A crisis in the power sector threatens to place the country in darkness in the event of failure to resolve the issue soon.

Sri Lanka is in urgent need of approximately 300 megawatts (MW) of electricity to meet current consumer demand, and failure to meet this demand could likely plunge parts of the country into darkness between the years 2020-2030.

Minister of Power and Renewable Energy Ravi Karunanayake sought Cabinet approval to obtain emergency power purchasing proposals.

The ministry confirmed that Cabinet approval was granted, but that the President instructed the minister to reconsider the move as it could prove expensive. He was instead advised to consider other ways of mitigating the issue.

Ministry sources said that Minister Karunanayake and the Ceylon Electricity Board (CEB) Engineers’ Union were holding talks to reach a solution to the crisis before looking at purchasing emergency power.

However, sources said that the ministry was unable to make a concrete decision as the CEB was running without a board of directors.

The proposal seeking the approval of the Cabinet to purchase emergency power was submitted by Minister Ravi Karunanayake on 14 January, 2019.

The main objective of the proposal was to procure 100 MW power generators on a lease basis for a period of one year and to call tenders for 75 MW of thermal power for a period of two years, according to the Ministry of Power and Renewable Energy Director (Development) Sulakshana Jayawardena.

He told The Sunday Morning that Cabinet approval was already granted for the proposal.

“This year, the authorities forecast that there will be a dry period from January to April, and therefore, there would be restrictions on hydro power generation. To mitigate that, the CEB has recommended adding 100 MW on a supplementary basis,” he explained.

“We are going to call for tenders and the price per unit will be decided later,” Jayawardena noted.

Growing concern

Meanwhile, Minister Karunanayake’s decision to purchase emergency power from private companies raised concerns among energy experts, as they say that it would negatively impact the CEB due to potential losses that may be incurred by the board, as a result of emergency power purchasing agreements.

They stressed that it was now time for the Government to put politics aside and seriously consider the Long Term Generation Expansion Plan 2018-2037 prepared by the Ceylon Electricity Board (CEB) and approved by the Public Utilities Commission of Sri Lanka (PUCSL).

This plan was drawn up to safeguard the country against the crippling effects of temporarily expensive decisions taken by the authorities.

According to CEB Engineers’ Union President Athula Wanniarachchi, use of emergency power was expensive as the generators that would be utilised would run on diesel, for which the capacity charge would be around Rs. 5 per unit, which would have to be covered for the entire period agreed upon, even if the generators are unused. As a result, the CEB would have to spend a huge sum of money for the emergency purchases.

“For example, if a litre of diesel costs Rs. 100 and we can produce only four units with it, the fuel cost per unit would translate to Rs. 25. In addition, we would need to pay the capital cost. Therefore, all together, the cost of a unit would be around Rs. 30,” Eng. Wanniarachchi stressed.

Highlighting the situation of thermal power generation, he stressed: “Machines also need timely maintenance, for which they need to be stopped. However, since we don’t have enough machines, we are unable to stop them for routine maintenance.

“The country needs an additional 300 MW to operate the machines comfortably without any interruption and without the risk of power cuts,” Eng. Wanniarachchi noted.

Continuous delays

According to CEB statistics, around 70% of the energy requirement of the country is currently provided through thermal power (coal and oil) and the rest is provided through hydro power, with a very small amount of power generated by wind power.

Due to the lack of proper power plants, the country’s entire electricity system is dependent on the Norochcholai Power Plant.

The union stated that if that power plant experienced a breakdown, the situation would take a turn for the worst.

“During last year’s dry season, the Norochcholai Power Plant operated well and didn’t cause any big issues. As of now, the condition of the plant is better. But even now, one machine’s operations are halted for routine maintenance,” he added.

According to the CEB’s plan, three power plants (70 MW, 100 MW, and 150MW) were proposed to meet the demand from 2018 until major power plants are implemented.

Even though the plan was scheduled to be implemented from 2018, the CEB is behind the scheduled plan so far. The CEB Engineers’ Union puts the blame on the PUCSL as they claimed it was the PUCSL which delayed its approval and as a result, the implementation was not executed by the board as expected.

Explaining the situation, Wanniarachchi said: “The CEB’s generation plan was not approved on time by the PUCSL. There are many delays in implementation. They approved it after taking one-and-a-half years to review it – that is the base of the issue.”

Below are additional reasons for the energy crisis, cited by the CEB Eng. Union:

•No steps were taken to set up a large thermal power station after commissioning Stage III of the Norochcholai Power Plant in 2014

•The state of the already tendered 300 MW LNG Power Plant in Kerawalapitiya was pending in court

•No medium-term decision in the form of a solution was taken regarding the planned 100 MW Diesel Power Plant

Eng. Wanniarachchi stressed that thermal power, either coal or LNG, would be less costly than diesel power, and as successive governments failed to push towards that, there’s a deficit of about 300 MW of power at present.

Commenting on the proposed Kerawalapitiya LNG Power Plant, he said: “The blame should be placed on the Government as they handled it poorly. We were planning to tender for a medium-term solution until we procure the big power plants, some diesel power plants, or the 100 MW power plants.

“Those power plants will also be cheaper than emergency power,” he said, adding that those tenders were also discussed without any end in sight, as the Ceylon Petroleum Corporation (CPC) continuously requests changes.

“We’re unhappy that no steps have been taken with a long-term goal in mind, even though they speak of long-term solutions annually, revisiting the topic at the beginning of every year. As such, we are very dissatisfied as a union.

Explaining how most politicians prefer to play the blame game, Wanniarachchi went on to state that the execution of a viable low-cost solution for the country would require at least five to six years of planning, which no one is willing to take responsibility for.

Running out of time

Justifying the Ministry’s decision to opt for emergency power purchasing, the Ministry’s Director (Development) Jayawardena said: “Now as per the CEB’s plan, some of the plants won’t be developed. However, the growth in annual demand is approximately 5-6%, and it depends on weather conditions, other developments, and construction.”

“They have forecast a dry period, as usual, from January to end-April. In terms of capacity, there will be restrictions on hydro generation and we will not be able to generate hydro power as planned.

“In order to mitigate these sorts of issues, the CEB recommended adding 100 MW of short-term power capacity to meet demand during the period, which resulted in adding it on a supplementary basis.

“We are going to call for tenders, and depending on the result and the outcome of the tenders the Minister is to decide on whether or not to continue these sorts of ad-hoc measures to meet demand,” he added.

When asked whether the CEB was far behind the schedule in the generation plan, Jayawardena stressed that there were certain issues and barriers but that the CEB has planned to have a 300 MW power plant by 2019 and another LNG power plant by 2029.

“Last year, there was a battle between the CEB and PUCSL on getting approval for the long-term power generation plan. Now that it’s approved, they need to overcome their differences and work towards achieving the target, along with all power sector stakeholders,” he explained.

Elaborating on the process of purchasing emergency power, Director Jayawardene said: “Last year, there was an issue with extending the terms of private companies, and after much debate, the Cabinet approved the extension of the term of ACE Power Embiliptiya for a period of three years after considering the electricity requirements in the Southern Province, and is scheduled to expire in 2020. However, the terms of ACE Power Matara and Asia Power Sapugaskanda were not extended; they are still in the system but can’t add to supply as their terms are over.

“Therefore, the CEB needs to call fresh tenders, and after negotiations, the price of a unit would be decided. Usually, the prices vary, but the capacity charges will have to be incurred even if we didn’t run the plan.” He also added that while it’s in use, fuel charges would have to be incurred.

Meanwhile, the PUCSL said the CEB could purchase emergency power only in case of a calamity and that the Cabinet is required to make that decision, and not the PUCSL, further stating that in all other instances, the commission’s approval was necessary.

On inquiry of whether they were aware of the recent cabinet proposal, the commission’s Director Corporate Communications Jayanat Herath said that they were unaware of such a decision.

“The issues between the PUCSL and CEB are over and we approved the CEB’s Long Term Generation Plan last year,” he said.

Last week, Minister Karunanayake sought Canadian and French assistance to find solutions to the expected energy crisis the world, including Sri Lanka, will face in 2020. Ceylon Electricity Board Employees’ Union (CEBEU) Convener Ranjan Jayalal stressed that issues of the CEB were getting worse and that there was no solution for it.

“Everyone is running a business and they want to earn commissions. Nobody thinks about the public. The majority of high profile employees are corrupt and those who reveal the corruption will ultimately lose their jobs,” he said.

Jayalal also alleged that there was a hidden plan to separate the generation division from the CEB and to give it to the private sector, thereby burdening the general public with higher costs.

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