CEB earnings down Rs 127B due to Norochcholai breakdown

0
120

Ceylon Electricity Board’s (CEB) electricity generation income will have had been dented by at least Rs 127 billion due to the malfunctioning Chinese built 300 MW X 3 Norochcholai Coal Fired Power Plant (NCFPP) since its “full” commissioning over eight years ago on 16 September 2014, an analysis of CEB’s data up to Monday (19) found on CEB’s yesterday’s (20) website showed.

Rs 127 billion of additional CEB’s generation costs is derived by the fact that in the 16 days to Monday, CEB’s generation income had been dented by Rs 692.3 million due the malfunctioning of NCFPP. NCFPP was fully commissioned on 16 September 2014, which is 2,926 days ago, from Monday. Therefore, if these 16 days are prorated to 2,926 days, this figure of Rs 127 billion is derived.

Meanwhile, if NCFPP was fully functional, it has the capacity to meet 40 per cent of Sri Lanka’s electricity generation needs. But because of the above malfunction, which has been the bane of CEB at least since 27 June 2022, NCFPP provided only 31.02 per cent (12.99 GWh) of Sri Lanka’s total electricity requirements (41.87 GWh) on Monday alone for instance, with another 58.32 per cent (24.42 GWh) met by renewable energy (RE) and the balance 10.68 per cent (4.46 GWh), met by the expensive CEB diesel and independent power producers’ (IPP)/private sector diesel together.

However, if NCFPP was fully functional, the expensive diesel electricity requirement will have had been only needed to provide a mere 1.68 per cent (0.70 GWh) of CEB’s total electricity requirement on Monday and not 10.68 per cent as was the case.  It’s this additional 8.98 per cent (3.75 GWh) of electricity obtained on Monday after burning the expensive diesel to generate electricity, instead of the cheaper electricity; that translates to a lost generation profit of Rs 78.99 million to the CEB on Monday alone and up to 16 days to Monday, Rs 692.3 million and from 16 September 2014 to Monday 19 September 2022, Rs 126.6 billion.

Consequently, CEB’s generation profits in the 16 consecutive days to Monday were reduced by Rs 692.3 million (13.84per cent) to Rs 5,285.74 million on a cumulative basis due to the malfunctioning NCFPP in the reference 16-day period. 

Computation of CEB’s above costs and income is based on data provided by the Central Bank’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 will have had enhanced CEB’s electricity generation profits and correspondingly, its generation losses as well, considering the current, high, oil prices.

CEB’s generation losses will have had been more, if CEB has been supplying uninterrupted power, unlike the record daily power cuts the country is subjected to, currently, because Sri Lanka is broke, having insufficient US dollars to import the required diesel and coal to provide uninterrupted electricity.

 Average CEB tariff rate last year according to the CBSL was Rs 16.37 a unit (kWh).  Calculations discount CEB’s transmission and distribution losses estimated at 8.72 per cent last year. According to the Central Bank’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 kWh) a unit followed by coal (Rs 10.68), “Other renewable energy sources 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).

Computation of generation costs/losses also discount NCFPP’s malfunction since the commissioning of its first 300 MW Machine on 13 February 2011,  to the interim period that transpired before the commissioning of its last 300 MW machine that took place on 16 September 2014, comprising another 1,310 days.

BY Paneetha Ameresekere