CEB’s Generation profits hit by Rs 40.2B since commissioning

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Ceylon Electricity Board’s (CEB’s) ‘electricity generation bottom line’ comprising generation income minus generation costs will have been dented by at least Rs 40.2 billion to Wednesday (14) due to the malfunctioning of the 3X 300 MW Norochcholai Coal Fired Powered Plant (NCFPP) since its commissioning eight years ago, on 16 September 2014, calculations computed by ‘Finance Today’ showed.

This Rs 40.2 billion loss to CEB’s profits is as bad or even worse that the Treasury Bond scandal that took place during the previous ‘Yahapalana’ regime.

The 900 MW (3X300 MW) NCFPP was built during President Mahinda Rajapaksa’s era at a cost of US$ 1.35 billion, sans tender call, by the Chinese in a mix of commercial and ‘concessional’ loans.

But more often than not, it has been malfunctioning since its commissioning in September 2014.

 Meanwhile, in making the above calculations, it presumes that in the review eight year (2,920 day) period, renewable energy (RE) provided a minimum of 60 per cent of CEB’s electricity generation needs. The 3X300 MW NCFPP, if fully functional, has the capacity to meet the balance 40 per cent of Sri Lanka’s electricity needs.

 Computation of CEB’s costs and income is based on data provided by the Central Bank of Sri Lanka’s 2021 Annual Report. It discounts the 75 per cent electricity tariff hike which was effected from 9 August 2022, which will have had enhanced CEB’s electricity generation profits.

 The average CEB tariff rate last year, according to the CBSL, was Rs 16.37 a unit (kilo Watt hour). Calculations also discount CEB’s transmission and distribution losses estimated at 8.72 per cent last year.

Meanwhile, the above computation which covers the period from the full commissioning of the NCFPP, on 16 September 2014, to Wednesday 14 September 2022, covering a period of 2,920 days is derived after extrapolating generation data in the 11 days from 4 September 2022 to 14 September 2022, where CEB’s generation profits bottom line was impacted by Rs 151.59 million during that 11-day  reference period due to the breakdown of one of three of NCFPP’s machines (300 mW) at least since 27 June, forcing CEB to burn the more expensive diesel to meet Sri Lanka’s electricity needs.

In the review 11-day period, RE provided a minimum of 60.80 per cent and a maximum of 75.51 per cent of CEB’s electricity generation needs.

 Nonetheless, NCFPP which comprises three machines, each of 300 MW capacity, has been malfunctioning since its commissioning in September 2014. According to the CBSL’s 2021 Annual Report, the cheapest source of electricity to the CEB last year was ‘CEB Hydroelectricity’ at a cost of Rs 1.67  per unit (one kilo Watt hour) followed by coal (Rs 10.68), Other  renewable energy (RE) such as wind and mini-hydro electricity at Rs 16.22 a unit,  ‘private sector or independent power producers’ (IPP) diesel (Rs 30.35 a unit) and ‘CEB diesel’ (Rs 32.03).

By Paneetha Ameresekere