CEB successor company breaks into top three in competitive BESS tender

National Transmission Network Service Provider (Pvt) Ltd. (NTNSP), has secured third place in Sri Lanka’s fiercely contested 160 MW/640 MWh Battery Energy Storage System (BESS) tender, beating a number of established private-sector energy players in a major competitive procurement exercise just six months after the restructuring of the Ceylon Electricity Board (CEB).

The result marks a significant early indication that a newly restructured CEB successor company can compete on a commercial footing with established players in the rapidly expanding energy market, Senior Engineer Pubudhu Niroshan told The Island Financial Review.

More significantly, Niroshan said NTNSP’s entry into the tender helped intensify competition and contributed to a roughly 10% reduction in the lowest bid compared with the previous 160 MW/640 MWh BESS procurement, potentially delivering a more favourable outcome for electricity consumers.

“Entering such a highly competitive bidding process within just six months of restructuring and emerging third is by no means an easy task, Niroshan said.

He said the achievement had to be viewed in the context of the calibre and number of competitors involved in the process, adding that NTNSP had demonstrated that a successor company emerging from the CEB restructuring could step into a competitive commercial environment and hold its own against established businesses.

The significance of NTNSP’s participation, however, extended beyond its third-place ranking.

According to Niroshan, the company’s decision to enter the BESS procurement created an additional layer of competition, forcing other bidders to sharpen their commercial offers.

‘The first and second-ranked bidders had NTNSP as another competitor. That itself created additional competitive pressure, he said.

The BESS procurement involved a total capacity of 160 MW/640 MWh, with the programme divided into individual projects.

The procurement was designed to bring private and other eligible project proponents into the development and operation of battery storage facilities, providing an important mechanism for integrating renewable energy and strengthening the electricity system.

The outcome, he said, was particularly important for electricity consumers because greater competition in procurement could ultimately translate into lower costs for the power system.

‘Once you have several serious players competing, offering a fair and competitive price becomes essential. That is ultimately good for the consumer, he said.

Niroshan also referred to concerns previously raised by NTNSP before the Public Utilities Commission of Sri Lanka (PUCSL) regarding prices submitted for BESS projects under the Feed-in Tariff (FiT) mechanism.

He said subsequent market developments had provided support for the view that some of the prices submitted under the FiT mechanism were comparatively high.

For Niroshan, the experience also demonstrated why competition must remain at the heart of the restructuring of the electricity sector.