I would say it would be at least 2020/21 before the LNG power plant will begin supplying to the national grid.
Because of the suspension of work and the final cancellation of the sumpur power plant, which was set to begin supplying power this year, this is going to major short fall.
Long-term Energy generation plans are carefully and methodically formulated to avoid the unnecessary cost to the public. Power plants need to delivered right on time with a safety factor, if they come too early, it will be an unnecessary cost.
Major Power Crises In The Offing
The Ceylon Electricity Board Engineers (CEBEU) say constructing power plants and transmission line requires long term planning.
“Going beyond such plans would end up in repercussions, where it is not easy to come out of the mess,” CEBEU Chief Athula Wanniarachchi told The Sunday Leader.
He added: “In 2018/19, we are going to face major power crises as the government failed to implement (Long Term Generation Expansion Plan (LTGEP), particularly the Sampur Coal Plant.”
He also pointed out that some corrupt politicians are pushing for unwanted power plants to the system terming them as the so called solution to the power crisis. “If we are to construct power plants more than the required number , poor customers have to pay for these unwanted investments. The bottom line is that noone should force power plants to the LTGEP It has to be on ‘least cost’ principles,” he stressed.
The Ceylon Electricity Board (CEB) is preparing the much debated LTGEP for the next 20 years and it is a rolling plan, senior engineers point out.
Citing examples, they say it is reviewed and updated every two-years
Even as per the Electricity Act 2009, it must be the ‘least cost generation plan’ which benefits the public and industries. As per the previous plan for 20 years starting from 2013, the major thermal plant to be commissioned was 2X250 MW Coal Power Plant at Sampur.
CEB is preparing LTGEP for the next 20 years and it is a rolling plan. It is to be reviewed and updated every two years period. It is prepared considering alot of factors like cost, technical issues like system stability etc… Even as per the Electricity Act 2009, it must be the ‘least cost generation plan’ which benefits the general public and industries. As per the previous plan for 20 years starting from 2013, the major thermal plant to be commissioned was 2X250 MW Coal Power Plant at Sampur.
However, successive governments had failed to implement the project attributed to many factors like bureaucratic attitude of the Indian partner as well as issues on uneconomical, financial and technical terms, long time taken for Environmental Impact Assessment (EIA), etc. However, project was to commence in 2016 after finalising alot of issues which causes the delay. But at the eleventh hour, unfortunately, government wanted to convert it to an LNG (Liquefied Natural Gas) plant. “We assume this is a political issue rather than an environmental issue.
The vacuum created by abandoning a maturated project just before it’s’ implementation is massive. To fill the vacuum CEB is planning to construct 300MW Combined Cycle plant at Kerawalapitiya and 170MW Diesel Plant in Hambantota. It is included in LTGEP 2015-34 which were approved only two months ago by, the energy sector regulator, the Public Utilities Commission of Sri Lanka (PUCSL).
Initially these plants will be run on diesel and after about four years, it is planned to covert the fuel as LNG. Compared to a coal plant, the additional cost for these two plants for four years will be Rs. 200 Billion. After that fuel may be converted from Diesel to LNG. This figure was calculated by CEB and also confirmed by Prof. Kumar David. With this cost the country would have developed five highways equivalent to the Katunayake Highway (Rs. 39 Billion).
CEB Short term and Long Term solutions
The above mentioned additional cost (waste) of Rs. 200 Billion is now unavoidable. If the two power plants are not constructed there will be power cuts in 2018-19. It will take at least two years to construct the proposed 300MW combined cycle plant at Kewalapitya.
“So in real terms it will be in operation in early 2019. The forecasted difficult /dry period will be from February to May 2018. So we have to have a short term practical solution for 2018,” the CEBEU Chief stressed.
Short Term solutions:
The CEB is proposing to the government to extend a few diesel power plants which ‘retired’ after their 10 year contract periods. These plants comprise 100MW Embilitiya -already running from last May, 25MW at Matara and 100MW at Puttalam Diesel plants.
“It is realistic to extend these plants at a negotiated lower price – as we have already paid for their investment- which can be done within few months’ time to face any possible power crisis in 2018. There are few CEB owned plants like Sapugaskanda that can be extended for another one or two years without much financial repercussions for the country.
Long term Solution:
There are no other plants required until the CEB implements the proposed 2X 600MW Clean Coal plant in Trincomalee in 2022. The Japanese government is very keen on this project which was agreed between the two Prime Ministers in 2015.
If required the government can request Japan to expedite the project. At the moment there is no progress in the project as government is not allocating any land for the project. The EIA can only commence if land is allocated. The Transmission line is already being constructed with Japanese funds (total cost 30 Billion for the Transmission Line)
Engineers point out that the more important issue is quoting as solutions for the impending power crisis in 2018 series of unsolicited power plants that are pushed by various politicians connected with the business mafia. A few are described below
1000MW LNG Plant by CMEC: 400MW LNG plant which will be expandable to 1000 MW later in Hambantota is pushed by a strong minister (not by Power & Renewable Energy Minister Ranjith Siyabalapitiya). In order to offset the loan taken for the Hambatota port, government is discussing with China to have an industrial zone around Hambantota area.
But even before the discussion on Industrial zone is over, CMEC – China Machinery Engineering Cooperation_ the same company who built the first coal fired plant in Norochcholai is pushing for a 400MW LNG plant now.
Two months ago when the CEBEU met Prime Minister, the CEBEU pointed out to him the financial and technical risks of backing an unsolicited mega project like this. “We were told that it will be a ‘Merchant Plant’ i.e. the plant is constructed for their Industrial Zone and only any additional power will be sold to CEB at a negotiated price.”
For normal IPP –Independent Power Plants, CEB is paying a ‘Capacity Cost’ to recover their investment which has to be paid irrespective of whether the plant is running or not. In the case of a ‘Merchant Plant’the CEB does not have to pay this Capacity Cost. Although the Premier described it as a Merchant plant, CMEC clearly says to CEB that their proposal is not a Merchant Plant but a normal IPP and CEB will have to pay a Capacity cost.
Meanwhile CCEM ( Cab. Com on Econ. Management) has instructed to include (force) this into LTGEP. LTGEP is prepared based on solid economic (Least Cost) and scientific approach so no one should not force power plants into the plan.
Additional 300MW Plant at Kerawalapitiya: As per LTGEP of CEB one 300MW Combined has to be built at Kerawalapitiya. Meanwhile Ministry of Mega polis has suddenly proposed a huge demand increase after 2020. Quoting this demand a certain section of the government wants to have another 300MW to be included to LTGEP.
It is said that a Chinese investor has submitted an unsolicited proposal for a 300MW plant at Kerawalapitya and the Prime MInister and a few ministers in CCEM want to take it under a new tender mechanism called ‘Swiss-Challenge’ .
The CEBEU does not agree with this additional 300MW proposal for following reasons-
a. There is no requirement of 600MW at Kerawalapitya ( as per LTGEP we need only a 300MW long term plant)
b. There is no possible fuel supply for 600MW for the initial period ( till LNG terminal is constructed after two-three years)
c. There are no transmission line capabilities to transmit 600MW from Kerawalapitya.
d. Normally ‘Swiss- challenge’ has been practiced in projects when they are several technical solutions and the bidder is free to decide his own spec. and others are asked to submit better proposals. CEB need power plant as per our specification ( not bidders) we have never heard about this mechanism being used for Power Plants.
500MW Indian LNG Plant at Kerawalapitya
The government initially proposed to convert 500MW Sampur coal to an LNG plant. As it is not feasible to have LNG terminal/plants in Sampur, negotiations are going on with India to construct 500MW LNG plant at Kerawalapitiya. The issue is as CEB has already decided to have two plants ( 300MW Kerawalapitiya and 170MW Hambanthota) to replace 500MW Sampur Coal Plant, there is no requirement for another Indian plant at Kerawalapitiya now. But due to political pressure the Indian government may sign for an unwanted plant. With the previous experience on Sampur coal, the CEBEU will never recommend to have any new business with India.
http://www.thesundayleader.lk/2016/11/27/major-power-crises-in-the-offing/
CEB is set to review the LTGP policy in April 17, lets see what happens.
