TAXPAYER BURDENED BY ADDITIONAL RS 58B

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The taxpayer will have to bear an additional burden of Rs 58 billion (US$ 161 million) if two of three units of the 3X 300 MW Norochcholai Coal Fired Power Plant’s (NCFPP) continues to be unrepaired for 365 days, calculations based on data given by the Ceylon Electricity Board (CEB) and Central Bank of Sri Lanka (CBSL) revealed.

In the 10 days to Wednesday, the additional costs incurred by the CEB for burning diesel to provide electricity to the country due to the breakdown of NCFPP is estimated to be Rs 1.58 billion when computing official data. Therefore, for a year this cost works out to Rs 58 billion.

One of Norochcholai’s three (300X 300 MW) machines have been out of order since 27 June, while another broke down on 15 August, resulting in only one 300 mW machine being able to provide electricity to the country since 15 August. This has made the CEB to turn to the more expensive diesel to fill the breach.

Nonetheless, due to the breakdown of NCFPP’s second machine, CEB enhanced their record daily power cuts from an hour to three hours, a 200 per cent increase since 16 August.

NCFPP was built by the Chinese in a mix of commercial and “concessional” terms sans tender call during the Mahinda Rajapaksa era (17 November 2005-8 January 2015) at a cost of $ 1.35 billion. But, more often than not, NCFPP has been out of order since its construction, resulting in the CEB having to rely on the more expensive diesel to fill the breach.

If, however, NCFPP was fully functional, it has the capacity to provide 45 per cent of CBSL’s electricity needs according to the authorities. However, since the breakdown of its second plant on 15 August, it has been able to provide a little over 16 per cent of Sri Lanka’s electricity needs despite enhanced power cuts. Wednesday’s “coal electricity” figure was 16.31 per cent (6.48 giga Watt hours (GWh)) on Wednesday, while that of “diesel electricity” was 17.98 per cent (7.14 GWh). Sri Lanka consumed a total of 39.72 GWh of electricity on Wednesday, according to the CEB.

Meanwhile, renewable energy (RE) led by ‘CEB Hydroelectricity’, has been providing more than 55 per cent of Sri Lanka’s electricity needs at least since 15 August and continuously for 25 days by providing  at least over 50 per cent of the country’s electricity needs since 31 July. RE’s share on Wednesday was 26.1 GWh (65.71 per cent) of which “CEB Hydroelectricity’s” share was 22.76 GWh, equivalent to 57.30 per cent of total electricity generated on the reference day.

Therefore, if NCFPP was fully functional and RE provided the balance 55 per cent of Sri Lanka’s electricity needs as it’s doing now, there would be no necessity of generating the more expensive ‘diesel electricity’ to the country.

 Costs are based on CBSL’s generation charges incurred by the CEB last year and the value of CEB’s benchmark, albeit administered ‘spot’ as at yesterday. According to CBSL, it cost the CEB to buy a unit (one KiloWatt hour (KWh) of ‘diesel electricity’ from the private sector (independent power producers (IPPs)) Rs 30.35, the most expensive of such costs, CEB’s own ‘diesel electricity’ (Rs 29.01), the second most expensive; while ‘coal electricity’ cost the CEB a mere Rs 10.87 last year, the second most cheapest of such costs. Nonetheless, the cheapest source of electricity to the CEB last year, according to the CBSL was ‘CEB Hydroelectricity’, where a unit cost to the CEB a mere Rs 1.67. Yesterday, the value of CBSL’s administered ‘spot’ was Rs 361 to the US dollar.

By Paneetha Ameresekere