The Ceylon Electricity Board (CEB) is at the final stage of calling for 100 MW of supplementary power to meet the expected shortage towards the end of March this year, The Sunday Morning learns.
Accordingly, it is understood that the CEB has already prepared the tender documents and they will be sent to the Public Utilities Commission of Sri Lanka (PUCSL) for approval. Further, members have already been nominated to the Technical Evaluation Committee (TEC) from the board and will be sent to the Ministry of Power and Energy for approval.
Speaking to The Sunday Morning, CEB Chairman Nalinda Ilangakoon said the board had already prepared a Request for Proposal (RFP) and other tender documents and within a week, it would advertise to procure 100 MW of supplementary power.
“We will follow the normal tender procedure to procure 100 MW of supplementary power. The board has decided to adopt ‘scenario P’ for this year and they have decided that we will need 100 MW to fill the expected shortages in the southern region. The additional power will be needed by March. There is ample time to follow the normal tender procedure,” the Chairman explained when asked if the CEB planned to go for emergency procurement to purchase supplementary power immediately.
Cost factor
Commenting on the cost factor, the Chairman stressed that it was important to proceed with the tariff increase proposal and that funds had already been estimated for the procurement of supplementary power that would be included within the expected tariff hike which would bring an income of around Rs. 700 billion.
Nevertheless, earlier the CEB said that there was a shortage of nearly 120 MW and the initial plan was to procure the same on supplementary basis, but according to the Chairman, under the ‘scenario P’ that is to be adopted by the CEB for the prevailing power crisis this year, the CEB has calculated the shortage as 100 MW.
When asked about the purchase, Additional General Manager (Generation Division) and CEB Spokesman Dhammika Navaratne said there was a bottleneck in the southern region. “We have a shortage. As per the Generation Manager’s proposal, we are in a ‘scenario P’ this year without power cuts. We only have the Samanalawewa Power Station for hydro generation and we need additional supply for the southern region of about 100-120 MW,” Navaratne said.
This matter was highlighted in a letter dated 25 October 2022 where the shortage was predicted for the first six months of 2023, with a decision taken for speedy procurement of this capacity shortage.
Speaking to The Sunday Morning, a senior engineer who wished to remain anonymous said it was true that the CEB needed about 150 MW of emergency power during the first four months of this year if it was a normal year, but since the CEB had already shed power due to economic reasons and if the power cuts were to be continued to save money and foreign exchange, it would not be necessary to purchase 150 MW of new emergency power as that requirement could be managed within the ongoing power cut duration.
“Even if we buy emergency power, we will not have diesel [estimated by him to cost over Rs. 20 billion] to run such plants, but whether we generate or not, even to increase emergency power we will have to pay about $ 3.5 million as hiring charges. In addition, we will require about Rs. 20 billion to buy diesel,” the engineer said.
NAO report details
Meanwhile, the National Audit Office (NAO) in its latest audit report on the CEB stated that significant delays had been observed in implementation of the activities included in the Long-Term Generation Expansion Plan (LTGEP) 2018-2037 and the Transmission Plan of the CEB and as a result, the CEB had made emergency power purchases which affected the least cost objective of the CEB.
According to the LTGEP, new generation plants of 500 MW, 657 MW, and 430 MW were planned to be implemented in the years 2018, 2019, and 2020 respectively. However, only the aggregating capacity of 381.85 MW out of the planned new additional capacity of 1,587 MW had been commissioned.
Therefore, the progress of implementing new generation plants was significantly low and the objective of the plan to produce a least cost power supply was not achieved. As a result, a quantity of 811 GWh valued at Rs. 22.2 billion had been purchased as emergency power during the year under review, the audit office has highlighted.
Furthermore, the audit office in its query has observed that even though Minimum Guaranteed Energy Amount (MGEA) relating to Power Purchase Agreements (PPAs) entered with ACE Power Embilipitiya (Pvt) Ltd. was 697,674,432 kWh per year, energy delivered during the year under review was 475,831,835 kWh under the per unit cost of Rs. 24.42.
Accordingly, energy of 221,842,597 kWh was obtained during the year under review (capacity charge on energy not obtained was paid). In addition to the power plant in Embilipitiya, PPAs for 20 MW in Matara, 24 MW in Hambantota, and 24 MW in Galle had been entered for supplying energy to the Southern Province on a short-term basis.
Accordingly, aggregating energy of 130,526,364 kWh had been purchased from these plants at the aggregating cost of Rs. 4,069,542,205 during the year under review. Per unit cost of these plants were Rs. 28.30, Rs. 36.84, and Rs. 39.52 respectively while average selling price was Rs. 16.72.
Therefore, excessive cost of energy purchase could have been reduced, if power plants were commissioned as per the LTGEP to cater to the real-time demand requirement instead of using emergency power plants at excessive cost, it is stated.