Policies call for coordination in power sector
Posted on October 12th, 2021

by Neville Ladduwahetty Courtesy The Island

The material presented below relates to the policies explored by successive governments to meet the rising demands for water and electric power. Consequently, the policies adopted are with the intention of either increasing demands for water and power generation capacities, directly or indirectly, as a byproduct of another policy. They are presented as contradictions herein as the objective achieved by implementing one policy contradicts directly or impacts negatively on the objectives of another policy. For instance, new projects are pursued at considerable cost without expanding existing facilities to meet near identical power generation capabilities. Another instance is that water demands in one region are met at the cost of impacting negatively on existing power generation capacities.

Addressed below are three projects that expand on the above general claims:

1. Calling for bids to build, operate and transfer a new 350MW Liquid Nitrogen Gas (LNG) plant in Kerawalapitiya at a cost to the government’s Renewable Energy Programme.

2. Building new plants without expanding capacities at Victoria and Kotmale.

3. To transfer water to the Northern Province by transferring water from Randenigala to Moragahakanda at a loss of power generation at Randenigala and impacting negatively on the supply of water to the left and right banks of the Mahaweli at Minipe.


The most recent contradiction in the Power Sector is the Framework Agreement signed by the Government of Sri Lanka with New Fortress Energy (NFE), an American energy-based Company on September 17, 2021, to introduce LNG as the source to generate electric power. Since this is a fossil fuel it would be a set-back to the government’s own programme for Renewable Energy.

According to a press release issued by New Fortress Energy on September 21, 2021, and reported by NEW YORK–(BUSINESS WIRE) The Government of the Democratic Socialist Republic of Sri Lanka (GOSL) jointly announced today that they have executed a definitive agreement for New Fortress’ investment in West Coast Power Limited (WCP), the owner of the 310 MW Yugadanavi Power Plant, based in Colombo, along with the rights to develop a new LNG Terminal off the coast of Colombo, the capital city. As part of the transaction, New Fortress will have gas supply rights to the Kerawalapitiya Power Complex, where 310 MW of power is operational today and an additional 700 MW scheduled to be built, of which 350 MW is scheduled to be operational by 2023”.

This means that as a result of the deal with NFE the total power generating complex at Kerawalapitiya would consist of the existing 310 MW plant, the 350 MW plant expected to be completed in 2023, and another new 350 MW plant to be built latter, thus making a total of 1010 MW of power generation. Furthermore, all these plants would be operating on LNG. In order to make all three plants operational, NFE has retained the right to develop a new LNG Terminal and as reported, with exclusive rights to supply LNG for a period of five years with the provision to renew supplies for a further 10 years.

Leaving aside the merits and demerits of the deal with NFE, there is a need to understand the overall status relating to the power sector. With implementation of the deal with NFE, what Sri Lanka would end up would be a 1010 MW LNG plant at Kerawalapitiya, 900 MW of a coal-fired plant at Norochcholai and a commitment to increase Renewable Energy (RE). Therefore, instead of expanding the capacities at Kerawalapitiya to 1010 MW, the deal with NFE from the perspective of Sri Lanka’s national interests, particularly from an environmental point of view, should be to convert the existing coal-fired plant at Norochcholai to LNG along with the LNG Terminal from Kerawalapitiya to Norochcholai. Such a shift of focus from Kerawalapitiya to Norochcholai would not affect progress on the RE Programme. Furthermore, converting from coal to LNG would significantly improve the quality of the environment in and around Norochcholai.


Another contradiction is the policy of the government to call for bids to set up a new 350 MW LNG plant at Kerawalapitiya without expanding the capacities of existing plants. A glaring example of this is that the recommendations proposed in a Feasibility Study for Expansion of Victoria Hydropower Station”, dated June 2009, undertaken for the Ministry of Power and Energy on behalf of Japan International corporation Agency (JICA), have not been explored.

Section 6.1 of this report states: The expansion of the Victoria Hydropower Station is composed of a headrace tunnel, a surge tank, penstock(s) and a powerhouse. The water intake was already constructed for the purpose of future expansion of the hydropower facility during the construction of the existing Victoria dam…One possible option of expansion plan is simply to place these components nearby the existing hydropower facility…referred to as ‘Basic Option’” (p. 29). Although the Report presents two other options, what is recommended is to place an expansion powerhouse nearby the existing powerhouse facility.”

In the Section under Conclusions and Recommendations, the Report states: Based on the results in (5) above, the Project is to connect the existing intake for the expansion and a new powerhouse to be located next to the existing powerhouse with a waterway parallel to the existing waterway. Water for generation of 140 m3/s is to be taken at the existing intake for the expansion and led through the headrace tunnel and penstock to the surface type powerhouse. The installed capacity is 228 MW with 2 units, and 716 GWh of annual energy are obtained with the existing and expansion power facilities (210 MW and 228 MW). Power generated is evacuated to the CEB grid through the existing transmission lines” (Ibid, p.4).

The material presented above clearly demonstrates that a real opportunity exists to double the capacity at Victoria using a resource that is not only the cleanest and cheapest resource to generate power but also one that allows these freely available resources to be wasted without making full use of their potential. It is indeed a serious omission to pursue new power generation units such as at Kerawalapitiya without expanding capacities at existing power generation units such as at Victoria.


Yet another contradiction is the construction of the Upper Elahera Canal to transfer water from Moragahakanda to the Iranamadu Tank in the Northern Province. To achieve such an objective, it is necessary to transfer a considerable volume of water from Randenigala which is below the Victoria Hydropower Scheme back to Moragahakanda and in the process, to not only lose the power generating capacity at Randenigala but also to drastically affect the current supply of water to the right and left banks of the Mahaweli at Minipe.

There are several Reports addressing this issue of supplying much needed water to the North Central Province (NCP) and the Northern Province (NP). The concept of diverting water from the South to the North are central to a majority of the Reports because their studies have revealed that current arrangements do not have the capacity to deliver water to the NCP and the NP.

For instance, Paragraph 21 (p. 343) of the Report dated December 2014 prepared for the Ministry Irrigation and Water Resources Management by Technical Assistance Consultant on behalf of the ADB states: The study has shown an increase in the diversion capacity at Moragahakanda to 974 MCM annually, required for the Upper Elahera Canal (UEC) and NCP canals addition to 617 MCM to the Elehera Minneriya Yoda Ela. The supplemental diversions from Kalu Ganga (772 MCM) Bowatenna (496 MCM) reservoirs and its own watershed (344 MCM) are adequate to cater the water demands under UEC.”

The conclusion that adequate” water exists to deliver 974 MCM to the UEC and through it to the North Central and Northern Provinces depends on the availability of 772 MCM through the Kalu Ganga. Since arrangements to deliver the 772 MCM currently DO NOT exist, what is available is the water diverted from Bowatenna, namely 496 MCM and the 344 MCM in the existing catchments, making a total of 840 MCM minus the 617 MCM needed for the ancient five tanks from the Elahera Yoda Ela.

Therefore, what possibly could be transferred by the Upper Elahera Canal is 223 MCM. This is less than the 281 MCM intended to be transferred to Mannakkattiya-Eruwewa-Mahakandarawa (155 MCM) and 126 MCM to Huruluwewa according to paragraph 151 in the Report titled Environment Impact Assessment Report” prepared for the Ministry of Irrigation and Water Resources Management” by the Mahaweli Consultancy Bureau (Pvt) Ltd. in December 2014.

In an independent study carried out by SMEC International (Pvt) Ltd for the World Bank titled Updated Mahaweli Water Resources Development Plan”, dated November 2013 states in Appendix 5 Table 5.1, p.9 that the Downstream Release from Bowatenne as 651 MCM, the catchment inflow into Moragahakanda as 313 MCM and the release to the five ancient tanks from the Elahera-Minneriya Yoda Ela as 573 MCM. Therefore, water available for transfer to Upper Elahera Canal is 651+313= 964 MCM less 573 MCM, which is 391 MCM. Thus, the quantity of water in excess of what is needed for Mannakkattiya-Eruwewa-Mahakandarawa (155 MCM) and 126 MCM to Huruluwewa) is 110 MCM. Thus, this report confirms the findings of the previous report that there is insufficient water to meet water demands to the areas beyond Anuradhapura to the NCP and the NP.

The conclusions that could be objectively reached from the analysis of data in both reports is that as long as no arrangements exist to transfer water from Randenigala to Moragahakanda the quantities of water available are NOT sufficient to meet the demands of the NCP and the NP.

The proposal therefore is to transfer water from Randenigala augmented by water from Hasalaka Oya and Heen Ganga along the way together with water in 128 sq. km of the Kalu Ganga catchment (say76 MCM) to meet the demands for water in the NCP and NP. Since the water demands in these two small tanks are 75 and 56 MCM respectively, Randenigala would need to divert 772MCM less (76+75+56) which is 565 MCM annually. Diverting 565 MCM of water from Randenigala, which is equal to the active capacity of the reservoir would have a serious impact not only on power generation but also on the amount of water available for diversion to the right and left banks of the Mahaweli at Minipe. Therefore, diverting water to Moragahakanda from Randenigala is NOT an option. Diverting water to the NCP and NP at the expense of power generation and water availability to the East of Sri Lanka is a clear instance of contradictory policies that have been actively pursued by successive governments.


What is evident from a review of the projects cited above is that they are conceived and conceptualized in isolation without taking a holistic view at the planning stage and taking into account the impact of either ongoing projects or projects that are planned to be implemented. The three topics reviewed are, the New Fortress Energy(NFE) proposal to increase the power generation capacity at Kerawalapitiya, not capitalizing the capabilities to nearly double the generating capacity at Victoria and the delivery of water to the North.

For instance, the CEB had called for international bids to install a 350 MW LNG plant at Kerawalapitiya. Prior to the closing of bids, the government entered into a Framework Agreement with NFE to build two 350 MW LNG plants alongside the existing 300 MW plant at Kerawalapitiya together with a Floating Storage Regasification Unit (FSRU) to handle the LNG. The generating capacity at Kerawalapitiya would then be 1010 MW. In the meantime, the existing 900 MW coal fired at Norocholai would continue to belch pollutants associated with coal-fire power units. Therefore, the intended project should be redefined to convert the plant at Norochcholai to LNG and for the FSRU that was to be built at Kaeawalapitiya to be moved to Norochcholai. In addition, the needed increase in power generation should be met by doubling the capacity at Victoria as suggested in a Report to the Ministry of Power and Energy prepared by Japan International Cooperation Agency with any shortcomings being provided by Renewable Energy.

With regard to delivery of water to the North, the data presented above clearly demonstrates that as long as current levels of diversion from Bowatenna continue and water from its own catchments prevail, the quantities of water at Moragahakanda are insufficient to meet the demands in the NCP and NP. The ONLY way water demands of the NCP and NP could be met through the Upper Elahera Canal is by transferring nearly 565 MCM, which is equal to the active capacity of Randenigala Reservoir to Moragahakanda. The impact of transferring such a significant amount of water would not only be to curtail power generation but also to impact seriously on availability of water to fulfill the needs on the right and left banks of the Mahaweli at Minipe. This is a clear example of the policy of Mahaweli water to the North contradicting the policy of power generation and supply of water for agriculture.

These hard realities are known only to a few. Consequently, the expectation that water would eventually reach the North is so real that the general belief is that water to the North from the South is what would unify Sri Lanka. Therefore, it is imperative that measures are adopted to correct these misplaced perceptions and for alternative strategies to be developed to meet the demands for water in the NCP and the NP with the participations of the people concerned.

It is hoped that the material presented above would alert governments and project planners to take a holistic perspective when projects are conceptualized and not take compartmentalized approaches as demonstrated by the few examples cited above.

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