PUCSL grants CEB conditional approval to year-old Long Term Generation Plan

Tuesday, 12 June 2018 01:03 - - {{hitsCtrl.values.hits}}

By Chathuri Dissanayake

The Public Utilities Commission Sri Lanka (PUCSL) yesterday granted conditional approval for the Long Term Generation Plan submitted by the Ceylon Electricity Board (CEB), ending months of tug-of-war between the two entities, Daily FT learnt.

Giving into the demand made by the CEB Engineers’ trade union, the Public Utilities Commission Sri Lanka granted approval to the Long Term Generation Plan submitted by the CEB in 2017, “subjected to the accommodation of already Cabinet approved ‘Government-to-Government power plants’ and the ‘latest Government policy’”, a letter sent by the regulator and seen by Daily FT stated.

Further, the letter sent to CEB and seen by the Daily FT imposed the condition that the Transmission Licensee – CEB – “is required to negotiate and ensure that the generation plants that would be built under Government-to-Government basis, meet all the technical and economic parameters under the Grid Code and that they are at the least cost, in terms of Section 43 (6) of the Sri Lanka Electricity Act, No. 20 of 2009.”

The PUCSL also directed CEB to submit the Least Cost Long Term Generation Expansion Plan 2020-2039 on or before April 30, 2019 for approval.

The regulator also highlights that they have given approval considering the hardships caused to the public, due to continuous trade union action taken by the CEB Engineers’ union demanding approval for the 2017 plan, and the fact that Cabinet of Ministers has approved a new policy on electricity generation mix and the proposal to develop a 1,400 MW natural gas-fired power plant on a Government-to-Government basis.

However, the PUCSL still maintains that neither the plan submitted by the CEB for approval, nor the plan subsequently approved, meet requirements in the new policy on energy mix for electricity generation.

The CEB and PUCSL have been at loggerheads with each other over the Long-Term Least Cost Generation Plan for the next 20 years, which included a mixture of power plants.

The plan submitted by the CEB in 2017, which featured new coal plants, was rejected by the PUCSL, as the cost was considered to be higher than the base year after adjustments for externalities were made.

The PUCSL approved an optional plan featuring LND, instead of the original plan submitted by the CEB, as renewable generation plants were assessed to be more suitable by comparison. However, to date, a final decision remains elusive, as neither institution is willing to revise its stance.

Following Cabinet approval for the ‘Policy on Energy Mix of Electricity Generation in Sri Lanka’ last month, the PUCSL had requested the CEB to submit a new generation plan, stressing that it was unethical to approve the original plan submitted by the CEB, as it had already undergone amendments through several rounds of public consultation. However, the CEB has been insistent on obtaining approval for their original plan featuring coal, continuing the disagreement between the two entities. Both President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe attempted solving the situation, holding meeting after meeting with the stakeholders. Two weeks ago, Prime Minister Wickremesinghe appointed a six-member committee to assess the Long Term Generation Plan submitted by the CEB. The Committee is yet to make its recommendations known.