By Maheesha Mudugamuwa
Sri Lanka is bracing for yet another power crisis early next year as the Government has failed to find a permanent solution for the nearly 120 MW power shortage that has prevailed over the past several years. The capacity shortage is especially acute during the dry season when hydropower generation drops drastically.
The Sunday Morning learnt that in the event all power plants, including ones powered by diesel, furnace oil, and coal are fully operational, the shortage of 120 MW can be accommodated by imposing a power cut of nearly an hour.
However, according to some officials at the Ceylon Electricity Board (CEB), with the country experiencing a severe economic crisis and foreign exchange reserves being limited to essential imports, a ‘perfect’ environment (all power plants operating at full strength) for the power sector cannot be expected, especially during the dry season.
Therefore, even if the expected 120 MW is purchased externally (through private suppliers), the likelihood of power cuts, possibly hours-long, remains, as the Board may not be able to provide the diesel/furnace oil and coal needed to operate the CEB-owned thermal power plants at full capacity.
A CEB official who spoke to The Sunday Morning on conditions of anonymity opined that purchasing 120 MW on an emergency basis from a private power producer at a time when the country could not supply the thermal oil requirement seemed the only option.
However, critics have long pointed out that inaction or lethargy of the CEB in incorporating renewable energy sources to the national grid and failures of successive governments to ensure the implementation of a robust energy policy had repeatedly led to conditions where the State had no option but to seek emergency power purchases to plug the gap.
CEB needs to ensure uninterrupted power supply
The Sunday Morning last week reported that the CEB was taking steps to procure around 120 MW of emergency power to prevent possible supply shortages due to the expected capacity shortage next year.
In a letter dated 25 October 2022, CEB Chairman N.S. Ilangakoon has informed CEB General Manager Eng. Dr. D.C.R. Abeysekara that a total capacity shortage of approximately 100-120 MW had been predicted for the first six months of 2023, with a decision taken to enact speedy procurement to bridge this capacity shortage.
When contacted by The Sunday Morning, the CEB Chairman noted that the CEB must manage the country’s energy demand without imposing power cuts. “The CEB should not be there only to impose power cuts,” he said, stressing that the Board should take immediate steps to make sure that an uninterrupted power supply would be provided next year even during the dry season.
Ilangakoon noted that in the event that the CEB was unable come up with a solution and a policy level decision had to be taken, the higher offices should be informed and it was up to the CEB’s Board of Directors, the Ministry, and the Cabinet to take necessary steps to prevent any possible power cuts during the dry season.
“Emergency power should be procured in a natural calamity situation, but so far emergency power has been purchased for man-made calamities. I will not let that happen again. There should be a proper plan to provide power.
“It is the engineers who work as industry professionals and they know the condition of the power plants, how they should be used, and how hydropower and renewable energy should be utilised. They should have a plan to provide an uninterrupted power supply 24/7. It is their responsibility. The financial responsibility has also been vested with the CEB’s General Manager. The generation should be planned properly by managing the finances and ensuring that there is a 24-hour power supply,” the Chairman stated.
High costs of emergency power
A senior CEB engineer who wished to remain anonymous told The Sunday Morning that the CEB needed about 150 MW of emergency power during the first four months of next year under normal circumstances. The engineer added that since the CEB had already shed power recently due to economic reasons, there was no need to purchase 150 MW of new emergency power as that requirement could be managed through the ongoing power cut duration, especially if power cuts were to be continued to save foreign exchange.
“Even if we buy emergency power, we will not have diesel to run such plants, but whether we generate or not, simply to increase emergency power we will have to pay about $ 3.5 million as hiring charges. In addition, we will require about Rs. 20 billion to buy diesel,” the engineer said.
Meanwhile, according to the latest audit report (2020) on the CEB and its subsidiaries issued by the National Audit Office (NAO), CEB had spent Rs. 22.2 billion to purchase a quantity of 811 GWh of emergency power during 2020.
CEB faces obstacles in procurement
Nevertheless, in its explanation of the audit findings, the CEB management has noted that even though the CEB had prepared Long-Term Generation Expansion Plans (LTGEP), the Board did not have the authority on its own to carry out the development of such plants identified in the LTGEPs, as the CEB was heavily dependent on other agencies and was governed by the rules and guidelines of other institutions such as the Electricity (Procurement) Rules No. 2 of 2016 published by the Public Utilities Commission of Sri Lanka (PUCSL) and Government Procurement Guidelines.
“Further, regularly changing policies, ordering changes to key attributes of ongoing power procurement in mid-way – such as technology, location, capacity, and ownership model from Build-Own-Operate (BOO) to Build-Operate-Transfer (BOT) – and complete cancellation of a power project at a very mature stage can cause the procurement to move significantly backwards by months and years,” the CEB management has stated.
“There are also delays to secure finances. Under Section 38 of the Ceylon Electricity Board Act No. 17 of 1969, the Board was given authority to ensure that revenue of the Board is sufficient to (also) meet a reasonable proportion of the cost of development of services of the Board. However, the ‘tool’ that was available with CEB (under Part V of the CEB Act) to secure such finances, namely powers to set tariffs and charges, was taken off from CEB in 2009 and was given to PUCSL by the Sri Lanka Electricity Act.
“Since then, CEB was unable to carry out any development work out of its own funds due to not being given a cost reflective tariff. Further, due to other Government circulars and acts, all requests of funds from lending agencies need to be channelled via the Department of External Resources. Due to constraints in the Government fiscal space, both transmission and generation projects can get delayed at such stages due to lack of finances,” the document stated.
Immediate action
The prevailing energy shortage is now predicted to last till 2025 as the ongoing construction of one of the LNG power plants in Kerawalapitiya is expected to be completed by that time.
However, questions have been raised as to why the country is unable to fulfil its energy shortage via renewable energy resources such as rooftop solar or wind power.
As per the latest Long-Term Energy Generation Expansion Plan 2022-2041 (Draft) of the CEB, it is highlighted that a capacity shortage was observed during the 2022/2023 period due to the already delayed major power projects and maintaining adequate generation capacity was important during said period to alleviate short-term capacity shortages.
The plan highlighted that the timely implementation of planned power plants was a must to ensure adequate, economical, and reliable supply of electricity in both near and long term.
Accordingly, the CEB has made several suggestions:
- The timely implementation of 35 MW Broadlands Hydropower Plant, 120 MW Uma Oya Hydropower Plant, 31 MW Moragolla Hydropower Plant, and 130 MW new gas turbines at Kelanitissa to facilitate restoration of supply in case of an islandwide power failure
- Establishing the Floating Storage Regasification Unit (FSRU) and associated natural gas supply infrastructure and the two 350 MW LNG-fired combined cycle power plants at Kerawalapitiya in 2023 and 2024
- Conversion of existing combined cycle power plants to natural gas by the time natural gas supply is in place
- The 300 MW Lakvijaya Coal Power Plant extension project
- Wind and solar PV development in a mix of small- to large-scale development having monitoring and controlling facilities enabled at the National System Control Centre
- Renewable energy resource forecasting system in intra-hour, intra-day, and day-ahead timeframes
- Critical transmission infrastructure to evacuate power from planned near-term power plants such as the second 220 kV cable between Kerawalapitiya and Colombo