24 September, 2018

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CEB’s Least Cost Long Term Generation Plan 2018-2037 Faces Public Scrutiny

By Avanthi Jayasuriya

Avanthi Jayasuriya

In line with the duty of developing and maintaining an “efficient, coordinated and economical system of electricity supply for the whole of Sri Lanka”(CEB Mission), the Ceylon Electricity Board (CEB) has submitted its Least Cost Long Term Generation Expansion Plan 2018-2037 (LTGEP) for the approval of the Public Utilities Commission of Sri Lanka (PUCSL). The LTGEP draft report is the key document which defines Sri Lanka’s plans for generation expansion while providing information on the demand forecast, economic, environmental and other parameters used to guide future investment and implementation plans as well as the energy mix used to meet expansion needs including the component of renewable energy sources.

The report was made available for public comments via the PUCSL website and a public consultation was held in order to facilitate public participation in the decision-making process of a national document which would have a decisive role in defining the country’s future pathway for energy security, and sustainable economic growth.

Parameters Specified in LTGEP

The data in the LTGEP records that the average growth of generation demand for the period from 2018-2022 is expected to be at 5.9 percent per annum, while peak demand is expected to increase at 5.1 percent per annum. Further, from the year 2030 onwards, the day peak is expected to surpass the night peak.

With the installed capacity at the end of 2016 at 4054 MW, the LTGEP identifies plans to have an installed grid capacity of 4269 MW at 2018 and a capacity of 10783 MW at the end of 2037. For this base case projection, the energy mix proposed consist of already committed plants and new additions of coal, major hydro, pumped storage hydro, combined cycle, oil and gas turbine plants and other renewable energy plants.

Given the least cost economic valuation, the LTGEP identifies coal as the least cost generating energy source, and the major source of power during the 20 year period with its share reaching 40% by 2025 and 50% by 2034. Contrary to the increasing capacity of coal in long term energy plans, the contribution from renewable energy power plants is said to be more than 40% by 2025 and 33% by 2034, manifesting a declining trend.

Overall, the Base Case plan in the LTGEP has delineated the development of 1500MW LNG, 2700MW Coal, 105MW Gas Turbine and 320MW Furnace Oil Power by 2037 as well as renewable energy development of 1205MW Wind, 1392MW Solar, 215MW Mini Hydro and 85MW Biomass. More specifically, the total addition of renewable energy within the 20 year period is mentioned as 1205 MW of wind power, 1232 MW of Solar power 200 MW of Mini Hydro power and 80 MW of Bio mass Power.

Public Comments for the LTGEP.

The assumptions and scenarios included for generation planning in the LTGEP was subject to public scrutiny at the public consultation held at the Bandaranaike Center for International Studies. The consultation saw a wide participation of key stakeholders representing various state entities, private sector organizations and institutions, CSO organizations, private citizens and other interested parties.

One of the main areas of contention was that the Base Case scenario found in the LTGEP did not align with the national policies on power and energy. “The Long Term Generation Expansion Plan developed by the CEB contradicts the government’s policy of moving towards a zero emissions pathway through renewable energy development as mentioned in several key documents including the presidential manifesto and the National Energy Policy developed by the Ministry of Power and Renewable Energy”, said Mr. Asoka Abeygunawardana, Chairman of Strategic Enterprise Management Agency (SEMA). The national policy clearly defines the energy sector target as to move towards meeting the total demand for electricity from renewable energy and other indigenous energy sources by 2030.

Moreover, the proposed Base Case Scenario, with the inclusion of coal plants violates several national commitments made. Nationally Determined Contributions (NDCs) submitted to the United Nations Framework Convention on Climate Change (UNFCCC)  in 2016, recognizes the country’s commitment of reducing GhG emission through cuts in the coal and liquid petroleum fluids in the energy sector, with a simultaneous focus on developing renewable energy sources. As a member to the Climate Vulnerability Forum, Sri Lanka has committed to become zero emission by 2050.

In addition, several environmental organizations and concerned citizens pointed out to the LTGEP sole focus on the economic valuations based on least cost scenarios, thereby ignoring or discounting the cost of externalities and environmental cost embedded. The implementation of future coal power plants, particularly the proposed Foul point in Trincomalee was raised as a case in point due to the detrimental impact posed on the unique eco-systems and public wellbeing of the area.

Inconsistent Methodology for Economic Costs

Several speakers including representative from the Petroleum Resources Development Secretariat and other independent consultants raised the issue of the inconsistency of the methodology being used to calculate the economic costs. The report’s heavy dependence on capital cost and fuel cost which have also been based on outdated data was reiterated. According to some of the speakers the price of fuel was based on the  market prices and not on economic prices, and failed to capture the declining value of the Sri Lankan Rupee. This was highlighted as leading to miscalculations in the estimation of the least cost scenarios pertaining to coal. Adjustments made would point to a lower generation cost for Liquefied Natural Gas (LNG) than for coal.

Mr. Tilak Siyambalapitiya referred to the current trend of drifting towards increasing use of diesel and other liquid petroleum fluid in order to fulfill the country’s energy needs.  “The share of electricity generation from all forms of oil up to end April 2017 was a staggering 42% “ he said.

The viability of the integration of supercritical coal power plants and the pump storage power plant in the LTGEP is questionable.

Also mentioned as issues was the lack of attention given to the Demand Side Management activities which is said to be the cheapest option. In addition, several other presenters pointed to the untapped potential of renewable energy in the case highway solarisation.

Given the consideration and opinions expressed at the public consultation, PUCSL has requested CEB to amend the draft document of the Least Cost Long Term Generation Expansion Plan 2018-2037 in line with the government policies. It would be interesting to observe how the Plan would reflect the comments and input provided, and the requests for more focus on renewable energy and climate friendly energy initiatives will be reflected in the final version of the Plan.

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Latest comments

  • 2
    1

    Avanthi Jayasuriya quotes CEB Mission statement: “…………of developing and maintaining an “efficient, coordinated and economical system of electricity supply for the whole of Sri Lanka”…………”.
    Whole of Sri Lanka? No, CEB is for consumers in Colombo. Successive GoSL had been Colombo-centric. How many houses/apartments outside Colombo have AC? Whenever a power cut is imposed, Colombo is exempted. CEB is directed by those in Colombo.

  • 2
    1

    The Marakkala Muslim menace in Eastern province cheat electricity, of which CEB makes big loses.

    • 0
      1

      Do you have any evidence for this? Can you prove your statement?

      Do you think, CEB Eastern Provinacial Distribution Office is sleeping?

      The guys like you are the real reason for our countries current state.

      Disgusting.

  • 2
    2

    The CEB leadership consists of engineers more than economists, whereas government policy is largely sourced from economic and environmental practitioners. Sri Lanka has to accede to climate change initiatives set by global bodies.

    There are many sources of energy that are renewable and considered to be environmentally friendly and harness natural processes. These sources of energy provide an alternate ‘cleaner’ source of energy, helping to negate the effects of certain forms of pollution from industrial effluent and road traffic.

    It is disgraceful that SL will still depend on coal, where most developed countries have almost ceased their dependence on it. The energy from the sun, wind, water and waves used in power generation techniques can be described as renewable since they are not depleting any resource to create the energy.

    While there are many large-scale renewable energy projects and production, renewable technologies are also suited to small off-grid applications, sometimes in rural and remote areas, where energy is often crucial in human development.

    The city-centric CEB would do well to consider these sources for rural electrification.

  • 0
    0

    “Also mentioned as issues was the lack of attention given to the Demand Side Management activities which is said to be the cheapest option. In addition, several other presenters pointed to the untapped potential of renewable energy in the case highway solarisation. “
    The above is a pointer to the root of the problem. We as a nation have got used to reckless energy consumption. Have Sri Lankans evolved from a species that 50 years ago lived without phones stuck to their ears, readily used public transport, were happy with 5 hours of (scratchy) radio, and absolutely no AC, into creatures that cannot survive without AC in their glass towers and expensive SUV’s, and must have fridges bigger than some people’s houses? I know some people who don’t know that vegetables can survive a couple of days out in the open, or that chicken doesn’t become deadly poison in half a hour.
    Imposing heavy taxes on electrical items should reduce consumption. Raising electricity charges would be a good idea but for the ensuing howls of protest.

    “One of the main areas of contention was that the Base Case scenario found in the LTGEP did not align with the national policies on power and energy. “The Long Term Generation Expansion Plan developed by the CEB contradicts the government’s policy of moving towards a zero emissions pathway”
    It may be government policy to rely on renewables such as solar, but the engineers know the reality that these highly variable souces are difficult to integrate into the grid. It is not the environmentalists that have to plan for future consumption.There is no more large hydro.So we will be stuck with coal for a while.
    Zero emission is about as practical as totally organic farming.

  • 1
    1

    CEB Engineers mafia is second only to the GMOA.

    These guys have ruined the energy supply in the country and is holding the consumers to ransom by making them pay unreasonable tariffs.

    1 in many instances emergency power is purchased at ridiculous prices due to improper planning
    2 breaking up of CEB into genarion, transmission and distribution has been blocked which would improve efficiency and productivity
    3 no accountability for losses at above three units
    4 mechanical engineers have been sidelined and have no say at CEB
    5 PPAs for private power producers are given out without any transparency or a bidding process
    6 no accountability at Lanka Transformers where engineers have shares and tenders awarded to their own entity
    7 unreasonable salary increases over the years which has resulted in unsustainable wage costs at all levels
    8 responsibility not taken for Norochcholai disaster even though many engineers were trained in China

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