CEB Spends Billions To Purchase Power From Private Plants

by Ifham Nizam

The power generation cost for the year 2017 is 187 billion rupees which include the cost of thermal plants operated by the Ceylon Electricity Board (CEB), the Hydro plant operated by CEB, Private Thermal plants, and renewable energy comes under the purview of the Board.

In the light of this, CEB has published their 20 year least cost long term generation expansion plan for the period 2018 to 2037.

Experts point out Sri Lanka’s Ceylon Electricity Board (CEB), the biggest electricity utility has faced various issues in time and often called as a white elephant and tax eater.

However, experts point out that the surprising factor is that it has not been questioned by the policy makers over the losses that it makes to the nation’s economy.

CEB purchases power from private thermal plants annually to match the growing demand of electricity. However, these purchases are made without providing a proper mechanism and procedure.

The Sunday Leader learns CEB purchase power from Asia Power at a unit cost of 27 rupees, ACE Kalanitissa at a unit cost of 22 rupees, ACE Abilipitiya at a per unit cost of 21 rupees and West Coast at a unit cost of 26 rupees. Adding to that a monthly fixed charge should be paid with or without purchasing power from these plants. The plants are paid a start-up charge and a shutdown charge whenever CEB decides to get power from the plants. Officials told The Sunday Leader that CEB has purchased 2173 Gega Watt of power at a cost of 61376 million rupees in the year 2016 from Independent Power Plants (IPPs) or Private Power Plants (PPPs) which are almost a 50 per cent increment compared to the private power purchases of 1228 Gega Watt of power at a cost of 39551 million rupees in the year 2015.

Apart to that CEB has purchased 364 Gega Watt of power as emergency power from private plants at a cost of 8480 million rupees in 2016 which is about four per cent of the total energy cost.  “This cost is passed to the poor tax payers,” an official pointed out.

Power and Renewable Energy officials say that the monopolist CEB also has purchased about 190 Gega Watt of power for the first three months of this year (2017).

Experts are of the view that not implementing the long-term generation expansion plan in a timely manner has paved the way for this situation. In the light of this, CEB has published their 20 year least cost long term generation expansion plan for the period of 2018 -2037.

Interestingly, the plan is to generate an installed capacity of 4269 MW by the end of the year 2018 while 10783 MW of power has been mentioned for the year 2037.

Apart from a small numbers of power generated by Solar, Hydro, Wind , Biomass, Natural Gas and Diesel,  The Sunday Leader learns that CEB has also planned six coal power plants in the years of 2023,2024,2025,2028,2031,2035 generating 2700 MW of power for the Indian Ocean Island.

Sri Lanka’s Government recently declared that the Sampur Coal Power Plant should not be implemented due to its criticality to the environment. Also the first coal fired power plant in Norochcholai has raised serious concern to the public due to the environmental issues especially to the people within the vicinity in the area. The bottom line is Coal power has acceptability issue from the public.

A report by the Institute for Energy Economics and Financial Analysis (IEEFA) has forecast that one third of the European Union’s coal-fired power plants could close by 2021. Not only in Europe, but many other developed and developing countries are in the process of gradually removing the coal plants from energy generation. All these come into play when there is no solid plan to implement the proposed plants in the last year’s generation expansion plan. The plan says it will add 170 MW Furnace oil based thermal power plant to the national grid in 2017/2018 while three plants of Kelanitissa Gas Turbines is to come into operation by 2019 and 2020. 300 MW of LNG operated Combined Cycle Power Plant with Diesel as initial fuel has also come into play in the year 2019 with the plan of translating into LNG in the year 2020. Hydro projects as Uma Oya HPP (122MW), Broadlands HPP (35MW), Moragolla HPP (30.2) will come into operation in the years of 2019, 2020 and 2022.

The much discussed 100 MW of Mannar Wind Power Plant also committed to the operation of year 2020.

The inside sources of CEB say, even though the plans are there for plants nothing has been implemented so far.

Sri Lanka plans to generate 40302 GWh of electricity in the year 2037 up from 14277 GWh in year 2016.

Planning, implementation, follow-up and review is necessary for Sri Lanka’s Electricity Generation as the demand for electricity keeps increasing and especially the utility is state owned and financed by the poor tax payers money.

However, Sri Lanka’s electricity sector has failed in implementing and adhering to its own plan which has led the country to an energy crisis in serious drought condition like the one which is experienced at present.

Sri Lanka would have ideally sailed through this crisis if the plans of the past have been implemented timely rather than purchasing power from private sector using public money, an expert stressed.

2 Comments for “CEB Spends Billions To Purchase Power From Private Plants”

  1. Trevor Jayetileke

    I have told all this before in my writings on Energy.
    We have to have a proper PLAN (short term,medium and long term) and implement it in stages. We don’t listen, we don’t learn and we don’t want to CHANGE.
    The Government wont listen to even Dr.Thilak Siyabalapitiya on Coal matters but is waiting for the WHITE MAN to come and solve our problems like Policy on, the Economy, Constitution, CEB(Electricity) , CPC Petroleum Retailing/Refining ,and PRDS (oil exploration) which are all in LIMBO and we will wait till the Day of Reckoning like with Meethotamulla Waste Dump.
    Our Politicians only dream of their Luxury Cars and doing Business for extra money., while receiving a King’s Ransom for doing nothing good for the People.
    When will we ever Learn and Change., it looks like Never.
    If we don’t change someone else will change things for us like India and China.
    We now only have Hobson’s Choice due to the Pack of Jokers in Parliament.
    Our People have got a Government they have chosen and probably deserve.

    • Jayantha ranatunga

      We must understand that the power policy in this country is determined by the ministry of power, presidential advisers ect and not the CEB. Pricing is determined by the PUC. Reneawable energy policy by SEA. Despite strong objections by CEB the policy makers got rid of Sampur.
      Including this article many writers condemn Norochchele coal plant. But no one, except Dr Siyambalapitiya talks of the plus side of producing a unit of electricity well under Rs 10. Compare this with the present Rs27 paid to private Diesel plants. Now we can easily see the intentions and hidden agenda of those who oppose coal.
      I am sure the Minister and the Dy Minister knows this very well, but they are no match to the coal mafia who are filthy rich. Over to you the President and PM.

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