

Part XI

Finance

Read on from Part XI

Part XII

Miscellaneous

Read on from Part XII

Part XIII

General

Read on from Part XIII

Part XIV

Repeals and Transitional Provisions

Read on from Part XIV

Schedules