Country to Return to Diesel Power through Business Plans?

CEYLON TODAY | Published: 2:00 AM Aug 3 2021

In 1983, 100% of the country's electricity demand was generated from hydropower based renewable sources and currently 40% of our electricity generation is generated from renewable sources. The CEB prepares its plans according to the country’s approved energy policies, and our target is heading towards a ‘Net-Zero Carbon Status’ by 2050.

At present, the total capacity of the large hydro power plants connected to the system is 1351MW, and another 35MW Broadlands hydro power Station is scheduled to be commissioned in September this year and 120MW Uma Oya hydropower station is to be commissioned in the first half of next year. After that we are left with only Variable Renewable Energy sources such as solar, wind and mini hydro power stations. As at now, the amount of variable renewable energy (VRE) added to the system, such as solar, wind, min hydro, and biomass is 1188MW, and the total renewable energy (RE) in the system with large hydro power plants is 2539 MW. (This is 56% of the total installed capacity). Another 350 MW of solar and wind are under construction. Sri Lanka, being a country which does not have interconnections with other countries’ networks, adding variable renewable energy should be done in a very planned, gradual and steady approach. Even at present Sri Lanka remains at a top level in Asia as well as in the world.

According to the long-term generation expansion plan (LTGEP) prepared for period 2022-2041, by 2030, another 2674 MW of solar and 1113 MW of wind are planned to be added to the system. Adding such a variable renewable energy (VRE) target to the power grid requires large investments and is a planned target in developed countries and making such an investment in such a short period of time is a major challenge for a country like ours given our size of the economy. For a small electrical grid like ours that does not have interconnections with other countries, for a massive generation of VRE through solar available only during day time and through wind with variable nature, the GOSL will have to invest billions of USD upfront to upgrade existing electricity network, to add large battery storage of 1000-1500MW and pumped storage hydro and to develop Smart Grid technologies. CEB has already made above plans, which is a target to go to the current situation in Germany that requires the Government to provide the necessary allocations.

We should go for a target like this in a very planned and steady manner. We definitely need some low cost firm energy power stations to keep the system stable, to provide electricity at night, and to provide electricity at lower prices. Accordingly, by 2030 in our new plan, 1350 MW of LNG fed power stations are to be added. Also, the existing diesel power plants at Kelanitissa and Kerawalapitiya are being converted to LNG. For this, we have formulated policies and plans to bring LNG to our country and are working accordingly. Sri Lanka needs an energy mix for energy security as envisaged in the approved energy policy in the country; hence, another 300 MW an extension coal plant is planned to be added to the existing Norochcholai power station. The next lowest unit cost of generation after hydro is coal power.

We are always in crisis due to non-implementation of plans and burning of diesel

We have lost about Rs 900 billion due to diesel burning for the non-construction of Norochcholai during the planned period. This was also due to the reckless decisions of the former President of our country from 1994 to 2005. CEB was in a huge financial crisis until the construction of Norochcholai during the period 2010-2015. Until then, in addition to low cost hydro power plants, electricity was supplied from high cost oil power plants.

The then Government also reduced the electricity bill to benefit the people from the construction of the Norochcholai power plant. A few years later we were in a good financial position but in 2016 the country lost the benefit due to stopping the construction of the Sampur power plant. At the same time the loss due to the increase in diesel consumption increased to around Rs 200 billion in five years. All these are due to the reckless decision of the former President of our country during the term 2015-2020.

We have been building power plants that can run on LNG since 2010 but continued to burn diesel due to lack of LNG. We have burned hundreds of billions of rupees worth diesel due to unavailability of LNG on time. In the last two decades alone, the loss from burning diesel for power generation due to non-implementation of plans and wrong decisions alone is more than half of the amount allocated to our country's budget in 2021.

At a risk again

Some parties with vested interests want to push this country to the point where electricity is curtailed to the public for hours a day resulting in the Government to heavily depend on diesel power plants at very high costs and they can be brought in a short time though they are expensive. After that, these vested groups know that they can ask for a higher price for the electricity they sold to CEB citing the higher price of diesel.  So, these groups want to push the power sector towards the crisis.

Will the construction of low-cost power plants stop due to policy changes from time to time?

A country that wants to develop must formulate an internal policy that suits that country and move in a planned and steady approach. Changing policies from time to time can disrupt ongoing projects and push us back into crisis.

If we implement the 2022-2041 Long-Term Generation Plan, by 2030, 53% of our country's electricity demand will come from renewable energy sources and 70% will be generated from clean energy which is carbon minimised energy sources. As all our potential hydropower plants will have been harnessed in a very short time, we will have to go for this target from the variable renewable energy sources such as solar and wind (VRE), which is a big challenge. Despite such a challenge, there are signs that the Government is preparing for another policy change. Such decisions will only halt the construction of low cost power plants and related projects and bring the country from bad to worse.

Will the active tender for the purchase of LNG be disrupted?

With the intervention of the President, Cabinet approval has been obtained to formulate a policy that suits the country regarding the preparation of LNG infrastructure and how to purchase LNG. The need for LNG to generate electricity in the country has been there for almost a decade, but the Governments that have been in place have not acted in a proper manner and the use of diesel for LNG-powered power plants is one of the main reasons for the current crisis in the power sector. Accordingly, after an 18-month feasibility study sponsored by the Asian Development Bank, tenders were called in February to procure the country's required LNG infrastructure (FSRU and pipelines) and the tender was opened on 25 June.

During this tender process, the Ministry of Finance unexpectedly entered into another agreement with an American company to obtain the LNG required for our country with the approval of the Cabinet of Ministers, and as a responsible trade union we strongly condemn this. As a result of this action, the systematic process of obtaining the proper supply of LNG to our country without delay is at risk. 

CEBEU as a responsible trade union is on high alert on the tender process that should be carried out in accordance with the policy of obtaining the required LNG for the country in a transparent manner and if any irregularity is observed CEBEU will not hesitate whatsoever to take all possible actions as a trade union.

Engineer’s Union - Ceylon Electricity Board

CEYLON TODAY | Published: 2:00 AM Aug 3 2021

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