Unannounced power cuts throughout Colombo over the last few weeks may have gone unchecked by regulators and policy-makers alike, however new information has surfaced to indicate that consumers may have to pay twice the price for a unit of power if the treasury decides that the Ceylon Electricity Board bear the brunt of repaying a USD 1355 million loan obtained for the Norochcholai Power Plant.
“The CEB has calculated the cost of energy excluding the cost of repayment of the loan, hence the price quoted by them is Rs. 12 a unit of power however the actual cost with the loan factored in comes to Rs. 16,” a highly placed source told The Nation. “So far the treasury has been paying this loan but there have been discussions over handing it over to the CEB, in which case consumers will be taxed.”
According to the information, the Treasury is currently paying back a loan of USD 1355 (1.35 Billion) which it had obtained for the Lakwijaya Power Plant. “Many assume that the coal is cheap when the actual cost indicates a higher amount. So far consumers are indirectly paying for it through various taxes however if the CEB has to pay, it would be added in the form of tariffs and additional rates.”
If that is not all, the government has been relying on emergency power to cushion off the effects of inadequate supply on the national grid. During the first three months of this year, the Ceylon Electricity Board has purchased 190 Giga watts of power. A fresh estimate indicates that CEB currently purchasing 600 megawatt of energy power at the cost of Rs. 40 per unit.
Meanwhile, Dr. Suren Batagoda, Secretary to the Ministry of Power and Renewable Energy reportedly said that the it was due to drought during the first few months of the year promoted the CEB to purchase power from the IPPs.
He added that Hydro-power was limited to 10% of the total power supply hence a majority of the country’s demand for power had to be met by thermal power stations, most of which are privately owned.
CEB’s reliance on Independent Power Purchases has come under scrutiny after it was revelead that along with a monthly fixed charge, CEB also incurs a cost for a start-up and shutdown respectively. Compared to 2016, CEB had purchased 2173 Gega Watt of power at a cost of 61,376 million rupees, a 50% manifold compared to the previous year.
Analysts say that the government’s reliance on IPPs and purchasing of emergency power on such ad-hoc basis can only be restrained if the Least Cost Long Term Generation Plan put forth by the CEB is implemented in a timely manner.
‘The Least Cost Long Term Generation Expansion Plan is one of the most important plan in a nation as it plans the electricity generation for the country for the next 20 years to ensure energy security as the least cost plant mix for each year is identified by analyzing and evaluating various technology options. It serves as a guideline to facilitate the decision-makers in making decisions in line with national policy objectives, by exploring and evaluating various generation technology options in different situations,’ Damitha Kumarasinghe, Director General of Public Utilities Commission of Sri Lanka (PUSL) said.
The Sri Lankan power system had a total installed capacity of approximately 4018 MW by the end of the year 2016 with a total dispatchable capacity of 3538 MW, including non-dispatchable plants of capacity 516 MW owned by private sector developers.
The generation demand is expected to grow 5.9 percent per annum from 2018 -2022 while in addition the peak demand is expected to grow at 5.1 percent per annum, the data shows. The same expected to grow 4.9 percent per annum from 2018-2037 which the peak demand is expected cross at 4.5 percent.
According to the expected growth, it is identified that the grid should have an installed capacity of 4269 MW should in the beginning of 2018 and 10783 MW by the end of 2037, LCLTGEP data shows. The proposed energy mix for the next twenty years consist, major hydro, coal, pumped storage hydro, combined cycle, oil and gas turbine plants.
PUSL estimates that the total investment required for implementing the 2018-2037 plan in the next 20 years is approximately USD 14.568 Billion (LKR 2,168.93 billion). This sum however does not include the projects for which funds have already been committed.
PUCSL is currently considering comments and submissions to the commission regarding the LCTGP which is available on their website for public reference.
Those who are interested can submit their written comments/submissions to the Commission by post/fax or e-mail and even the comments can be made online at www.pucsl.gov.lk on or before 6th June 2017. Further, PUCSL will also hold an oral submission on 15th June 2017.