By Maheesha Mudugamuwa
Minister of Power and Renewable Energy Ravi Karunanayake decided to purchase yet another 500 megawatts (MW) of barge-mounted emergency power to meet the expected demand for electricity in 2020 while the controversial proposal to procure 400 MW of supplementary power from a Turkish company is yet to be finalised.
Speaking to The Sunday Morning, Power and Renewable Energy Ministry Director – Development Sulakshana Jayawardena said the Ministry had decided to seek open tenders to procure another 500 MW of emergency power for 30 months until the commissioning of a 300 MW LNG (liquid natural gas) power plant in Kerawalapitiya.
Accordingly, a Technical Evaluation Committee (TEC) comprising Ceylon Electricity Board (CEB) engineers and ministry officials has been appointed and the normal tender process would be followed for the purchase of 500 MW of emergency power for next year, Jayawardena said.
He elaborated that the 400 MW of supplementary power from the Turkish company would be purchased only for a short period of time, and later, the 500 MW of barged-mounted power would be added to the grid.
Two 200 MW Turkish powerships are expected to be stationed at Galle and Kerawalapitiya for six and nine months, respectively, said Jayawardena, adding that the 500 MW of barged power will be procured for next year for a period of 30 months.
Earlier, the Sri Lanka Ports Authority (SLPA) had stated that there was no space to berth the powership at the Galle Harbour, but later had agreed to provide the facilities there. Initially, it was also planned to station the other powership at Kerawalapitiya as the required facilities to transmit power from the ship to a grid substation were available, Jayawardena said.
However, Karunanayake’s decision to purchase long-term, barge-mounted emergency power was criticised by some energy experts.
According to Eng. Charuka Karunaratne of the Dushana Widu Nethin organisation, there was no need to purchase emergency power.
He said the CEB would need to pay freight charges and other charges for the barge-mounted emergency power as the ships would be stationed at a port for a long period of time.
“The maintenance cost will also have to be incurred by the CEB,” he stated. “Even if the barge-mounted power is purchased, there aren’t enough transmission facilities available,” he stressed.
However, claiming that there was no actual power shortage, Karunaratne claimed that the shortage was only a myth.
Rain not enough
Now it is reported that heavy rains were received by hydropower reservoirs which means that hydropower generation can be increased. If we go for long-term emergency power purchases, the CEB would have to pay the companies even if it did not need emergency power at all, he explained.
Meanwhile, CEB Engineers’ Union (CEBEU) President Saumya Kumarawadu told The Sunday Morning that the rain was not enough for hydropower generation and this year marked the lowest rainfall in a monsoon period during the last five years.
The water capacity of the reservoirs was still at around 22%.
However, as highlighted by Jayawardena, the Public Utilities Commission of Sri Lanka (PUCSL) should approve the emergency power purchase proposals and once the procurement process is done, Cabinet approval should also be sought.
Experts not happy
Meanwhile, Karunanayake’s decision to purchase emergency power from private companies raised concerns among energy experts as they say that it would have a negative impact on the CEB due to the possible losses that would be incurred by it due to the emergency power purchase 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 CEB and approved by the PUCSL, to ensure the country doesn’t have to endure the crippling effects of temporary, expensive decisions taken by the authorities.
As highlighted by The Sunday Morning last week, according to the Mid-Year Fiscal Position Report – 2019 of the Ministry of Finance, the CEB, as at the end of the first four months of this year, had incurred an operating loss of Rs. 23,114 million, compared to Rs. 17,535 million in the same time in 2018.
According to the report, the cost per unit increased to Rs. 22.05 per KWh in the first four months of 2019, over Rs. 20.46 per KWh recorded in 2018, and the total outstanding obligations to the banks of the CEB increased to Rs. 80,218 million, compared to Rs. 54,365 million in 2018. Further, the total outstanding obligations to Ceylon Petroleum Corporation (CPC) and Independent Power Producers (IPP) increased to Rs. 103,191 million as at end-April 2019 from Rs. 85,304 million at the same time in 2018.
Therefore, power experts claimed the CEB would have to incur huge losses due to the purchase of emergency power in the future as well. Since 2016, the total number of emergency power purchases increased as shown in the Emergency Power Purchasing graph.
Accordingly, in 2016, the CEB purchased a total of 155 MW and in 2017, 180 MW of emergency power. In 2018 and 2019 so far, the CEB purchased 320 MW and 720 MW of emergency power, respectively.
In addition, losses incurred by the CEB also increased. In 2015, the CEB had gained a net profit of Rs. 20.3 billion and in 2016, the CEB incurred a loss of Rs. 13 billion. In 2017, 2018, and 2019, the losses incurred by the CEB were Rs. 21 billion, Rs. 50 billion, and Rs. 100 billion, respectively.
According to CEB statistics, around 70% of the energy requirement of the country is currently provided by thermal power (coal and oil), and the rest by hydropower with a very small amount of power generated by wind.
According to the CEB’s plan, three power plants (70 MW, 100 MW, and 150 MW) 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, so far, the CEB is behind the scheduled plan and the CEB engineers put the blame on the PUCSL as they said it was the Commission that delayed its approval and as a result, the CEB couldn’t implement the plan as expected.
The CEBEU cited some other reasons for the energy crisis, included below:
Minister of Power and Renewable Energy Ravi Karunanayake decided to purchase yet another 500 megawatts (MW) of barge-mounted emergency power to meet the expected demand for electricity in 2020 while the controversial proposal to procure 400 MW of supplementary power from a Turkish company is yet to be finalised.
Speaking to The Sunday Morning, Power and Renewable Energy Ministry Director – Development Sulakshana Jayawardena said the Ministry had decided to seek open tenders to procure another 500 MW of emergency power for 30 months until the commissioning of a 300 MW LNG (liquid natural gas) power plant in Kerawalapitiya.
Accordingly, a Technical Evaluation Committee (TEC) comprising Ceylon Electricity Board (CEB) engineers and ministry officials has been appointed and the normal tender process would be followed for the purchase of 500 MW of emergency power for next year, Jayawardena said.
He elaborated that the 400 MW of supplementary power from the Turkish company would be purchased only for a short period of time, and later, the 500 MW of barged-mounted power would be added to the grid.
Two 200 MW Turkish powerships are expected to be stationed at Galle and Kerawalapitiya for six and nine months, respectively, said Jayawardena, adding that the 500 MW of barged power will be procured for next year for a period of 30 months.
Earlier, the Sri Lanka Ports Authority (SLPA) had stated that there was no space to berth the powership at the Galle Harbour, but later had agreed to provide the facilities there. Initially, it was also planned to station the other powership at Kerawalapitiya as the required facilities to transmit power from the ship to a grid substation were available, Jayawardena said.
However, Karunanayake’s decision to purchase long-term, barge-mounted emergency power was criticised by some energy experts.
According to Eng. Charuka Karunaratne of the Dushana Widu Nethin organisation, there was no need to purchase emergency power.
He said the CEB would need to pay freight charges and other charges for the barge-mounted emergency power as the ships would be stationed at a port for a long period of time.
“The maintenance cost will also have to be incurred by the CEB,” he stated. “Even if the barge-mounted power is purchased, there aren’t enough transmission facilities available,” he stressed.
However, claiming that there was no actual power shortage, Karunaratne claimed that the shortage was only a myth.
Rain not enough
Now it is reported that heavy rains were received by hydropower reservoirs which means that hydropower generation can be increased. If we go for long-term emergency power purchases, the CEB would have to pay the companies even if it did not need emergency power at all, he explained.
Meanwhile, CEB Engineers’ Union (CEBEU) President Saumya Kumarawadu told The Sunday Morning that the rain was not enough for hydropower generation and this year marked the lowest rainfall in a monsoon period during the last five years.
The water capacity of the reservoirs was still at around 22%.
However, as highlighted by Jayawardena, the Public Utilities Commission of Sri Lanka (PUCSL) should approve the emergency power purchase proposals and once the procurement process is done, Cabinet approval should also be sought.
Experts not happy
Meanwhile, Karunanayake’s decision to purchase emergency power from private companies raised concerns among energy experts as they say that it would have a negative impact on the CEB due to the possible losses that would be incurred by it due to the emergency power purchase 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 CEB and approved by the PUCSL, to ensure the country doesn’t have to endure the crippling effects of temporary, expensive decisions taken by the authorities.
As highlighted by The Sunday Morning last week, according to the Mid-Year Fiscal Position Report – 2019 of the Ministry of Finance, the CEB, as at the end of the first four months of this year, had incurred an operating loss of Rs. 23,114 million, compared to Rs. 17,535 million in the same time in 2018.
According to the report, the cost per unit increased to Rs. 22.05 per KWh in the first four months of 2019, over Rs. 20.46 per KWh recorded in 2018, and the total outstanding obligations to the banks of the CEB increased to Rs. 80,218 million, compared to Rs. 54,365 million in 2018. Further, the total outstanding obligations to Ceylon Petroleum Corporation (CPC) and Independent Power Producers (IPP) increased to Rs. 103,191 million as at end-April 2019 from Rs. 85,304 million at the same time in 2018.
Therefore, power experts claimed the CEB would have to incur huge losses due to the purchase of emergency power in the future as well. Since 2016, the total number of emergency power purchases increased as shown in the Emergency Power Purchasing graph.
Accordingly, in 2016, the CEB purchased a total of 155 MW and in 2017, 180 MW of emergency power. In 2018 and 2019 so far, the CEB purchased 320 MW and 720 MW of emergency power, respectively.
In addition, losses incurred by the CEB also increased. In 2015, the CEB had gained a net profit of Rs. 20.3 billion and in 2016, the CEB incurred a loss of Rs. 13 billion. In 2017, 2018, and 2019, the losses incurred by the CEB were Rs. 21 billion, Rs. 50 billion, and Rs. 100 billion, respectively.
According to CEB statistics, around 70% of the energy requirement of the country is currently provided by thermal power (coal and oil), and the rest by hydropower with a very small amount of power generated by wind.
According to the CEB’s plan, three power plants (70 MW, 100 MW, and 150 MW) 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, so far, the CEB is behind the scheduled plan and the CEB engineers put the blame on the PUCSL as they said it was the Commission that delayed its approval and as a result, the CEB couldn’t implement the plan as expected.
The CEBEU cited some other reasons for the energy crisis, included below:
- No steps have been taken to put up a large thermal power station after commissioning Stage III of the Norochcholai Power Station in 2014
- The already-tendered 300 MW LNG power plant project in Kerawalapitiya was pending in courts
- No decision was taken regarding the planned 100 MW diesel power plant as a medium-term solution