CEB: Making losses or deliberate blunders?
In mid February, the Ceylon Electricity Board (CEB) informed consumers of their intention to revise their electricity charges from the following month. The March electricity bill issued to the consumer by the meter-reader was based on previous rate. The April bill based on revised rates with the addition of fuel surcharge for March was sure to shock the consumer.
When observed carefully, comparing the rates charged (monthly charge divided by the units consumed), for consumers over 300 units, the April unit rate is 45.8% over the January rate.
The electricity consumers received another shocker in the May bill (delivered in mid-May). For the consumers who settled the meter reader’s March bill in April, the May bill came with a red notice, informing them of three days time for the settlement or face discontinuation of power. If disconnected, reconnection charge would be an additional Rs. 800. The red notice was issued for the non-payment of the fuel surcharge for March, which was only indicated in the April bill and interest surcharge for non-payment.
CEB has since commenced an advertising campaign requesting the public to reduce power consumption and promises free power for one month, for a reduction of power consumption of 20%. The promotion to reduce power wastage is commendable, but the current promotion timed for when consumers receive their enhanced April electricity bill is a political gimmick.
The Minister for Power and Electricity and the CEB explained that the revision of electricity tariffs was necessary due to the reduction of hydropower generation under the prevailing drought conditions and the need to fill the power gap with expensive thermally-generated power.
With the constant rise in power consumption and as the quantum of hydropower generated remains more or less constant, the argument makes sense. But is it the complete truth? This article attempts to look into various aspects of power generation in the country.
The CEB claims Sri Lanka’s high power costs are due to:
Insufficient rains to produce hydropower
Increase in price of fuel in the world market used for power generation
The non-construction of the Puttalam (Norochcholai) power plant as originally planned
Insufficient rains
Sri Lanka has been fortunate to have good weather conditions for power generation during the past decade (with minor variations) and the last drought was experienced in 2002. The dry conditions experienced in Colombo during January to March are normal for the period.
The talk of insufficient rain for power generation is nonsense. Meanwhile, Indian weather specialists forecast normal rainfall for South India and Sri Lanka during this year too.
Rise of fuel prices
With the gradual exhaustion of oil, gas and coal reserves in the world, increase in fuel prices are inevitable and the CEB needs to plan accordingly. The CEB blames the shortage of fossil fuels, but we are yet to see long-term planning by the CEB for such a future.
Coal-fired power plant
In the 1980s, having completed the Accelerated Mahaveli Project, with the country’s power requirements rising, the need for additional power was discussed and the necessity of a coal-fired generating plant was accepted; the problem was the location.
The most suitable location was identified to be Trincomalee, but due to the then-prevailing ethnic problems, the Trincomalee site was considered unsafe.
Mawella/Kudawella
While investigating alternate locations, the CEB came across Mawella/Kudawella near Tangalla in the Hambantota District.
Eng. Carlo Fernando – the former Power Development Consultant to CEB – at a public seminar on 8 July 2000 on ‘Coal Power as the Only Alternative’ organised by the Institute of Engineers said: “I examined Mawella in the 1980s and found Mawella Bay, a natural harbour with nearby deep sea, capable of allowing large coal ships of 60,000 dwt to be handled. The site was confirmed by Sir Alexander Gibbs & Partners, world recognised consultants. The site turned out to be superior to Trincomalee for a medium-sized coal power plant and Mawella was considered an excellent site for a coal power project.
“Shortly after suitability was declared, demonstrations were held at Mawella by locals, against the coal power plant, that they would be expelled to make way for the project. It was later learned that the demonstration by the locals were instigated by some external parties who misguided the locals. President Premadasa, upon hearing that the location requires the re-settlement of a large number of houses, without investigation in depth, did not favour the idea and ordered the CEB to look for another location.”
Later, the local Pradeshiya Sabha passed a resolution requesting that the power plant to be located at Mawella and they would assure fullest cooperation, but the CEB was not interested.
Norochcholai
When President Premadasa rejected Mawella, the Secretary to the President, Paskiaralingam, appealed to the Japanese Government for help, resulting in the Japan Consulting Institute conducting feasibility studies. They recommended the location of the power plant at Dungalpitiya in Negombo or Norochcholai.
Studies showed that construction costs at Norochcholai would amount to US$ 2,279 /kw vs. Negombo at US$ 1,880 /kw, costing an additional cost of US$ 120 million for the 300 MW plant at Norochcholai. The sea at Norochcholai being shallow would require a four km long unloading jetty. But the CEB selected Norochcholai in spite of all opposition.
The greatest opposition for locating the plant at Norochcholai came from the Bishop of Chilaw, who opposed the project claiming the dust from the power plant would damage the Church and he was able to delay the project until President Mahinda Rajapaksa decided to go ahead in 2004.
Misguidance of Government
Having misguided President Premadasa, the CEB conveniently dropped Mawella out of the way. Even after the demise of President Premadasa, with continuing opposition from the Bishop of Chilaw and others, the CEB did not consider it to be prudent to reconsider Mawella, or even Negombo locations.
During Chandrika Kumaranatunga’s tenure, for well over a decade, the CEB was quite happy to pass the ball over to Government and waited for a decision over Norochcholai.
Since the late 1980s, while the location of the proposed coal power plant was under debate, the CEB promoted oil-based generating systems. Apparently the policy was to invest in diesel-based electricity, the most expensive power-generating fuel. These power plants owned by the CEB as well as private companies produced electricity at a high cost, part of which was passed over the consumer and the CEB’s losses piled up.
While the fuel prices climbed and it was apparent that the country was leading for highest electricity charges in Asia, Norochcholai was still without a decision and the CEB did not consider it necessary to reconsider other power plant locations.
Over the years the CEB purposely neglected to carry out further feasibility studies on Mawella, Negombo or other possible locations. This led to a situation where, even if the Government wished to consider urgent implementation of any other location, preliminary studies alone would take years extra, a ploy employed by the CEB throughout.
It was only when President Mahinda Rajapaksa wished to take a decision on Norochcholai did the CEB present him the complete picture on Norochcholai, Mawella and Negombo, including relocation of affected persons, construction and running costs and the resolution passed by the Weeraketiya Pradeshiya Sabha agreeing to locate the project at Mawella. If President Rajapaksa was made aware of the complete situation, the President would have certainly selected Mawella.
Power generation capacities
Sri Lanka’s current power generating capacities are as follows:
Hydro-power Location and capacity MW
- Upper Kotmale: 150
- Kotmale: 201
- Victoria: 210
- Randenigala: 126
- Rantembe: 50
- Ukuwela: 40
- Bowatenna: 40
- Old Laxapana: 25
- Old Laxapana: 25
- New Laxapana: 100
- Polpitiya: 75
- Canyon: 60
- Wimalasurendra: 50
- Samanalawewa: 124
- Kukule: 75
- Uda Walawa: 6
- Inginiyagala: 11
- Total: 1,368
- Small hydro-power: 201
- Total hydro-power: 1,569
Thermal power generation
(CEB owned)
- Puttalam: 300
- Kelanitissa (GT): 100
- Kelanitissa CC: 165
- Kelanitissa (GT 7): 115
- Sapugaskanda A: 80
- Sapugaskanda B: 80
- Chunnakam: 36
- Total: 876
Privately owned
The CEB has signed power purchase agreements with Independent power producers for 10-to 20-year periods under build, own and operate basis.
- ACE Embilipitiya: 100
- ACE Horana: 20
- ACE Matara: 24
- AES Kelanitissa: 163
- Agrico Jaffna: 15
- Asia Power, Sapugaskanda: 51
- Colombo Port: 60
- Heladanavi, Puttalam: 100
- Lakdhanavi,
Sapugaskanda: 22.5
- Yugadhanavi,
Kerav-alapitiya: 280
- Total: 835.5
- Total thermal: 1,711.5
Small hydro-power projects
During the colonial era, tea and rubber factories in the hill-country had over 400 small hydro-power generation units that supplied the bulk of their electrical power needs. In the 1970s with the commissioning of the power stations around Laxapana, CEB encouraged the factories to close down these small generation units.
During the 1980s Premasiri Sumanasekara who introduced locally made cheap school mini-labs under Vidya Silpa, re-commissioned some of these abandoned power plants. With the knowledge and experience gained, he was responsible for the first private hydropower generation unit at Dick-Oya with a capacity of 1 MW and supplied power to the CEB.
Presently over 20 private sector companies are engaged in small hydropower projects and supply over 201 MW of power to the national grid. It is estimated that Sri Lanka’s capacity under small hydropower is over 500 MW and nearly 50% is under current development. Presently the private sector is permitted to develop power projects up to a total installed capacity of 10 MW per project.
Today, Sri Lanka’s private sector has reached a high level of technical capability in the design and construction of small power plants and some companies have already ventured outside Sri Lanka and completed similar power plants in Africa.
Bio energy
Electricity could also be produced with municipal waste, agricultural waste, fuel wood, etc. Power generation using municipal waste had been talked for decades, but nothing concrete has happened.
In agricultural waste, the Tokyo Cement Factory in Trincomalee has a power generation plant of 10 MW capacity, fed on paddy husk, for their internal use. There are number of small power plants using gliricidia wood as raw material produce electric power and some plants have been in operation over a decade, with a number of plants under construction.
The Bio Energy Association of Sri Lanka promotes the replacement of fossil fuels with dendro power-plants, fed on locally-cultivated wood species. They claim 50% of imported fuels could be replaced by dendro-power, fed on cultivated gliricidia on 176,630 Ha of land at an establishment cost of production facilities at Rs. 1,767 million and will bring a foreign exchange saving of Rs. 60,401 million per year (data based on 2010 prices).
They also claim that the replacement of 10% of fossil fuel imports with bio fuels would benefit employment of 50,000 farmers contributing to the rural economy with Rs. 2,000 million per year and will save foreign exchange US$ 72 million a year.
With the exhaustion of locations for small hydropower plants within the next five to 10 years, the hydropower companies with their acquired knowhow will be forced to move towards bio energy production. With the increase in fuel costs in world market and the exhaustion of fossil fuels, Sri Lanka will have no other option.
Wind and solar power
Wind and solar power are highly acclaimed throughout the world as the best form of energy causing the least pollution and is free. But both depend on the presence of sun or wind, neither available uniformly nor throughout the day.
Both wind and solar power require large areas of land, depriving them for any future use. Technologies and equipment for both are imported from developed countries and are very expensive, with low local and running costs. Sri Lanka cannot be expected to master their knowhow for a foreseeable time, making it unsuitable for the country.
Currently the Hambantota wind farm owned by the CEB has a production capacity of three MW and the Puttalam farm a capacity of 10 MW. A number of private wind farms are under construction. Buruthakanda Solar Park under construction near Hambantota is to produce 1.237 MW of power.
Power from Mahaveli waters
My last article on ‘waste of Mahaveli Waters’ published in the Daily FT discussed how, with the construction of the Polgolla Dam, the Mahaveli water was diverted to fill Kalawewa and Rajangana Wewa.
Diverted waters at Polgolla produce 80 MW and the non-diverted waters are capable of producing 386 MW of power. Thus for the production of electrical power, the most profitable option would be to divert only the absolute minimum quantity at Polgolla, allowing the majority of water to be used for power generation.
The quantity of water diverted from the Mahaveli is vastly beyond the requirements of paddy cultivators, to the extent that when rains arrive, tanks in Anuradhapura District overflow creating floods, as tanks were already filled with Mahaveli water.
In reality, for the best part of the year Victoria Reservoir remains practically empty, producing only a small fraction of the electricity capable of generating. But Kalawewa is kept substantially full almost all the time, a situation existing even today.
Power generating capability
Sri Lanka’s maximum power generating capacity is hydro 1,368 MW, small hydro 201 MW, thermal 1,711.5 MW, solar 13 MW and bio energy and wind at 15 MW. These capacities could vary slightly, but the overall installed generating capability is nearly 3,200 MW. The CEB has informed that the highest power demand was noted on 21 March 2012 at 1,955 MW due to a hot spell.
The country’s total hydro-power generation capacity, along with small hydropower, totals 1,569 MW. This means theoretically, the country’s hydropower generating capacity can meet 70% of maximum power demand of the country. The CEB should attempt to bring the practical generating capacity close to the theoretical amount and balance to be obtained with the thermal power. CEB’s claim that hydropower capability is less than 30%, if true, indicates the extent of mismanagement.
Manoeuvring of power situation
For decades some senior staff in CEB at commanding positions have been deliberately driving the organisation away from cheaper ways of generating electricity, towards usage of the expensive thermal power.
The sabotage of the installation of first proposed coal-powered plant at Mawella, selection of the more expensive location at Norochcholai over Negombo and continued sit back attitude when Norochcholai was opposed confirms the statement.
Controllers of the Polgolla Dam, by diverting excessive quantities of water, created an artificial shortage of water at the Victoria Reservoir over the years. This manoeuvre disrupting power generation was calculated to sabotage the possible implementation of Victoria Stage II, capable of generating further 210 MW of power.
Who benefited?
The above shows that Sri Lanka’s electricity power generating capacity has been deliberately kept under stress. By delaying the construction of first coal power plant, the power generating capacity became insufficient, new power plants were required urgently and the contracts were awarded to Private Power Developers (PPDs). While the Government failed to finalise the coal powered plant (for which the CEB too was responsible) for decades, the situation was manoeuvred to award contracts to PPDs.
When larger and larger amounts of Mahaveli waters were diverted to Kalawewa, power generation dropped and the balance requirement had to be supplemented with increased power purchases from the PPDs.
Throughout the entire fiasco of power shortages, a fact emerges. Certain senior staffs of the CEB in decision making positions have deliberately and continuously over the decades manoeuvred the power shortage situation in the country to the benefit of PPDs, resulting in the current higher tariffs and losses to the CEB, which the consumer is forced to bear.
(The writer is a Chartered Civil Engineer who graduated from Peradeniya University and has been employed in Sri Lanka and abroad. He was General Manager of State Engineering Corporation of Sri Lanka and left the position in February 2010. He is presently employed at a Chinese construction organisation. He also ran a manufacturing and a sales organisation for over a
decade.)
