CEB loses Rs 69M in generation profits

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Ceylon Electricity Board’s (CEB’s) bottom line was dented by at least 36.97 per cent (Rs 69.33 million) on Saturday (17 September) alone, thereby reducing its generation profits to Rs 187.55 million due to the malfunctioning 3X300 mW Norochcholai Coal Fired Power Plant (NCFPP) on Saturday, an analysis of CEB data from yesterday (Sunday, 18 September) showed.

If NCFPP was fully functional, it has the capacity to meet 40 per cent of Sri Lanka’s electricity generation needs. But because of this particular malfunction, which has been the ‘bane’ of CEB at least since 27 June, NCFPP provided only 33.90 per cent of Sri Lanka’s electricity requirements on Saturday, with another 51.50 per cent met by renewable energy (RE) and the balance 14.60 per cent, met by the expensive ‘CEB diesel’ and independent power producers’ (IPP)/private sector diesel together, respectively.

However, if NCFPP was fully functional, the expensive ‘diesel electricity’ requirement would have been only needed to provide 8.50 per cent of CEB’s total electricity requirement on Saturday and not 14.60 per cent as was the case. It’s this additional 6.10 per cent of electricity obtained on Saturday after burning the expensive diesel to generate electricity, that translates to a lost generation profit of Rs 187.55 million to the CEB on Saturday.

Consequently, CEB’s generation profits in the 14 consecutive days to Saturday were reduced by Rs 524.9 million (10.89 per cent) to Rs 4,817.92 million on a cumulative basis due to the malfunctioning NCFPP in the reference period.   

The 900 mW (3X300 mW) NCFPP was built during President Mahinda Rajapaksa’s era at a cost of USD 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 at least its full commissioning on 16 September 2014. The first of its 300 mW machines was commissioned on 22 March 2011 and the last on 16 September 2014. The period 16 September 2014 to 17 September 2022 covers a total of 2,924 days.

If the above 14 days are prorated to 2,924 days, then CEB’s accumulated electricity generation losses due to the malfunctioning NCFPP would have translated to Rs 109.63 billion, in the event it was malfunctioning daily, a loss much more severe than the previous Yahapalana regime’s Treasury Bond scandal.

Computation of CEB’s costs and income is based on data provided by the Central Bank of Sri Lanka’s (CBSL’s) 2021 Annual Report. It discounts the 75 per cent electricity tariff hike which was effected from 9 August 2022 (Ceylon Today’s 10 August 2022 Edition) which would have enhanced CEB’s electricity generation profits and correspondingly, its generation losses as well.

Average CEB tariff rate last year according to the CBSL was Rs 16.37 a unit (kilowatt hour). Calculations also discount CEB’s transmission and distribution losses estimated at 8.72 per cent last year. 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 (one kilowatt hour (kWh)) a unit followed by coal (Rs 10.68), ‘Other renewable energy (RE) such as wind and mini-hydro electricity at Rs 16.22 a unit and IPP’ diesel (Rs 30.35 a unit) and ‘CEB diesel’ (Rs 32.03), respectively. Computation of costs/losses discount NCFPP’s malfunction since the commissioning of its first 300 mW Machine on 22 March 2011, to the interim period that transpired before the commissioning of its last 300 mW machine that took place on 16 September 2014.

By Paneetha Ameresekere