Analysis Ceylon Electricity Board

Executive Summary

The Objective of this report is to practise the analysis of possible scales and scopes of an engineering organization and to recommend and suggest ways to utilize them fully. The organization chosen for the analysis Ceylon Electricity Board (referred to as CEB hereafter), which is the Sri Lankan government organization for generation, transmission and distribution of electricity for local industrial and domestic consumption. Following a general introduction to the services by the organization and the structure of it and market competencies, the economies of scale and scope are discussed and finally a few suggestions are made to utilize them for the improvement of the organization.

1. Introduction to the Organization

Ceylon Electricity Board (CEB) is the government body of Sri Lanka for generation, transmission and distribution of electricity for the local industrial and domestic consumption. Most of the electric power related needs and demands of the nations are fulfilled by CEB, and it has vast coverage of service in all over the country, cities, villages and industries. The organization is mainly an engineering organization and its product is service type. The service and the aim of the organization are obvious from the vision and mission statements of the organization.

Vision statement:

“To provide high quality service to all its consumers”

Mission statement:

“To provide reliable quality electrical power to the entire nation at internationally competitive prices effectively and efficiently through a meaningful partnership with skilled and motivated employees using appropriate state-of-the-art technology for the socio-economic development of the country in an economically sustainable manner while meeting acceptable environment standards and a satisfactory rate of return on investments”

Ceylon Electricity Board was formed under act of No of 17 of 1969.

The structure of CEB is highly dependent on the government and its decisions passed. Government intervention is at a higher degree that although the highest officials such as the Chief Executive Officer make suggestions on the management of power systems, they have to be approved by the government to be implemented. CEB is distributed throughout the whole island for better interaction with consumers and monitoring of field. The branches are divided into provincial and are offices.

The performance in planning and implementation of CEB still has chances to be improved. The electrification of total Sri Lanka population is only 55% and the rest (45% of population) are in darkness. It seems to be quite unsuccessful and unfair sometimes when considering rural off-grid villages. On other hand, the consumption of electricity presently requires a higher cost compared to the rest of the world, due to inefficiency in planning, management, performance, design of power systems and implementation. Also CEB suffers from losses in transmission and distribution.

2. The Local Electricity Demand and the Cost of Production

The demand for electricity as power source is for industrial and domestic purposes. Since Sri Lanka is not an industrialized country, the peak power demand occurs in between 7 p.m. to 10 p.m. That is, the electricity mainly used for lighting purpose in the domestic sector. Annual demand for the power energy in Sri Lanka approaches 7200 GWh. The demand is increasing 8% annually. The 55% of total population gain electricity. The others are not consuming due to poverty or difficulties in transmission power to remote areas. Electricity tariff is much higher compared to the other countries. However, people can’t buy the electricity from another organization. Monopoly market is there for the selling of electricity. In future, CEB has to implement power distribution to the whole island at a low price. As the demand is always increasing annually, the power distribution is not adequate. It is evident that the power distribution is not so reliable and power failures have often occurred in the recent past. Also since the main mean of generation of electricity is hydro-electric plants, the whole country needs to be depended on the weather for electricity. The electricity is required by the consumers at highly reliable service and a low cost.

The costs vary according to the usage of energy sources. Current energy sources utilized are: Hydro power, Thermal power and some other renewable sources such as Wind power, Solar power, Dendro