News

Power supply: Two coal tenders go unanswered 

  • Confident of uninterrupted supply: CEB
  • CEB to issue tenders for coal again

By Uwin Lugoda

The Ceylon Electricity Board (CEB) is confident that Sri Lanka will not suffer any power cuts in 2022 despite two coal tenders not being picked up last month, The Sunday Morning learnt.

It is in this backdrop that CEB General Manager M.R. Ranatunga stated that there was no immediate threat of power cuts due to there being enough stock to last till next year.

“We only lost two coal shipments meant for next year, so we have enough of the previously brought down stocks to last us till then. We were using the coal we brought in last year till very recently,” said Ranatunga.

He stated that the CEB buys coal in two ways – the first is a term-end buy where they buy for two years, and the second is a spot buy where they buy for a year.

He explained that the term-end shipment was still on its way and the two tenders which were not picked up were for a spot buy shipment.

Ranatunga stated that if the need arose, the CEB would expedite the term-end shipment, to make up for any coal shortage.

An official from the Norochcholai Power Plant stated that the main tender was put out in October for $ 2.4 million, out of which two tenders, each costing $ 300,000, did not get picked up. However, he stated that the CEB plans on retendering them by tomorrow (15), and if it gets picked up, there won’t be a shortage.

“Our annual coal requirement is 124,000 tonnes and it’s brought down by the state-owned company Lanka Coal. Right now, we have 600,000 tonnes of coal which will last us till 25 January, and in addition to that, we ordered and signed another agreement to bring coal down in December.”

The CEB stated despite what the media says, there will be no blackouts caused by the coal shortage, and that if the tender call tomorrow is not successful, the Government will do a government-to-government proposal to meet the demand.

“Globally, coal prices have drastically dropped. Right now, the price is at least $ 100 less than it used to be, so we are confident that we will be able to have our tender picked up tomorrow.”

Conversely, Sri Lanka’s hydropower has reached a very high capacity due to the rains, and the country’s reservoirs have almost filled up, according to Ranatunga. He stated that from now to January, these reservoirs can facilitate Sri Lanka’s hydropower demands.

He highlighted that this was made possible by the country’s reduced consumption of power, mainly due to the reduced consumption in the hospitality sector. He explained that the night-time use of power had gone down to 2,100 MW or 2,300 MW per day, from the previous 2,600 MW. The CEB expects this to remain the same in 2022, with a potential 1% increase.

“Hydropower meets 30% of Sri Lanka’s annual power demand, and right now, our reservoirs are almost full. This is not surprising, since each year our hydro capacity increases two-threefold during the monsoon, and this year, we might be able to meet more of the country’s power demand,” Ranatunga commented.