Imminent energy shortage:

PUCSL challenges CEB for solution

By Rukshana Rizwie

Energy supply sector regulator, the Public Utilities Commission (PUCSL), this week revealed that a deepening power crisis in the country was being exacerbated by sluggish reforms and a lethargic Ceylon Electricity Board.

Energy deficit of 500 megawatts by 2018

Damitha Kumarasinghe Director General at PUCSL is warning that even with the many planned power production plant additions, Sri Lanka would yet have energy and capacity shortages in the years 2018, 2019 and beyond. “The real challenge would be to get these plants implemented,” he said. “We are looking at a short time frame of one and a half years.”

He added that the CEB will need to commission many of the plants listed in the Least Cost Long Term Generation Expansion Plan (LCLTGEP) 2015- 2034 if the country was to avert a power crisis in the near future. Within the next four years, 1,275 megawatts (MW) will need to be added to the national grid.

Based on forecasts by the Ceylon Electricity Board, Sri Lanka’s electricity demand is expected to grow at 5.3 percent on average during 2015 – 2034. In addition, peak demand levels are expected to grow at an average of 4.7 percent. The current installed capacity is 3,900MW and it is expected that the total installed capacity will need to be increased to 4,955 MW by the year 2020.

Kumarasinghe said, the power plants listed in the LCLTGEP for the period 2017 – 2020, should be immediately constructed and commissioned.

The CEB proposes to increase the share of renewable energy capacity to 972 MW by 2020, which would contribute 20% to the total power generation. Renewable energy’s share in power generation is expected to peak in 2025 at 21.4% with an installed capacity of 1,367 MW.

The CEB has proposed the setting up of two thermal power plants with a capacity of 170 MW in the Southern region, 105 MW gas turbines, 300 MW natural gas power plant and several renewable energy power plants with a capacity of 700 MW which include three major hydro power plants.

500 mw deficit

Energy expert Kamani Jayasekara, former Deputy General Manager at the Transmission and Generation Planning division at CEB, warned that by 2018 there would be a deficit of 500 megawatts. “There is a margin for a surge in demand, but we have little reserve in the system to balance it,” she added. This load shedding she says, will ultimately lead to power cuts that would be unstoppable and impossible to rectify instantly.

Earlier this week, President Maithripala Sirisena launched a new program aimed at adding 220 megawatts of renewable solar energy to the country’s energy grid by 2020 to meet at least 10% of the nation’s energy demand. When launching the initiative the President said, the country was committed to meeting growing energy demands with environment friendly options.

The CEB proposes to increase the share of renewable energy capacity to 972 MW by 2020, which would contribute 20% to the total power generation. Renewable energy’s share in power generation is expected to peak in 2025 at 21.4% with an installed capacity of 1,367 MW. Between 2025 and 2034, the share of renewable energy in power generation is expected to reduce marginally from 21.4% to 20.0%.

A director at the CEB who did not wish to be identified said, the CEB was not keen on pursuing sources of renewable energy, unless it was a directive from the government.

“These are intermittent resources and we have no intention of clogging an unstable national grid unless we have enough power plant to back it up in case it falters,” he said. “We have stipulated a limit and will not transgress it by inviting or including many plants.”

The source added that from the time the CEB announced high tariffs for renewables, there had been a lot of pressure to include more renewables, not for the sake of clean energy but ‘for dirty money’.

“At present only 20% of the total energy demand can and will be catered to by renewable sources,” he said. “Everyone has forgotten that we were generating 100% of our energy from renewable from hydro.” He added that many of the proposals received by the CEB were not technically or economically sound.

CEB Plan

Although the PUCSL has granted conditional approval for the (LCLTGEP) 2015- 2034, the Commission observed that the CEB will need to submit a new LCLTGEP for the year 2018-2037 for the approval of the commission by April 30, 2017 in keeping with the government’s policy on energy.

“The plants beyond 2020, mentioned in the 2015- 2034 Plan, should be revalidated with the 2018- 2037 plan, in keeping with government policy,” Kumarasinghe said. “The LCLTGEP 2018-2037 will need to be submitted to the Commission based on wider stakeholder consultation.”

He added that the PUCSL expects the CEB to consider demand side management and inculcate more electricity from renewable energy sources.

The Institution of Engineers Sri Lanka (IESL) a premier Engineering institution in the country warned that power shortages were imminent and that consumers would have to pay higher prices.

“The country is in danger of going back to the era of power cuts coupled with higher prices of electricity. The growth in electricity sales has recovered from the low 1% in 2013 to reach 7% in 2015; growth indications for 2016 are even higher. In this backdrop, it is concerned that currently there are no major power plants being built, to meet the growing demand,” an official communiqué said. “The decision by the Government to change to LNG, can cause inevitable delays. This change would result in the carrying out of fresh feasibility studies, preparation of bankable project documents, obtaining necessary approval and re-negotiating agreements.”

Expensive LNG

They also predict that change of fuel to Liquefied Natural Gas (LNG) would cause electricity production costs to increase by 40-50%.

LNG prices they say, have declined owing to surplus in production and the depressed oil prices, to which most LNG contracts are linked. Recent contracts to supply LNG have been reported to be as low as 8.5 USD/million BTU.

The power sector engineers called upon the Government to scrutinize prices and pricing formulae, and forecast quantities required, through expert studies, before building LNG terminals. Such terminals require significant investments exceeding USD 500 million. In any case, it would not relieve Sri Lanka from the grave power crisis expected by 2018.