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Still 200 MW short

20 May 2019

By Maheesha Mudugamuwa The Ceylon Electricity Board (CEB) has warned that power cuts will be inevitable if the shortfall of 200 MW of power to the national grid is not met. CEB engineers said that in January, the shortfall was around 300 MW. But last month, the Government purchased 170 MW, bringing an end to a power crisis which affected the country at the time. However, CEB engineers last week said there was still a deficiency of 200 MW and if the deficiency was not met soon, the CEB would be forced to re-impose power cuts as the water levels of hydropower reservoirs were reducing drastically at present. To avoid further power cuts, at the end of last month, Minister of Power and Energy Ravi Karunanayake submitted a proposal to award a Turkish company a tender to provide electricity from two power ships to be anchored in the Galle Harbour and in Kerawalapitiya, claiming that it was unlikely the CEB could generate electricity sufficiently as required to meet the deficiency in a short period of time. The proposal was submitted by the Turkish company Karadeniz Holding, which reportedly responded to the CEB’s call for an expression of interest (EoI) for alternate power generation solutions due to the prevailing power crisis in Sri Lanka. However, the Minister’s proposal was knocked back by the Technical Evaluation Committee (TEC) of the CEB, claiming that it was not feasible, while CEB’s tender board has also rejected the proposal. Even though the CEB has received around 20 other proposals, the Turkish one was the only proposal that could be implemented within a short period of time, as Karunanayake said. However, at present, the board is evaluating the other proposals received from several local and foreign companies. According to Ministry of Power and Energy Director – Development Sulakshana Jayawardena, the Ministry had received 21 proposals as EoIs. However, those proposals were for long-term generation and several others were for nine to 12 months. In a situation where the CEB seems to opt for the option of purchasing supplementary power at higher rates, although the engineers warned that the board would have to re-impose power cuts, the Public Utilities Commission of Sri Lanka (PUCSL) alleged that the delay of the construction of the power plants mentioned in the already approved least-cost generation plant had resulted in the current power crisis in the country. PUCSL Director – Corporate Communication Jayanath Herath said: “Since 2016, we have been warning the CEB and directed them to build a plant under the least-cost generation plan. But the main problem was delaying the construction of plants, which could have been constructed by now. If they started the construction of the 300 MW power plant in Kerawalapitiya last January, the plant would be in operation at present. Similarly, if they have started the construction of the 120 MW thermal power plant in Galle, it could have started its commercial operation by 2017.” No data As the PUCSL explained, the CEB had not provided the requested data regarding the generation capacity. “We have requested data from the CEB many times before with the last time being in March, but to date, we have not been provided required data. Without such vital data, we simply cannot make a decision regarding the shortage,” Herath stressed. “Early January, the CEB announced that the shortage was of only 100 MW. In February, they said we didn’t need even that 100 MW. Then in mid-March, all of sudden, the power interruptions began and the CEB requested 100 MW later that month,” he added. As the PUCSL claimed, the shortage should have been forecasted by the CEB in advance. “In case of a breakdown of a mega plant such as Norochcholai, we can expect the sudden shortages, but the crisis we faced in March was different. We should have prepared and mitigated the situation,” Herath noted. Shortage or not? When evaluating the available information, it seems the CEB is more interested in purchasing supplementary or emergency power, rather than looking at inexpensive sources already available. The PUCSL alleged that the CEB had neglected the available options and instead was looking at emergency purchases. Recommending the CEB to utilise the government sector generators to meet the shortage, the PUCSL said that the government sector organisation has more than 200 MW generators. If there is a 170 MW shortage, the CEB should look at the already installed and available generators. The PUCSL stated that it was just a matter of getting these generators synchronised to the national grid and utilising them. Commenting on the practice of purchasing emergency power, Herath said: “This is not an implementation they have begun just this year. Since 2016, we have studied how much of power has been purchased based on emergency or supplementary purchasing. In 2016, the CEB purchased 155 MW, followed by 170 MW in 2017 and 270 MW in 2018.” The cost of the emergency purchase would have to be incurred by the general public as the electricity consumers as well as the Treasury, he stressed. Unbearable burden According to statistics, it is reported that the CEB incurred a loss of Rs. 1,000 billion, he said, explaining: “While we have been delaying a least-cost generation plant which can generate power at a rate of Rs. 18, we are purchasing at a rate of Rs. 30. This has continued for the last four years. Not a single plant has been constructed. “During the last five years, we have been talking about tendering and purchasing power based on emergency. Also, we have observed that in the case of emergency purchasing, they have been very efficient and procured those proposals within a day or two. But when it comes to the least-cost power plant, competitive bidding processes would be delayed for years. We have clearly indicated this situation. We have predicted, warned, and asked to get a remedial action – long, mid, and short-term action,” Herath further explained. In addition, as claimed by the solar power generators, they had a capacity of more than 1,400 MW to add to the national grid, if permission was rendered. And if so, there would in fact be a surplus. CEB’s structural operations Elaborating further, the PUCSL said that when scrutinising how the bigger projects were done, it was clear these were done by foreign-funded agencies and countries with their technical expertise. The CEB had only contributed with the coordination plan. The PUCSL believed that the structure of operations of these projects should contain the management of revisited projects while remedial action was taken. “If you look at this year too, we don’t see any plant being constructed, which means that we will be carrying forward this shortage to the following year as well. On top of that, there would be an increasing demand in 2020, which is again added to the deficit. Then we will be compelled to purchase power based on emergency or supplementary purchasing,” Herath stressed. “The unit and capacity price compared to the normal would be very high. The unit cost of Colombo Power Barge (of the capacity of 60 MW) is Rs. 18. Private thermal costs more than Rs. 26 and emergency costs more than Rs. 30 or Rs. 40. Sometimes, there are cases we have paid around Rs. 60,” he added. Minister’s option Meanwhile, Minister Karunanayake, justifying his Turkish proposal to purchase supplementary power, told The Sunday Morning that the proposal was not an unsolicited proposal as it was one of those received from an EoI called by the CEB. “There are 20 other companies. Everything is much more than this. And everything will take 540 more days, which amounts to one-and-a-half years. We can’t wait amidst power cuts for the power to come,” he stressed. Reportedly, the Minister had sought Cabinet approval on 20 April to deploy two vessels in Kerawalapitiya and the Galle Harbour – each capable of supplying 200 MW. Cabinet intervention had been sought on the basis that the CEB Board of Directors and senior officials were reluctant to approve the proposal in view of what Minister Karunanayake described as a “social and legal situation”. However, the Minister clarified that he did not want to purchase a single megawatt of power, but the relevant authorities should make sure that there would be no power cuts in the future. More options The Sunday Morning learnt that the CEB had no other options at present to avoid future power cuts. But the engineers claimed that even though there were no options available, it couldn’t approve a proposal which was not transparent or feasible enough, which could pose huge threats in the future. The proposal was first approved by the Cabinet and then referred to the CEB. A proposal given by the Turkish company Karadeniz on 12 April for two 200 MW barge-mounted power ships contained a condition requiring the Government to buy 70% of the production, The Sunday Morning learnt. Cabinet approval had been granted on 30 April. The Cabinet approved the proposal to procure 200 MW of power priced at Rs. 24.98 a unit from a barge stationed in Kerawalapitiya for a six-month period, after a cabinet paper was presented by Minister of Power and Energy Karunanayake. A second cabinet paper presented by the Minister, which is yet to be approved, proposed the price be increased to Rs. 26.20. “When we evaluate a proposal, we consider three conditions – technical, financial, and commercial. All those conditions should be favourable for the country for the proposal to be accepted,” CEB Engineers’ Union President Saumya Kumarawadu explained.

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