CEB and PUCSL at loggerheads as energy crisis looms

• CEB and PUCSL engage in battle over data used for cost evaluations PUCSL refuses proposed coal plants as a short-term measure for power shortage

• Power and Energy Ministry to repeat call for coal plants to be included in energy mix

• CEB engineers still refuse to sit in TEC for  new plant tenders

• CEB engineers claim power cuts to be expected 

By Chathuri Dissanayake

As pressure mounts to power through the Long-Term Generation Expansion Plan (LTGEP) to avoid an energy crisis, the Ceylon Electricity Board (CEB) engaged in a fresh battle with the Public Utilities Commission of Sri Lanka (PUCSL) over electricity generation cost estimates in formulating the plan which was approved last year.

The CEB has written to the PUCSL in December, claiming that the costs used by the institution to arrive at the least cost generation plan was incorrect.

“They have used a higher financial cost for financing and the Norochcholai Plant, which is wrong,” explained spokesperson for the Ministry, Sulakshana Jayawardana. 

However, PUCSL stands by the data, claiming the costs used were the most recent market prices, their reply states. The reply also stresses that the cost per unit has been obtained from CEB’s latest submissions at the time of calculation, while a finance cost per unit at the rate of LIBOR+4.5% interest rate was assumed as the actual details were not received despite the commission requesting the CEB to “submit all the loan details.” The CEB has challenged the PUCSL through another letter dated January 8 for which the PUCSL is yet to reply. Keeping with the global trend of moving away from coal power plants, PUCSL maintains their aversion to coal. 

The opinion submitted to the Cabinet of Ministers on the latter’s request regarding a joint Cabinet paper submitted in December last year by Special Assignments Minister Sarath Amunugama and subject Minister Rajith Siyambalapitiya has flatly refused the establishment of the two coal-based power plants.

“They have directly refused the proposal, without taking into consideration over 10 different measures proposed in the paper,” said Power and Energy Ministry Secretary Dr. B.M.S. Batagoda. 

The Science and Technology Ministry has rejected the plan citing environmental degradation and long-term adverse effects.

Dr. Batagoda is set to write to Cabinet advocating a power generation mix which includes coal plants as well, to be submitted along with the PUCSL opinion.

“I am writing a note to the Cabinet explaining that we should look at a mix not solely dependent on LNG plants as the PUCSL has suggested. We should also have coal,” he told the Daily FT.

“We should not depend on LNG. There is now a craze for LNG globally but we don’t know how it will pan out. So we shouldn’t depend on one energy source. We have already seen how the dependency on hydropower plants has affected us.”

The engineers’ unions last week took to reaching out to individual ministers in the Cabinet to raise awareness over their position.

Writing letters to each minister, the engineers’ union has advocated a mix of generation plants to ensure energy security, advocating inclusion of coal-based power plants as well.

The CEB engineers continue to refrain from sitting in Technical Evaluation Committees (TECs) to assess proposals submitted for tenders floated under the LTGEP approved by the PUCSL. This is despite instructions issued by the ministry secretary to set up individual project management units to oversee the implementation to minimise delays.

A letter sent to CEB Chairman W.B. Ganegala in July 2017 said “since there are many criticisms that we are not able to implement the LTGEP which leads to a power crisis in the country, we must give our personal attention to implement the power plants in the LTGEP.”

However, the CEB engineers refused to implement the plan claiming this was not the plan submitted by the CEB, CEB Engineers’ Union President Saumya Kumarabandu told the Daily FT.

“They have not approved the plan we submitted, nor have they given us any comments on the plan. Instead they have given us a plan to work with. That is not their mandate, they don’t have the expertise to prepare a plan that will affect the country for the next 20 years,” he said.

The country will see delays of the long-term generation plan by March this year, Kumarabandu said, explaining that due to drought conditions the CEB will be pushed to implement power cuts in March and April this year.