Rs 216 Million Avoidable Loss

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900 megaWatt (mW) Norochcholai Coal Fired Power Plant’s (NCFPP’s) malfunction on Monday alone cost the taxpayer Rs 216 million, Ceylon Electricity Board (CEB) data showed.

This loss comes in the context that yesterday this newspaper reported that CEB will have had increased its record daily power cuts from one to three hours, a threefold or a 200 per cent increase from yesterday.

The reason given for this extended power cut is the breakdown of the US$ 1.35 billion NCFPP built from a commercial loan obtained from the Chinese, sans tender call, during the Mahinda Rajapaksa era.

CEB Acting General Manager Eng. (Dr) D.C.R. Abeysekara, in a statement issued in this connection on Monday, inferred that such power cuts, extended or not, may last for two weeks.

Power cuts, while destroying the economy, because, when industry power consumption reduces due to power cuts, it also impacts growth, also raise safety issues, disruptions to education and inconvenience.

President Ranil Wickremesinghe,in his policy speech made in Parliament on 3 August, said that the duration of daily power cuts have been reduced. But with extended power cuts from yesterday, wonder what he’ll have to say now?

The crux of the matter is that Sri Lanka has insufficient US dollars to import diesel and/or to buy diesel power from independent power producers (IPPs) or the private sector (PS) to ensure the provision of uninterrupted power. The cause is that the country’s spartan dollars were robbed by the Rajapaksas, an example being the NCFPP fiasco.

Subsequently, electricity generated by coal fell by 45.94 per cent (5.66 gigaWatt hours (gWh)) to 6.66 gWh, Monday over Sunday, CEB’s yesterday’s data showed.  Consequently, electricity generated by diesel increased by 700 per cent (8.47 gWh) to 9.68 gWh, Monday over Sunday, CEB statistics further showed.

According to the Central Bank of Sri Lanka’s 2021 Annual Report, the cheapest source of electricity generation to the CEB last year was ‘CEB Hydro’, costing Rs 1.67 a unit or per one kiloWatt hour (kWh) of electricity followed by Coal at Rs 10.87 a unit. Therefore, a unit of “Coal Electricity’ was 550.90 per cent (Rs 9.20) more than a unit of ‘CEB Hydro’.

Diesel was the most expensive source of electricity ‘generation’ last year, causing CEB to buy IPPs/PS generated  ‘Electricity Diesel’ at Rs 30.35 a unit, while the next highest was ‘CEB Diesel’ at Rs 29.01 a unit. 

This shows that ‘IPPs Electricity Diesel’ was more by 1,717.37 per cent (Rs 28.68) per unit compared to ‘CEB Hydro’ and 179.21 per cent (Rs 19.48) more than a unit of ‘CEB Coal Electricity’. Meanwhile, ‘CEB Diesel Electricity’ was more by 1,637.13 per cent (Rs 27.34) a unit compared to ‘CEB Hydro’ and higher by 215.33 per cent (Rs 19.81) a unit in respect of ‘CEB Coal’.

However, as ‘CEB Hydro’ is dependent on the rains, when there are no rains;  no ‘CEB Hydro’, the two main electricity generation contenders would then be ‘CEB Coal’, versus ‘CEB Diesel’ and ‘IPPs Diesel’, together, respectively.

Monday’s ‘CEB Coal Electricity’ consumption was 6.66 gWh or 6.66 million kWh and the diesel electricity consumption breakdown was ‘IPPs Diesel’ 5.75 gWh or 5.75 million kWh and ‘CEB Diesel’, 3.93 gWh or 3.93 million kWh.

The cost of ‘CEB Coal Electricity’ on Monday as per last year’s rates works out to Rs 72,394,200 and that of both ‘IPPs Diesel Electricity’ and ‘CEB Diesel Electricity’ together, Rs 288,521,800.  It is reported that if NCFPP is fully operational, it will meet 45 per cent of Sri Lanka’s total electricity demand.

It therefore may be assumed that due to the breakdown of the NCFPP, CEB or the taxpayer on Monday alone would have incurred an avoidable cost of Rs 216,127,600. On Monday, 60.32 per cent or 24.84 gWh of Sri Lanka’s electricity needs were met by renewable energy led by ‘CEB Hydro’, CEB data showed. Therefore, if Norochcholai was fully operational, it will have had met the balance 39.68 per cent of the island’s electricity need on Monday, instead of a mere 16.18 per cent as the case was. Sri Lanka consumed a total of 41.18 gWh of electricity on Monday.