PUCSL gives nod for emergency power purchase subject to conditions

• Chairman Janaka Ratnayake says main issue for power crisis is not having adequate supply of fuel and hydro
• Rolling power outages in the country have caused 200-400 MW loss to national grid
• Calls for immediate actions to resolve technical issues in Southern grid to assure continued supply of electricity

Electricity sector regulator PUCSL yesterday declared an adequate supply of fuel to power plants could immediately resolve the rolling power outages in the country that have caused 200-400 MW loss to the national grid.

“Lack of funds to buy enough fuel to fire power plants is the main reason for continued power interruptions in large parts of the grid in Sri Lanka. We also have run down hydro reservoirs and the hydro storage was used excessively in the months of December last year and January this year to provide electricity,” Public Utilities Commission of Sri Lanka (PUCSL) Chairman Janaka Ratnayake.

“The CEB was forced to shut down 350 MW of Thermal power plants for the past two weeks due to lack of fuel supply. We have generated 76% electricity from thermal power plants 19% electricity from hydro and 5% electricity from renewable for this month so far. Hydro generation has increased to 22% during the month of February this year due to unavailability of fuel for thermal generation plants which stood at 18% in the same month last year,” he said.

“Apart from the lack of fuel supply, we also have a technical constraint in the Southern grid where we have advised the Ceylon Electricity Board to find immediate solutions way back in 2017 which has not been materialised yet. The currency crunch that the country is facing at the moment has delayed the imports of fuel, which has led to power cuts countrywide,” says Ratnayake.

“We currently are in the forex crisis where we do not have sufficient funds to buy fuel. We can end this power cut if we get sufficient fuel stocks to operate our power plants,” Ratnayake said, adding the PUCSL is also aware of the financial issue that the Ceylon Electricity Board is going through.

“We are aware. We have asked electricity consumers to pay their bills on time to reduce the financial burden for the CEB to a certain extent. But the issue is bigger. The electricity generation cost has increased 120% from the last tariff hike. The generation cost per electricity unit is at the moment Rs. 37. But we are providing the electricity unit at a cost of Rs. 16-17 on average, which does not reflect the right generation cost. 

“Also, the price of a crude oil barrel in the world market has increased to $ 113 this year. The Central Bank of Sri Lanka also had taken a decision to float the rupee given the current economic conditions which have caused a higher market volatility at present. 

“All these reasons have a much larger impact on the generation cost of electricity. We believe in a cost reflective tariff to strengthen the CEB and the economy of the country while not burdening the electricity consumers,” Ratnayake said.

Commenting on the Southern grid issue, PUCSL Chairman said that CEB was instructed to find long-term solutions for the issue where 100-150 MW of capacity is being lacking at present.

Considering the existing fuel shortage of the country and electrical energy capacity shortage of the CEB, coupled up with the long-term forced outage of all thermal power plants at Kelanithissa, Sapugaskanda and Kerawalapitiya due to no fuel with severe depletion of water resources in reservoirs that led to experience more than seven hours daily power cut to the electricity consumers, the Cabinet has declared an “emergency situation’ in the energy sector as required under Section 43(4) (c ) (ii) of the Sri Lanka Electricity Act in keeping with the directive of President Gotabaya Rajapaksa have made on 2 March.

With that, CEB has requested the approval of 93 MW of capacity under short-term power purchase agreement from ACE Power (Embilipitiya) power plant for six months in order to reduce the long hours of power interruptions immediately.

“We approved the request given the priority of the fuel supply to CEB power plants,” Ratnayake said.

“In the same time, we empathised with having a steady long-term plan to ensure continuous supply of electricity to Sri Lanka. We have approved 600 MW of LNG power plants already supporting that.”