YAHAPALANA AND THE ECONOMY Part 11 A
Posted on August 10th, 2019

KAMALIKA PIERIS

 ELECTRICITY   (   MAHINDA RAJAPAKSA PERIOD)

President Mahinda Rajapaksa, when he assumed office on November 2005, immediately commenced the implementation of the 300MW Kerawalapitiya Combined Cycle Power Plant in early January 2006. This added 200MW to the system by 2008. That helped to avoid the massive power shortage and power cuts envisaged in 2008. A further 100MW from the same Plant was added to the system in 2009, which enabled the Government to confidently go ahead with electrifying the entire country from the then existing electrification level of about 60%.

The 900 MW Norochcholai Coal Power Plant too was cleared for implementation in three stages in early January 2006, and its Phase 1 added 300MW to the system in July 2011, this avoiding the electricity shortage expected in 2011.

Further electricity shortages were expected to occur in 2014 due to the rapid electrification program of the entire country, and the Government’s aim to provide electricity to all on a 24x7basis. Therefore, Phases 2 and 3 of the Norochcholai Coal Power Project were accelerated, adding 300MW in May 2014 and another 300 MW in October 2014. Another 600 MW Super Coal Power Plant was also planned from 2013 onwards, with construction to commence around 2016 as a further strategy to ensure continuous power beyond 2025. That project was to be carried out with a loan from Japan. The massive Wind Energy Park Project in Mannar, which would generate375 MW, was also finalised and ready for tendering with ADB loans.

Construction on the Sampur Coal Power Plant was to commence by the second quarter of 2015. JICA had already commenced a feasibility study to establish such a Plant in Sampur, in close proximity to the CEB/NTPC Plant location, in order to rationalize the transmission of power from both plants.

By the end of 2014, there were also several major Hydro Power generating projects in progress. They were the 120 MW from the Uma-Oya Hydro Power Project-commenced 2011 and completed 80%. The 40 MW from the Broadland Hydro Power Project-commenced 2013, and completed 40%. The 25 MW from the Moragahakanda Hydro Project-commenced in 2013 and completed 70%. In addition, 35 MW from the Moragolla Hydro Power Project, 25 MW from the Seethawaka Hydro Power Project.

The Government was also planning to implement”Pump-storage” Hydro generation projects in due course in order to increase the peak generation capacity of several hydro generation power plants. Towards that end, a detailed feasibility study was also carried out in 2013 with support from the Government of Japan.  

A further 150 MW through the Upper Kotmale Hydro Power Project, 375MW through several mini-hydro Projects, 100MW through two Solar Power Energy Parks in Hambantota, 98 MW through wind-driven Power Plants in Puttalam, and 23 MW through Biomass projects, were added to the National Grid. A further 30 MW was added as a result of consumers generating their own electricity through roof-top solar panels installed at their residences, factories, hotels, etc. which was encouraged through a “net metering facility” that was introduced in September 2008. Through these measures, the Government was able to honour its solemn promise to local and foreign investors that Sri Lanka will never experience power shortages again.

Two privately owned very high cost “emergency power” plants, Aggreko (25 MW) and Coolair (15 MW) had been in operation in Jaffna since 1996, with annual generation agreements being renewed each year, to provide electricity to Jaffna, due to the break-down of the main transmission network from Vavuniya.  However, immediately after the war ended, the Government re-connected Jaffna to the National Grid and the two “emergency power” plants were terminated. Whilst doing so, the Government augmented the power needs in the North by commissioning CEB’s own25MW Thermal Power Plant in Jaffna in December 2012.

Out of eight Thermal Power Purchase Agreements, four Agreements which ended between November 2005 and December 2014 were not renewed as it was the Government’s intention not to purchase costly Thermal Power from Private Power Producers. Accordingly, not a single unit of Thermal “emergency power” was procured during the period of November 2005 to December 2014.

By implementing the above strategies and projects in a timely and scientific manner, the Rajapaksa Government was able to prevent power cuts and ensure continuous power in the country. It was also able to reduce the Consumer Electricity Tariff by a significant 25% with effect from the time of the addition of Norochcholai Phase 3, namely October 2014. The electricity requirements in keeping with the power demand trends from 2018 to 2025 were also anticipated well in time.

ELECTRICITY   (   YAHAPALANA PERIOD)

Yahapalana Government could have easily commenced physical construction work on the 500MW Sampur CEB/NTPC Coal Power Plant by mid-2015 if it had diligently followed the on-going process. If it had done so, the Sampur Coal Power Plant would have been ready to commence generation by end of 2018. However, the new Government summarily canceled the Project in early 2015.

Analysts looked back and saw a link between this and the actions of earlier governments. They said that governments that came before Rajapaksa had also done the same thing. In 1992, the President had instructed CEB to refrain from proceeding with the Mawella coal-fired power plant”. A committee called the “Power Committee” was sitting at that time, chaired by the Secretary to the Treasury. So, the President decides, not the engineers said, analysts.

In 2002 Japan was told by the Prime Minister that the government has decided to cancel the Norochcholai coal power plant.” This time the committee behind it was called the “Energy Supply Committee”. So the PM decides, not the engineers.

The same individuals who sat had in various dubious committees outside the Ministry of Power and Energy in 1992 and 2002    stepped in again in 2016 dictate to the Ministry on how to run the electricity supply system. This time the committee was called the “Cabinet Committee on Economic Management”, continued the analysts.

in 2016, the Prime Minister appointed yet another a “committee” and all its members, except one, had no experience, at all, in the subject of electrical power systems, and the committee report came out precisely as expected “build gas power plants, bury Sampur”.

The decision to cancel the Sampur power plant, in 2016 was a decision to kill, and not to develop, the electricity sector. Even a decision to kill a project would have been compensated, at least partially, if Yahapalana had swiftly commenced a gas import terminal and gas-fired power plant, but they did not do that either, said an irate expert.

What would it have cost to resettle the people of Sampur in good alternative homes and lands, asked critics.  Calculate on the basis of 1000 families, though the estimate given was 825 families in June 2015. If it takes Rs 2 million per family to relocate to new lands (including homes, schools, health, and transport), 1000 families will require Rs 2 billion. That’s two orders of magnitude less than Rs.213 billion. Even if the cost per family was five times higher, comparatively the total it is still tiny said, one critic. “The additional cost which has to be incurred between 2019 and 2024 to provide oil-fired power due to the absence of Sampur coal power is $1.271 billion (Rs 213 billion).

The Government, during its first 100 days, decided to retire most independent power producer (IPP) power plants, resulting in the loss of medium-term power plants. It then also decided to stop the Sampur coal power plant. As such, both short-term and medium-term power plants were lost to us,” CEBEU said. We have been pushed into a situation where only the purchase of costly emergency power can end the crisis.

Experts complain that no major power project has been commissioned since Norochcholai in May 2006. A tender floated in 2016 to construct a power plant has still not been awarded. As of May 2019, it is being shuffled around between various authorities. The delay is supposedly due to various Ministers jockeying for different investors based on who is prepared to pay the highest commission.’

CEB had incurred a loss of over 80 billion in 2018 and it would continue to hemorrhaging money for the next six to seven years unless a major low-cost power plant was set up, they said in February 2019. ‘After the Norochcholai Power Plant was built in 2014, the generation cost of one unit of electricity dropped to Rs. 15.07 and the government was able to reduce the electricity bill by 25%. However, since then no low-cost thermal power plants had been added to the system, though each year the demand went up by 200 MW. The cost of one unit of electricity had gone up to Rs 21.32 in 2017 and the CEB had lost Rs 45 billion that year.

Then came the good news. In May 2019 it was reported that at last sanity has prevailed. Cabinet approved the construction of three coal power plants.  They gave the approval to construct two 300 Mw coal power plants at Foul Point, Trincomalee, and another 300 Mw coal power plant at Norochcholai.

CEB VS PUCSL

THE Ceylon Electricity Board  (CEB) controls the generation, transmission, and distribution of electricity on the island. It is, therefore, a very powerful organization. It is also a technically very competent body,  well trained in electricity generation.

An official recalled that in 1980, Dr. P. N. Fernando, Electrical Engineer, Ceylon Electricity Board went to the World Bank to run the Wien Automatic System Planning a computerized generation planning program developed by IAEA, then available on the WB mainframe computer. On his return, he set up the Generation Branch in CEB and trained other engineers.

Since then CEB engineers have very efficiently carried out Generation Planning, taking into consideration, the local, international and global requirements, and the need to run as a viable commercial venture, with the least inconvenience to consumers.   There is no other competent body to dictate terms to highly qualified electrical engineers in this field in the CEB,  officials declared.

However, a monster organization in the name of PUCSL had been set up to question the experts of the CEB, and alter or delete some items from the Least Cost, Long term Generation Plan.  There is a suspicion as to whether the PUCSL  was set up to sabotage CEB proposals, to create a power crisis so that private suppliers can benefit. PUCSL has interfered to the extent of calling for consultancy for the removal of electric posts. CEB must be taken out of PUCSL control. It is high time the government seriously thinks of abrogating the Act which gave birth to this monstrous PUCSL organization, said, critics.

The CEB was managed efficiently, prior to coming under PUCSL and there was a time when the Treasury insisted that the CEB invest in Treasury bonds rather than elsewhere. That was due to mutual understanding and directives given by the Ministry for Power and Energy and CEB, guided by a knowledgeable Minister and Secretary to the Ministry. The  Chief Electrical Engineer post at Ministry should be re-introduced, with extra powers, engaging a very knowledgeable senior electrical engineer to oversee, instruct and guide the CEB.

No one is  more competent to formulate an energy generation plan than the Generation Plan Engineers of the CEB and its outstanding energy experts, taking into consideration the country’s needs, global requirements, its own working of the institution to run at a profit at the same time conscious  of pricing to ease the burden on consumers, concluded critics.

In July 2019 the media reported that there is a cabinet paper to amend Sri Lanka’s Electricity Act to remove powers from PUCSL and to take the same to the Ministry of Power and Energy. This will result in major manipulation of powers and will lead to more emergency power purchasing from private parties, no transparency, no monitoring from third parties on the power purchase, power agreements and tariff of consumers which involves billions in public money, said critics. This will lead to tariff increase of the electricity consumers as well as establish the CEB as a loss-making entity for the next decade, said critics.

POWER CUTS

The power crisis in Sri Lanka had been looming for a considerable period, said analysts. Engineers had warned power cuts were inevitable by March or April 2019. This idiotic government was warned about this calamity by the CEB, the CEB Engineers Union, the Institution of Engineers and independent consultants, critics said. Power crises will happen for the next five to six years, warned the CEB Engineers’ Union (CEBEU) in 2019.

Several factors have contributed to the present power crisis. This was mainly due to the non-implementation of several critical power projects,  Norochcholai Coal Power Plant (since 1990),Kerawalapitiya Combined Cycle Power Plant (since 1990), Trincomalee Coal Power Plant (since 1985)and Upper Kotmale Hydro Power Plant (since 1990) said one critic. At least 150mw of power should be added to the national grid every year. There has been no major plant since 2014. CEB   blamed the PUCSL for not approving the CEB’s Least Cost Long-Term Generation Expansion Plan.

The power crisis was due to several factors, agreed on a second critic. Firstly, the undue long delay in selecting an investor to build the 300 MW combined cycle power plant at Kerawalapitiya, for which proposals were invited in November 2016. Secondly, the undue long delay of over 10 years for finalizing the plans to build the coal power plant at Sampur, Thirdly, the cancellation of the BOO project inviting proposals in November 2006 to build 4×300 MW coal power plants on the Southern coast during 2012 – 2020, Fourthly, the cancellation of the BOO project to build a 1200 MW LNG power plant at Hambantota, initially with 300 MW capacity, when it was about to commence work in 2015.

Engineers warned in April 2019 that the power situation was extremely volatile. The supply of electricity after the national holidays hinges only on a perfect scenario” where all power plants work smoothly, emergency power is connected promptly and the expected monsoons arrive on time,” warned the President of the Ceylon Electricity Board Engineers Union. In the event of an unfortunate breakdown in Norochcholai, power cuts would become inevitable, he said.

Engineers in charge of managing power supply wrote to the CEB’s Board of Directors on March 6 saying power cuts will have to be introduced to balance the grid. The General Manager notified the Ministry on March 18 that the utility planned to curtail electricity. He attached the proposed power cut schedule with the letter. But the Ministry did not grant permission, the CEBEU alleged.

The CEB repeatedly notified Power and Energy Minister that the situation was gradually deteriorating. Once the reservoirs are drained, we can’t refill them unlike fuel tanks,” the GM pointed out. We forecast this from October. And we gradually came to a situation where supply capacity was not enough to meet demand.”The CEB is now being accused of illegally imposing power cuts without prior notice but the Ministry must take the blame for refusing to give permission despite warnings being conveyed well in advance.”

Energy sector sources said there was another development that worsened the crisis. The reservoirs did, indeed, have water,” said one expert. But in December, the CEB carried out a planned shutdown of the Lakvijaya coal power plant’s third unit for an overhaul and they couldn’t get it running till February. What was meant to last one month went on for two-and-half months. They drew down on the reservoirs to plug the gap.”

The CEB was then compelled to introduce power cuts without notice to prevent the grid from crashing. If the system cannot meet the demand, it will go for automatic shutdown in six steps,” officials said. Whether the PUCSL or anybody else says we can’t have power cuts, the system will trigger a natural death. We are preventing it by shedding some excess power. The Public Utilities Commission of Sri Lanka, the regulator,  took the CEB to court for implementing power cuts without prior notice or approval.

Engineers had recommended the extension of agreements with retired IPPs like ACE Power Embilipitiya and Asia Power in Sapugaskanda. The CEBEU opposed emergency power on principle” but there was now no other way to stave off electricity interruptions. This crisis could have been avoided if we started private generation in January 2019,” but there were objections to this. Everyone started shouting that there was enough water in the reservoirs and that CEB was trying to get private power from friends and colleagues, experts said.

Emergency power purchases have been criticized. The actual cost of oil power-based electricity can be as high as 43 Rs/kWh and yet the government adds more emergency power plants to the system. “In 2019, the CEB purchased 670 megawatts of emergency power an increase from 158 megawatts in 2018. The number was 100 megawatts in 2016. The CEB, once a profit-making entity has now become a loss-making entity due to this private power purchase.

In March 2019 the media reported that people are left without electricity for three to four hours at times. In April 2019, the media reported that the majority of electricity consumers were confounded by the manner and timings of the power cuts. As they were unpredictable, it left them unable to plan their daily routines or work. Some consumers spoke of how they had no power cuts at all while others said they experienced more than other areas, even as long as four hours. And the most common allegation was that areas with VIP residences were not having their electricity curtailed.

The power cuts are organized by feeder”..Where there are multiple feeders”, say 10 to 20 feeders for a particular time slot, there is no need to shed all the feeders at the same time,”  CEB said. This is why some power cuts have been of varying lengths; and why some areas don’t have interruptions even when they are scheduled and others have cuts without forewarning.

In April media reported that with less than five days left for the Sinhala and Tamil New year, power cuts have affected all sectors including the business community. They have made day-to-day lives of people difficult as even simple errands are routinely put off. Shopping plans are delayed, service providers are failing to meet deadlines and normal life is disrupted.

In some areas, the public cannot take phone calls are fiber-optic lines are inoperable during power outages. Communication centers and shops that sell printouts, image scanning, telephone and Wi-Fi services are suffering. People with various ailments are affected as some pharmacies are closed during power interruptions with air-conditioners not functioning. Many medicines need to be stored in cool conditions with less humidity.

Vehicle repair shops and service stations can’t function as electric hydraulic lifts, pressurized water guns and pumps don’t function. These garages, therefore, have to halt certain services for hours. Rice mill owners, grinding mills and those who store fresh milk and frozen products including fish have been badly hit.

Eateries, restaurants, and bakeries were suffering not only because customers had to bear the dark and the heat. Their electric ovens, refrigerators, cool rooms, as well as food heaters, were of several hours a day. The water sumps at construction sites as well as high rise buildings were affected. Apartments on the highest floors were the worst hit. The phone and computer repair shops were also complaining. Though Colombo city did not experience power cuts until last week, the situation changed this week with the CEB curtailing power in selected areas. It attributed this to the worsening power situation”.

A small-time printing press owner said his printing press was off for over three hours a day now. Why can’t the government at least provide power during the week prior to Sinhala and Tamil New Year?” he asked. This is the time we get work to print banners, notices, cards, and calendars for New Year.” He traveled to Colombo to get work done for clients as he had to meet deadlines. Loss of business has made it difficult for him to pay New Year salary advances to the five employees at the press.

A three-member ministerial committee headed by Power and Energy Minister Ravi Karunanayake with Highways Minister Kabir Hashim and Non-Cabinet Economic Reforms and Public Distribution Minister Harsha de Silva was  tasked to make urgent recommendations to end the power crisis .in April 2019 it was reported that  alterations have been made to its report by a senior official of the Ministry of Power and Energy. The committee’s original report had been tippexed and the additions included.

 This has triggered questions on whether the alterations were intended to promote certain business interests under the cover of the power crisis. For example, the committee had specifically recommended the purchase of 200MW  of power for six months from a private supplier operating a barge-mounted plant. The ministry official had added other barge-mounted power projects. Another was the inclusion of two different contracts to different companies for LNG projects — a subject that did not come before the Committee. Though the recommendations were intended to be for a short-term period, the official changed it. It is not clear whether the official included these changes on his own or at the insistence of political leaders. At least, one committee member had refused to sign the report, forcing the Ministry official to revert to the original recommendations.

RECOMMENDATIONS

The country is persistently short of solid, baseload generating capacity, said an engineer. Not a single large power plant has entered the construction stage since 2012 since CEB began work on generator number 3 at Norochcholai, the country’s only coal-fired power plant. It is now five years since Norochcholai was completed, and none of the new larger power plants in the long-term plan has reached anywhere near the foundation stage. Wind, solar, biomass, or similar power plants can supplement, but they cannot substitute the crying need for solid baseload, lower-cost electricity generating capacity.

If the Government wants to listen to the professional point of view, here is the solution:

 Step 1: Appoint a task force with full powers (no politicians, no committees or anyone linked to various committees), to build 1000 Megawatt in Trincomalee, expandable to 2000 MW. Target date to produce electricity: 500 Megawatt in 2023, 500 Megawatt in 2024 

Step 2: Appoint a task force with full powers (no politicians or anyone linked to any of the committees), to build one LNG terminal.Target date to get gas into the country: 2022. Have all the planned gas-fired power plants (existing and new) ready to run by 2022 on gas. Establish a Gas Authority and a Gas Industry Act, to ensure respectable investors come in, not the dubious contractors presently hovering around various politicians.

Step 3: Get more wind and solar power plants into the grid, on the basis of competitive bidding, fix limits to what can be absorbed into the grid. A solid power generating system, not a shaky one as we have, is required to absorb smaller hydro, wind, solar and biomass, to cope with shaky resources like wind and sunshine. ( CONTINUED)

Leave a Reply

You must be logged in to post a comment.

 

 


Copyright © 2019 LankaWeb.com. All Rights Reserved. Powered by Wordpress