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The Government has been accused of continuing with sporadic power failures despite the past achievement of putting an end to the unending power cuts. Despite the generation capacity of power of around 1.6 GW, of which nearly 70% comes from hydro and remaining from thermal power, an occasional 'black out' does remind us that the Ceylon Electricity Board (CEB) is the same monolithic giant, which had transformed efficiency and profitability into ineffectiveness and rampant escalation of costs.

It is an enterprise, which reeked with corruption and inefficiency aggravated by a top management, which did not have a grasp of the priorities in terms of power generation for the major programmes under the "Regaining Sri Lanka" initiative. The objective of the plans for power generation is that "the system should meet the demand at least cost with adequate reliability", with a ceiling on such energy availability at 6 US cents per unit per consumer. By far most of these shortfalls were met by the mini hydro projects and through private thermal plants, which resold its electricity to the CEB.

While it is necessary to maintain the present generation capacity of the CEB in its long term generation plan for the period 2002 to 2016, it embodies the following:

(1) 1,500 M.W. to be generated through coal fired plants.

(2) 628 M.W. combined cycle and 280 M.W. through gas turbine generated using diesel.

(3) 62 M.W. diesel plants running on furnace oil.

(4) 210 M.W. hydropower through the commissioning of the Kukuleganga and Upper Kotmale Projects.

Bids have already been called by the CEB for the 300 M.W. Kerawalapitiya project on a BOO basis. While the site for the coal power plant, which was planned for Norachcholai, has now been transferred to Trincomalee. Pre-feasibility and feasibility studies on Trincomalee and Hambantota have and will further postpone the lead-time for commissioning of the coal power plant.

Such delays had been endemic since 1994. This raises two significant questions.

1. The affordability of energy for e.g. the CEB Statistical Digest of 2001 provides the following figures. On this basis it is extremely doubtful whether the consumer will receive the final benefit of being billed under US .06 cents for each unit.

2. While on the other hand accelerated industrial development which has been planned cannot accommodate the rapidly rising electricity prices.

To provide electricity at the lowest possible cost per unit, power should be available in the range of 04 to 05 US cents. The status quo on the coal powered plants is that a feasibility has to be done by the Government of Sri Lanka (GOSL) using the Technical Development Assistance (TDA) available from the United States. While Mawella is not an option now, Trincomalee and Hambantota are subject to site reconnaissance studies which are to be completed by October 2003. Request for proposals (RFP) on the coal plant to be invited/proposals evaluated by February 2004 and projects awarded by November 2004 with forceable commercial operation in late 2008, if the project proceeds without setbacks.

The progress to-date is somewhat slow. Kukuleganga hydro power project with a capacity of 70 M.W. has only neared the half way mark, with only a generation of 35 M.W. within this year. While the bidders for the 300 M.W. Kerawalapitiya combined cycle plant are still grappling with the RFPs. While consultants are being appointed and invitation for tenders for preparatory work is still proceeding in respect of the 10 M.W. Upper Kotmale Hydro Power Project.

Energy efficiency

The loss in transmission and distribution is believed to be around 20% which compared to neighbouring countries and Southeast Asian nations is very high. In Africa transmission losses amount to a mere 5%.

This places the country in a very unfavourable situation. The tariff comparison of Sri Lanka with neighbouring countries can be seen in Figure (1). The CEB seems to be operating with scant regard to transparency, with little or no business focus or any plans for efficiency improvements both in its management and in reducing transmission losses and runaway overheads. Such disadvantages reduces competitiveness of the board.

Restructuring has to address, most of these issues. On the positive side the GOSL has gazetted the Electricity Act and appointed the MAC and have tabled plans for reducing cross subsidies. Figure (2), indicates the existing cross subsidies used by electricity consumers.

Rural electrification

The percentage of un-electrified houses is 40% as against the electrification of just over 60% of households. There are 18,000 electrified villages in the country, of a total of 38,000 villages. The electrification level can be seen in Figure (3) where urban electrification is 80% of the households while rural electrification is in the region of 40%.

Rural electrification assumes importance because industries have to be regionalized, while the Economic Processing Zones (EPZ) are themselves to be regionalized. Of a target of 200,000 new connections to households we have achieved only 50,000 new connections to date, which is costing the CEB an average of Rs. 38,500 per consumer.

The present priority areas for rural electrification are Central Province, North Central, Southern and Sabaragamuwa Provinces. While Uva, Northern, Western and Eastern provinces are also on the cards for electrification under donor funded programmes. Long term power planning seems to be re-visiting options every year and requesting for proposals and conducting impact studies with little or no progress in the acceleration of any of these long term projects. For e.g. the generation expansion sequence based on demand forecast for 2004 to 2012 is as follows:-

The history of long term power planning has been one where the CEB has called for feasibility studies and impact studies and request for proposals and given deadlines in an eternal cycle of pushing back the commercial operations of such plants with dire consequences to local power generation, industrial development and domestic users. The Ministry of Power and Energy cannot watch this situation from the sidelines as it is ultimately responsible for the outcome. The Energy Supply Committee (ESC) cannot hold back approvals ad infinitum. This has to stop and the Minister and the ESC has to take CEB by its boot straps to quickly move up the implementation schedules.

Coal power plant

The Steering Committee on Power & Energy has decided on a coal power plant of 300 M.W. capacity to be developed initially at a site capable of accommodating 900 M.W. and if possible commissioning the plant in 2008. The project will be on a BOO/BOT basis. The estimated cost of generation is 04 US cents.

Though the Economic Policy Committee of the Cabinet decided in May 2002 on the site to be Trincomalee, the current thinking is that the GOSL should look at multiple sites particularly Trincomalee and Hambantota.

The USTDA to be used for conducting feasibility and impact studies with possible award of contracts in early 2004 and completion of the project by 2008. The travesty of coal fired power generation is that the "Diesel Lobby" has indirectly come to depend on the numerous thermal mini power (BOO) plants, which is presently contracted to the CEB.

There are blue chip companies with heavy stakes in this power sector dependent on the revenue streams with little or no regard to the increasing costs, which is burdening the consumer. Even if the CEB chooses to depend solely on CCGT and hydro generation, there is no way in which electricity prices could be brought down to desired levels. Under such a scenario accelerated industrial development, particularly regional development, will turn into fiction rather than reality.

A particular vendor who has lobbied GOSL from the very early stages and offered to construct a coal plant on a BOO basis for generating 600 M.W. power at a guaranteed cost of 04 US cents per unit and completion of the impact study within 03 months has been ignored. In addition this vendor is willing to do his own impact study and feasibility at their cost, thereby enabling the GOSL to use the TDA for the preparation of RFP documents, technical evaluation and negotiations up to the award of the contract, saving money and time.

It is time the CEB drops its imaginary deadlines and singing to the tune of interested vested elements and bring about objectivity to the assessment of the coal plant and not waste time in implementing the programmes which are already in hand with guarantees of producing power at the level of cost recommended by the consultants. The Minister of Power and Energy who kept his promise on eradicating the 'eternal power cuts', has to save his reputation by being decisive on this particular issue of the coal plant, where the most feasible route, appears according to all rational standards, for CEB to partner the vendor who has come up with the most cost effective proposal.

Saladin

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