PUCSL to use standby generators in major businesses | Sunday Observer
About 3,000 MW idling

PUCSL to use standby generators in major businesses

20 February, 2022
Janaka Ratnayake
Janaka Ratnayake

The country is currently facing a crisis in the power sector. This is, however, not blamed on the Covid-19 pandemic.

Non-commissioning of major power projects for the past seven years, in keeping with the long term generation expansion plan of the Ceylon Electricity Board (CEB), is held accountable for the present state of affairs leading to scheduled as well as sudden power outages island-wide.  

The biggest share of the blame falls on the Yahapalana Government which failed to commission even a single major power project during their rule. The last major power project to be commissioned in the country was the Lakvijaya Power Plant in Norochcholai - the biggest power station in the country with a generation capacity of 900 MW. Planned in 1995, the construction of the Chinese funded coal powered thermal plant began in 2007 and completed in 2014 during President Mahinda Rajapaksa’s Government.  

Politically correct decisions

The Public Utilities Commission of Sri Lanka (PUCSL) maintains the power cuts experienced today were predicted as far back as in 2016. Consecutive governments have been forewarned. Overshadowed by politically correct decisions, the country may have to endure this hand to mouth situation in demand and supply further since for the next two years, no major power plant is planned to be commissioned.

PUCSL Chairman Janaka Ratnayake, explaining the current state of affairs, said the PUCSL will try to minimise the inconvenience caused to consumers by ensuring the power cuts will strictly reflect and for only to balance generation shortfalls and not political agendas of trade unions or other groups.   

The CEB prepares the long term generation expansion plan for 20 years.

According to the 2018 - 2037 long term expansion plan, the renewable sector target was 60 percent. But when the new President and Government took office after 2019, the generation policy focused more on renewable energy, with a target of 30 percent from conventional sources (which includes coal power) and 70 percent from renewable sources by 2030.

The new policy was gazetted after nine months. The PUCSL received the approval three months ago for action. 

The CEB was informed to revise the long term generation expansion plan in line with this new policy, to achieve the target of meeting 70 percent of the country›s energy demand from renewable sources by 2030, but the plan will cover the period from 2022 to 2041 as a whole. “It is almost an overhaul of the entire sector, not an easy task, and can›t be done overnight,” the PUCSL Chairman said. 

The CEB has been given six months from November 2021 to draft the new plan. The PUCL is monitoring the progress of this difficult task.

He said, “At this stage, the PUCSL cannot say if the old generation plan will be completely discarded or not. Once the new plan - consisting short term, mid term and long term proposals - is ready, it will be submitted to the PUCSL for approval in April.

Long term plan

The previous long term generation expansion plan was prepared in 2018. Every two years this is upgraded by the CEB, but for the last seven years (since 2014) major power projects envisaged did not take off, due to various reasons. 

When President Maithripala Sirisena took office in 2015, heeding protests by environmentalists, he scrapped one of the major power projects- the Sampur 500 MW coal fired thermal power plant- planned to cushion the annual over 100MW increase in electricity demand. It was to be commissioned in 2017. The project funded by India and JICA was stopped at the 11th hour. “If that 500 MW was added to the national grid, we would not be facing this crisis today,” Ratnayake said.

According to him, the PUCSL forecasted the current crisis way back in 2016. “We have warned consecutive governments about this impending situation. It was conveyed that if new major projects were not commissioned in keeping with the Generation Expansion plans of the CEB,  there will  be power cuts by 2022 and 2023.

The crisis facing Norochcholai was also anticipated, as well as the limitations in the hydro power sector. Given that no major power plant is to come up within the next two years, the stakeholders have a big task to manage the resources - conserving energy will be a catalyst to overcome this crisis.

Unless the consumers, the Government and the private sector collectively contribute, the country will face a serious issue in the next 2-3 years, especially during the dry season.

The proposed smaller power projects of up to 10MW can be expedited, but Ratnayake was of the view that such projects will not resolve the current issue. The PUCSL has given approval to build two LNG plants with a capacity of generating 300MW each. These projects will take 3-5 years to complete. He said, “If the emphasis is on renewable energy, we need to add 3,000 MWs within the next 10 years. The yield will be 1,500 MWs and it will meet 50 percent of our energy needs during the day time.”

New hydro power projects were also held up due to various reasons, mainly, due to political and trade union issues. The PUCSL is also looking to work out a plan to purchase power from private entities as an immediate solution, to face this crisis without going for lengthy power cuts.

Standby generators

“Major Government institutionssuch as the Ports Authority, SLT, niversities of Moratuwa and Colombo and private sector entities such as Shangri La hotel, garment factories, major apartment buildings own standby diesel powered generators.” According to calculations, about 3,000 MWs of power is just idling like this.

The PUCSL is discussing if 300MW of this could be added to the national grid during the peak time for the next two months or until hydro power generation stabilises, to avoid nationwide scheduled power cuts. The CEB will pay Rs.36 per one unit of power for the owners of the diesel generators.

Some stakeholders are not completely convinced that it is practical, but we think it is a workable plan during a crisis.

The Government will have a plan to import diesel.

We don’t perceive oil shortages in the future. Thus the oil for the generators will be there. The issue with the CEB is that they don’t have money to buy oil in bulk to run the thermal plants.

However, the CEB will have to manage their cash flows and make funds available to pay private generator owners. According to PUCSL, the CEB earns Rs.600 - 700 million revenue per working day. 

Companies can afford diesel. The PUCSL has instructed the CEB to remove consumers with standby generators from the main supply for four hours during peak time. He said this is a better arrangement than going for nationwide power cuts which will affect everyone, and a major blow to small and medium term businesses.

In 2014, the electricity tariff was reduced by 25 percent and for the past seven years it has stayed put despite dollar fluctuations and inflation. 

Sole authority

Ratnayake said, “The PUCSL is the sole authority to decide electricity tariff. The Commission is independent and the commissioners are empowered to take decisions.

We approve the long term plan; decide on the tariff, and power cuts,” adding that, “I’m happy to say that there has been no political influence on the Commission”.

The cost of generating a unit of electricity is Rs. 22, but the selling rate now is Rs.17. During the height of the pandemic, the electricity supply was there for people to connect with the outside world. Yet outstanding dues by consumers to the CEB have accumulated and are over Rs. 50 billion.

“At this crucial time, the consumers must help by conserving energy, and paying their outstanding bills,” he said, adding that this is the only way to avoid power cuts.

During the past 45 days, the PUCSL intervened and stopped long term power cuts. Power shedding in isolated places was effected to stabilise and balance the supply and demand. The PUCSL is hoping to continue this arrangement. However, on Friday, the PUCSL announced scheduled power cuts once again.

The power regulator said it expected consumers as well as state institutions and local authorities would reduce power consumption during this crucial two month period.” The Municipal Councils should also limit burning their half a million lights every night and consuming 55 MW of power a day,” he said.

“Power cuts will be solely based on data and not on other external factors,” Ratnayake said, adding that the Commission had managed to prevent emergency power purchasing for the past five years.

“Over 70 such attempts were shot down by the PUSCL since 2015, thus saving more than Rs.577 billion for the CEB. There were even attempts to bring in barge-mounted emergency power by some ministers. The Cabinet endorsed some of these attempts, but the PUCSL has been firm in the past and it will continue to play this role in the future as well,” he said.