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Impending power crisis: Delays, red tape, and poor policy implementation to blame?

18 Dec 2021

  • Policy inconsistency and politics pushing back power sector stability: CEBEU
  • No shortfall at present; will explore emergency power purchase as needed: Lokuge
  • 16,000 GWh of new renewable energy needed to reach 70% target by 2030: SLSEA
By Asiri Fernando Poor policy planning, policy inconsistency, mismanagement, and delays in implementing approved power generation projects have snowballed, causing Sri Lanka’s power issues to worsen over the years. Every few years, the Government launches a series of investigations into unexplained electricity outages or introduces scheduled power cuts; citing lack of generation capacity, need for maintenance, and other reasons. This situation persists, despite repeated increases in the cost of electricity over the last 10 years. Sri Lanka will see a 5.7% growth in electricity demand next year (2022) with an estimated peak demand pushing past an estimated 2,900 megawatts (MW) of power, according to the state utility provider Ceylon Electricity Board (CEB). According to the CEB’s Long-Term Generation Expansion Plan for 2022-2041, based on their demand projections, the growth is expected to continue at an average rate of 5.2% in the long run for 20 years. Power plant project failures through the years However, critics point out that delays in implementing several power plant projects over the last few years have placed the national power supply grid in an unstable state, where a surge in demand or drop in generation triggers outages across the island. Speaking to The Sunday Morning, CEB Engineers’ Union (CEBEU) President Saumya Kumarawadu pointed out that policy inconsistency and lack of implementation has aggravated the problem. Power generation plans that the CEB had formulated earlier and the cancellation of a number of power plants which were planned to be operational in the 2020-2023 period has caused the power generation issue to worsen. “There were several power plants which were to be built and become operational over the years, but that did not happen. For example, in 2017 there was a tender floated for a 350 MW power plant and there were seven bids for that tender. However, awarding the tender was delayed due to legal action and was only awarded a few months ago. Even the Sobhadanavi power plant project was delayed,” Kumarawadu explained, adding that had the process been followed properly and the government of the day made decisions on key projects on time, the plant would have been built and operational by this year. He argued that historically, there has been a lack of strategic leadership for power generation, with successive governments dragging their feet regarding implementation of power projects. According to Kumarawadu, the decision to scrap the proposed 500 MW power plant at Sampur, Trincomalee in 2015 is also a deviation from generation plans. The Sampur Power Plant which was to be a joint venture between an Indian company and CEB would have seen a coal-fired thermal power plant that was planned to be completed and contribute to the national grid last year. “Government leaders need to follow the plans they approve and make strategic decisions to expedite power generation projects. But sometimes we see them divided and playing politics with these projects. This needs to stop,” Kumarawadu opined. However, Opposition Samagi Jana Balawegaya (SJB) MP Dr. Harsha de Silva alleged that some of the delays in implementing power generation projects have been due to delaying action by groupings within the CEB, that have been creating bottlenecks for the transition from coal and fuel oil fired power plants to those that use liquefied natural gas (LNG). “We know there are some within the CEB who like the ‘diesel mafia’ and want to sustain emergency power purchase agreements to plug the gap in supply. They have been trying to scuttle LNG and renewable energy projects that were planned,” he stated, adding that the current Government, which has two-thirds power in Parliament, has failed to get LNG power plants built, even after coming into power two years ago. Government confident about upcoming energy solutions Responding to a query by The Sunday Morning, Power Minister Gamini Lokuge denied that there was a power supply shortfall this year, explaining that low demand due to the Covid-19 pandemic and plentiful rains have sustained hydro power (40-45% of the power generation capacity) supply at an optimum. Lokuge acknowledged that long-term delays in building power plants have contributed to the problem, but argued that a new renewable energy target (70% of the supply) for 2030, set by the President, will address future energy needs effectively. “We are expecting the completion and operation of Uma Oya and Broadlands power plants in 2022. Both will add 120 MW and 35 MW respectively to the supply next year, and we will also see several renewable power projects come online,” he said. Nevertheless, Minister Lokuge conceded that the CEB may need to seek short-term emergency power purchases to plug gaps in supply once the rains falter and hydro power generation drops next year. Commenting on the outages that were faced in the last few weeks, Minister Lokuge claimed that ongoing planned maintenance of the Norochcholai Power Plant may have played a contributory role. However, he pointed out that the Ministry and CEB are both investigating the outages and that a final conclusion can only be drawn after the process has ended. The Power Minister indicated that diversifying the power generation capability of the country while expanding capacity to meet growing demand will reduce the impact from disruptions. “We are also exploring the possibility of introducing an excess power storage system for households and businesses that will have rooftop solar to save and use power as needed,” he said, opining that such decentralised systems will likely increase resilience and may help reduce peak time demand. When asked about delays in implementing renewable energy projects, which had generated a lot of enthusiasm among investors, the Minister conceded that the current process can be streamlined, and that the Ministry was establishing a “one-stop shop” to provide necessary services and obtain required clearances for investors keen on renewable projects. “We plan to award nearly 1,000 MW worth of projects to those who have expressed interest by April 2022,” Lokuge told The Sunday Morning. According to the Sri Lanka Sustainable Energy Authority (SLSEA), 16,000 gigawatt hours (GWh) of power generation is required to be fulfilled by new renewable energy projects to meet President Gotabaya Rajapaksa’s ambitious 2030 target of 70% green energy. When Rajapaksa came into power, he had stated that he would not allow any new coal power plants to be built.  ‘Setting the stage for failure’ Responding to a query on whether the delays in building new power plants over the last two decades contributed to the present power-related problems, Energy and Sustainability Expert Dr. Vidhura Ralapanawe told The Sunday Morning that while delays have affected the issue, it is also linked to the broader question regarding the use of fossil fuel-fired power generation. Dr. Ralapanawe stated that, in his opinion, Sri Lanka did not require new fossil fuel-fired power plants. He questioned why the CEB’s planning process continued to push for coal-fired power plants that are unlikely to be built in the 2020 generation plans, adding that such planning was against state policies. He argued that the CEB’s planning methodology was setting the stage for failure. Dr. Ralapanawe opined that trade union action by the CEBEU regarding the Yugadanavi-New Fortress Energy (NFE) plans may delay or stall the implementation of the project. “The Sobadanavi Plant (contracted in 2016) is still in limbo, mired in courts for over five years. And current CEBEU actions on Yugadanavi-NFE will likely delay this project too,” he pointed out. He highlighted bottlenecks at CEB for feed-in-tariffs and resistance towards rooftop solar projects from 2016 as another example where delays are hurting sustainable power supply. Dr. Ralapanawe criticised the lack of enthusiasm by the CEB to contract large scale renewable power in the last few years, pointing out that there were no large scale (MW) projects assigned to renewable energy in the planned timeline as of now. “This is indeed a sad state of affairs, one completely against the global trends,” he said, adding that if Sri Lanka was to look at adding new power generation in the shortest time frame, the fastest power plants that can come online are those of renewable energy.  Commenting on the challenges faced on expanding renewable energy power generation, Dr. Ralapanawe opined that in order to reach the target set, Sri Lanka first needs to clarify the roles of the relevant institutions – the CEB, SLSEA, and the two Ministries. “SLSE’'s recent call for Expressions of Interest (EOI) for projects larger than 50 MW yielded over 600 proposals (over 30 GW) – yet no one knows how these projects are to be contracted, the next steps and roles of SLSEA and CEB,” he explained. The Energy expert highlighted the need to give investors clarity and visibility to the pipeline of projects. Moving forward in 2022, Sri Lanka should create an entity operated by high calibre procurement specialists to handle the procurement process, Dr. Ralapanawe said. “India created the Solar Energy Corporation of India (SECI) which runs tenders and reverse auctions for over 30 GW per annum. It is not difficult to replicate this model and bring the necessary skill to handle contracting,” he explained, adding that the CEB needs to consider how large-scale renewable energy projects will be added to the grid and develop a combined transmission and generation plan with timelines for project completion to ensure future energy targets dictated by national policies are met.


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