2015 Towards a Future with Sustainable, Affordable, Greener Energy . CEYLON ELECTRICITY BOARD ANNUAL REPORT | 2015 Contents Highlights of the year 4 Corporate Information 7 Organization Chart 10 Chairman’s Review 14 General Manager’s Review 16 Operational Review 20 Generation Division 21 Transmission Division 33 Distribution Divisions 45 Projects Division 57 Asset Management Division 65 Corporate Strategy Division 71 Finance Division 82 Financial Review 84 Report of the Directors 86 Consolidated Income Statement 89 Consolidated Statement of Comprehensive Income 90 Statement of Financial Position 91 Statement of Changes in Equity-Group 92 Statement of Changes in Equity-The Board 96 Consolidated Statement of Cash Flows 98 Notes to the Financial Statement 99 Auditor General’s Report 156 Replies to the Report of the Auditor General 166 OUR Enrich Life through Power VISION To develop and maintain an ecient, coordinated and economical system of electricity OUR supply to the whole of Sri Lanka, MISSION while adhering to our core values: ∞ Quality ∞ Service to the nation OUR ∞ Eciency and eectiveness CORE ∞ Commitment ∞ Safety VALUES ∞ Professionalism ∞ Sustainability ANNUAL REPORT | 2015 OUR ENVIRONMENTAL POLICY OUR Enrich Life through Power VISION To develop and maintain an ecient, coordinated and economical system of electricity OUR supply to the whole of Sri Lanka, MISSION while adhering to our core values: ∞ Quality ∞ Service to the nation OUR ∞ Eciency and eectiveness CORE ∞ Commitment ∞ Safety VALUES ∞ Professionalism CEB will manage all its business activities in a manner, which ∞ Sustainability cares for the natural and manmade environment and contribute to sustainable development. By means of openness in dealing with environmental issues, we intend to create confidence in our activities on the part of the public, customers, authorities, employees, and owners. We will actively pursue a policy of incorporating and integrating environmental considerations into our activities. 3 CEYLON ELECTRICITY BOARD ANNUAL REPORT | 2015 HIGHLIGHTS OF THE YEAR Introduction of Time of day Tari for The number of new electricity connections provided Domestic Consumers during the year was 230,600 indicating in an average addition of 19,217 new customers per month. Electricity Taris based on Time of Use for Domestic consumers who are connected with Electricity Sales 3-phase/30 A & above is implemented with eect from 15th September 2015. Electricity Sales Electrification of Households 14,000 11,786 12,000 11,063 10,474 10,621 By the end of the year, 98.5% of the households 10,023 10,000 9,268 in the country had been provided with electricity. 8,441 The average per capita electricity consumption 8,000 GWh which was at 535 units (kWh/person) at the 6,000 beginning of the year had reached 562 units by 4,000 the end of the year recording an increase of 27 2,000 units. 0 2009 2010 2011 2012 2013 2014 2015 System Energy Losses The system energy losses which have been gradually The total electricity sales (including Sales to LECO) decreasing since 2000 stood at 10.4% by the end of during the year increased from 11,063 GWh in the the year. preceding year to 11,786 GWh resulting in a rate of increase of 6.5%. The average daily consumption of System Energy Losses electricity in the year was 32.3 GWh as against 30.3 25 GWh in the previous year. 21.35 19.69 19.2 20 18.44 17.11 17.27 16.58 15.67 Sales by Tari - 2015 14.99 14.59 15 12.97 11.72 11.24 11.14 10.91 10.40 LECO 10 Street 12% Percentage Lighting Domestic + 1% 5 Religious Government 33% 1% 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Industrial Consumer Growth 31% General Purpose The total number of consumers stood at 5,648,130 Hotel 20% by the end of the year indicating an annual growth 2% rate of 4.3%. The numbers of consumers coming under dierent types of categories are given below: The highest energy consumption was by the consumers in the category ‘Domestic and Religious Number of Number of Purpose’ accounting for about 33.5% of the total Category Customers as Customers as consumption. This was followed by the industrial at 31/12/2014 at 31/12/2015 sector which accounted for 30.6% of the total Domestic 4,768,229 4,966,395 consumption. The electricity consumption by Religious 33,175 34,710 consumers in the general purpose category was however only 19.7% of the total consumption General Purpose 559,401 588,063 indicating an annual growth of 5.9%. Industrial 54,577 56,681 Hotel 462 489 Revenue Government 1,686 1,792 The total annual revenue from electricity sales which stood at Rs. 202,645 million in 2014 decreased to Total 5,417,530 5,648,130 Rs.188,684 million during the year 2015. This was a 4 CEYLON ELECTRICITY BOARD ANNUAL REPORT | 2015 HIGHLIGHTS OF THE YEAR Contd... decreased of 6.9% compared to last year mainly due Gross Energy Generation to reduction in tari made in the latter part in of 2014. Gross Energy Generation Revenue by Tari - 2015 14,000 13,154 LECO 12,423 11,801 11,962 Government 12% 11,528 Domestic + 12,000 10,714 1% 9,882 Religious 10,000 27% 8,000 GWh 6,000 Industrial 4,000 28% 2,000 General Purpose 0 30% 2009 2010 2011 2012 2013 2014 2015 Hotel 2% By the end of the year, the total gross electricity generation had increased by 5.9%, i.e. from 12,423 GWh in 2014 to 13,154 GWh in 2015. Revenue from Electricity Sales 250,000 Electricity Generation Sources 202,645 194,147 200,000 188,684 Due to high water levels of the reservoirs during 163,513 the year, the hydro power plants including mini 150,000 132,460 121,862 110,518 hydro plants could contribute only 46% to the total 100,000 power generation in the year. This was a increase Rs. Million of 31.6% from what they contributed in the year 50,000 2014. 0 2009 2010 2011 2012 2013 2014 2015 Electricity Generation Sources - 2014 Others 0.35% The highest revenue was from the general purpose Mini Hydro (IPP) 7% customers followed by industrial purpose customers. Wind The contribution to the total revenue from the 2% customers coming under the category ‘Domestic IPP Oil Major Hydro Sector with Religious Purpose’ was 26.7%. 21% (CEB) 30% Total Energy Storage CEB Oil At the beginning of the year, the total hydro 13.65% Coal storage stood at 1181 GWh and this was 93.8% 26% of the total storage as compared to 52.4% in the preceding year. The inflow during the first five Electricity Generation Sources - 2015 months was considerable compared to year 2014. Others Hydro storage gradually deceased to 881.9 GWh 0.5% Mini Hydro (IPP) Wind 8% on 11th May and reservoirs recorded the lowest 2.5% storage of 559 GWh on 2015-09-03. During the final quarter of the year there was very high inflow IPP Oil 9% to reservoirs. End of year storage was 1093 GWh. Major Hydro (CEB) 38% CEB Oil 8% Coal 34% 5 CEYLON ELECTRICITY BOARD ANNUAL REPORT | 2015 HIGHLIGHTS OF THE YEAR Contd... The thermal power stations contributed 51% to the total net generated power in 2015 as against 61% in the preceding year. Electricity Generation by Ownership It is noted that the Independent Power Producers (Mini hydro and Thermal) has generated electricity 20% of the annual total generation in the year 2015 as against 31% in the preceding year (2014). Electricity Generation by Ownership CEB IPP 90% 80% 80% 73% 69% 70% 60% 57% 51% 49% 50% 43% 40% 31% Percentage (%) 30% 27% 20% 20% 10% 0% 2011 2012 2013 2014 2015 Maximum Demand 2,500 2,283 2,163 2,146 2,164 2,152 1,955 2,000 1,868 1,500 MW 1,000 500 0 2009 2010 2011 2012 2013 2014 2015 Maximum Demand The Maximum Demand reached 2,283.4 MW in the year 2015 which was a 131.7 MW or a 6.1% increase from 2,151.7 MW in the year 2014. 6 CEYLON ELECTRICITY BOARD ANNUAL REPORT | 2015 CORPORATE INFORMATION Legal Form The Ceylon Electricity Board (CEB) is a body corporate established in Sri Lanka by the Act of Parliament No. 17 of 1969 amended by Act Nos. 31 of 1969, 29 of 1979, 32 of 1988 and 20 of 2009. Members of the Board Chairman Mr. W. D. A. S. Wijayapala (from January 20, 2015) Mr. W. B. Ganegala (up to January 13,2015) Vice Chairman Mr. W. A. G. Wanasekera (from October 30, 2015) Mr. B. N. I. F. A. Wickramasuriya (from January 20, 2015 to October 29, 2015) Prof. K. K. C. K. Perera (up to January 09, 2015) Member / Working Director Mr. W. R. G. S. Bandara (from November 12, 2015) Mr. N. K. G. Gunatileke (from January 23, 2015 to October 29, 2015) Mr. K . I. D. P. Kularatne (up to January 12, 2015) Member representing the General Treasury Mr. R. Semasighe (from January 23, 2015) Ms. M .T .I. V. Amarasekera (up to January 23, 2015) Members Ms. J. Kariyawasam (from January 23, 2015) Mr. T. M. K. B. Tennakoon (from October 30, 2015) Mr. S. D. A. B. Boralessa (from November 16, 2015) Mr. N. K. G. Gunatileke (from January 23, 2015 to October 29, 2015) Mr. T. D. S. P. Perera (Up to January 23, 2015 and from February 9, 2015 to October 14, 2015) Mr.