Increase Of 8% In Electricity Prices And Its Drastic Consequences
The Power Minister states that the average selling price of electricity per unit is Rs. 13.50 and the average cost price is Rs. 17.50. As such with a 8% increase in the average selling price, the price will increase to Rs. 14.58; this increase is only about Rs. 1.0 per unit. It can be seen that even with this increase there is a loss of Rs. 3.0 per unit, and since the CEB and the independent power producers would have generated a total of about 11 billion units for 2010 as such, in 2011 even with this 8 % increase there is a loss of over Rs. 33 billion and this would increase annually by more than 8% as our GDP growth is 8% and thus electricity growth will be over 8%.
The annual additional growth of electricity will by 2012 be 1.8 billion units and this additional 1.8 billion should be from low cost coal or nuclear as the Power Minister himself states the price per unit from coal is about Rs. 7.50. If the Public Utilities Commission makes public the cost per unit from the much hyped electrical projects like Solar, Kerawalapitiya, Upper Kotmale, Wind Power, Mini Hydro, Dendro, it will be seen that all these are white elephants when compared to the price per unit from coal Rs. 7.50.
The prices are per unit respectively can be stated, starting with Solar, about, Rs. 70, with Plant Factor (PF) 25%, Kerawalapitiya Rs. 30 per unit with PF 70%, Wind Rs. 18 with PF 30 %, Mini Hydro Rs. 12 with PF 40%, Dendro Rs. 12 with PF 30%. Also with particle pollution, correct accurate values could be obtained from the Public Utilities Commission (PUC) but they with all their heavily paid consultants and engineers have consistently avoided giving answers to these and similar questions raised. They appear to be thinking that their statutory duties are to protect the Power Minister and the Power Ministry even to the extent of contravening our fundamental rights by permitting cross subsidies, for why should any consumer pay more than Rs.19 per unit when the cost to CEB is Rs. 17.50 per unit while the PUC’s main duty is to give licences for only economic power. As such their reference should be the cost per unit from coal and licences should not have been given to all the above white elephants stated above.
It should also be noted that whenever the Plant Factor (PF) is below 50%, to firm it up the very high cost oil powered electricity is required. As such the obvious remedy is to change the attitude to coal power by the Minister and go for accelerated coal power BOT projects which may bring super critical temperature and pressure boilers and turbines which are 30% more efficient and therefore there is a 30% reduction in Green House Gas Emissions, thus also replacing the electrical white elephants; the electricity produced by oil and others of which there are about 6.5 billion units per year.
The PUC, the Power Ministry and the CEB appear to have forgotten that the Mahinda Chintanaya promotes the very economical coal, and one of the first things Mahinda did after being elected as President in 2005 was to kick start the much delayed, cancelled and loan returned Norochcholai Coal Power Project. If this policy was carried out by the PUC, the CEB, and the Power Ministry they should also have immediately negotiated for a BOT coal power project at Hambantota, where negotiations had almost been completed for a IPP Coal Project when that government was dissolved in 2004, then it would have enabled the CEB not to contravene their statutory duties which are given by the CEB Act Section 11 (for economical power and stability), Section 38 (for loss free operation and also having a margin for development); these two statutory duties can also be obtained by visiting www.ceb.lk.
If it is forecast that we will not reach saturation before we reach the allowable limits to us of green house gas emissions which may be after about 7000 Mw coal power stations or more, then we should well in advance plan for nuclear power and our plan should be that coal power and nuclear power should be the base load and economical hydro with large reservoirs should be the peaking power which will give us one of the least costing electricity supplies in the world and then and only then can we the people be able to have a low cost of living, making use of low cost electricity for cooking.
All our transport costs will come down to about a sixth of the present cost by having electric trains, electric trolley buses, fully electric cars with battery changing stations and thus the necessity for the worst polluter — the oil refinery — will be no more and may be closed down. In the meantime the PUC should remove the unfair cross subsidy which may not even be legal, as why should anybody be forced to pay for others which contravenes our fundamental rights?
If any type of consumer is to be subsidised the government should do so; then it will be found that our industries will have to pay only Rs. 14.50 per unit in spite of the 8% increase which may be less than what our Industries are paying at present, and that they need not close down and relocate in another country. It will be of interest to the people if the PUC could publish the average cost per month of each of the 100 ministers who are getting free electricity, so that we the people can judge how conservatively the ministers use one of the highest costing electricity supplies in the world. The people can then see how genuine our politicians are for they are lecturing to us to tighten our belts which have no further room to tighten for the sake of development while they have more than ample room to tighten.
Eng. M.V.R. Perera
Bsc.Eng (Cey), Dip.EE (Lond), CEng FIET (Lond), FIE( Sri Lanka)