• Cost-reflective tariff alone not sufficient to address crisis
• IPPs have minimised progress of renewable energy sector
• Only options now are coal or LNG, next is renewable
• Attention given to renewable energy is inadequate

A cost-reflective tariff system alone is not sufficient to effectively address the current power crisis and the country must simultaneously focus on other areas, especially renewable energy, asserted MP John Seneviratne, a former Power and Energy Minister, in an interview with The Sunday Morning.

A large number of renewable energy projects that had been envisaged had not been commissioned due to lethargic attitudes and various obstacles being placed in their way, he said, adding that Independent Power Producers (IPPs) who were very powerful in Sri Lanka had minimised the progress of the country’s renewable energy sector.

Seneviratne, who contested under the Sri Lanka Podujana Peramuna (SLPP) banner and now sits independently in the House, opined that in order to generate sufficient power at this juncture at a cheap rate, Sri Lanka’s only options were coal or Liquefied Natural Gas (LNG).

Seneviratne also emphasised that the only way forward was through reform. “There must be reform. The entire setup must be reformed to make it more efficient and also more economical,” he asserted.

Following are excerpts of the interview:

As a former Minister of Power, how do you view the ongoing power crisis in the country?

As a person who has some knowledge about the power sector, I should say that now it is already too late for us to switch over to renewable energy.

As far back as 2008, I inaugurated the Sustainable Energy Authority. The authority was started in order to encourage the creation of renewable energy based on hydro, solar, and wind power – these were the main components making significant contributions. At that time we had small wind power projects, providing about 3 MW in Hambantota and about 10 MW in Puttalam. 

In order to encourage the generation of power through those sources, we formed the Sustainable Energy Authority with the approval of the then Cabinet. However, there were certain obstacles preventing the generation of renewable energy.

In order to overcome and solve these problems, we empowered the Sustainable Energy Authority with certain executive powers so that these difficulties could be resolved. But I should say – with some regret or sadness – that the expected results were not achieved subsequently.

Our idea in forming this authority was to enhance the generation of power from these resources as an alternative to oil consumption. We felt that oil consumption was something we could not continue to bear since oil prices were continually rising and the country was facing difficulty in meeting the cost. We had to find an alternative. 

By that time, countries all over the world were turning towards renewable energy. It was not only cheaper, but was also not as harmful to the environment. The former President also announced that by 2030, 70% of power would be renewable, but later it was altered to say 50% by 2030.

My regret is that, whatever the target, the efforts that were taken by the people – mostly the Ceylon Electricity Board (CEB) employees such as engineers – were not adequate. As a result, the progress that has been made is not sufficient.

We are still at the same point where we wanted to start as far as renewable energy is concerned. Therefore, whichever government that comes into power will have to take adequate interest in converting to renewable energy.

Is there a power sector mafia so powerful that it prevents the CEB from venturing into renewable energy and clean energy?

Apparently the field is not functioning because of influence exerted by certain sections of private power plant owners. It is quite obvious. Even CEB engineers whose participation is necessary have not been very encouraging. They have had a rather lukewarm attitude. 

A large number of renewable energy projects that were envisaged were not commissioned due to this lethargic attitude and due to various obstacles that were placed in their way.

At which point did things start going wrong in the power sector in Sri Lanka?

The point is this: the IPPs are very powerful in Sri Lanka. They are so strong that they have been able to somehow minimise the progress of the renewable energy sector.

Do you think that a cost-reflective tariff system alone can resolve the power crisis we are currently facing?

At the moment there is apparently no other alternative. If the cost increase is not imposed, it will be rather difficult for the CEB to go on. 

But even with a cost-reflective tariff system, if we don’t develop power-generating mechanisms, how effective will the current proposals be?

That is true – a cost-reflective tariff system alone is not sufficient. While increasing the costs in order to cope with the present situation, the CEB will have to develop other sectors, which will definitely enable it to bring the price down.

Reforming the CEB was mooted during your tenure as Power Minister. When it comes to power sector reforms, what do you see as essential reforms right now?

I assumed duties as the Minister of Power and Energy in 2006. I was told that by 2008 there would be a severe power crisis and that we would have to get ready for it.

I consulted engineers and held a series of discussions with them and found that a blueprint had been prepared regarding the present Kerawalapitiya Power Plant. However, its implementation had not been thought of. 

I went through the plan with a couple of engineers and we decided to implement it. That is how the Kerawalapitiya Power Plant came to be. It is a combined cycle power plant – LNG and naphtha or diesel. We were able to complete construction of the 300 MW capacity plant within two years. 

Then we found that we didn’t have any source of getting LNG. We were expecting to get LNG from Qatar, which originally gave us some hope that it would provide us with LNG, but once we completed construction they said they could not do so as the LNG available was not even sufficient to honour their commitments to other countries. 

Then of course we reached out to others where possible but we were not able to get LNG, so we started operating the plant with diesel because we wanted to overcome the power crisis, which by then was at our doorstep. That is how we saved the country from the power crisis in 2008.

Now the Government will have to put up one or two LNG plants. All the surrounding countries have LNG plants because it is one of the cheapest sources of electricity. The Government has taken a policy decision not to go for coal-powered plants any longer. The 500 MW capacity Sampur Power Plant was stopped by the 2015 Government but after that no other alternative plant was set up here. 

Earlier there was a coal power plant that was contemplated in consultation with the Japanese. The Japanese waited for nine or 10 years for the signal to start work, which was not given, so in 2003 those people left the country and the idea was abandoned.

Thereafter Sri Lanka again went for fossil fuel or diesel, which doesn’t help to bring down the cost of production. Anyway, we went ahead with that and then came the Kerawalapitiya Power Plant and at the same time – during my time – we constructed the Upper Kotmale Hydropower Plant with a capacity of 150 MW. 

Kotmale had also been dragging on for some time and some ministers who were to start work had abandoned it due to political pressure. I went ahead and held discussions with those who were interested and those who were placing obstacles and got the project going. I completed it and added 150 MW to the national grid.

Then came Norochcholai Power Plant. That was an idea that had been discussed by many governments for a long time. When I was appointed as Minister of Power and Energy in 2006, I was determined to get this Norochcholai Power Plant. By that time the agreement had been signed by President Chandrika Bandaranaike and then Power and Energy Minister Susil Premajayantha. The foundation stone was placed by Mahinda Rajapaksa.

For the Norochcholai Power Plant, China gave us a loan at 2% interest. That was not sufficient and we got a supplementary loan at a very economical interest rate and we completed the project. When I left the post, I had completed 80% of the work; then one or one-and-a-half years later it was commissioned and thereby 300 MW was added. 

The plan envisaged an additional 600 MW and that has also been completed by now. That is why prior to 2015 this country had sufficient power. Unfortunately, post 2015, this aspect of power generation has been neglected. 

To generate sufficient power at this juncture at a cheap rate, the options are coal or LNG. If we are not going for coal as was decided by the Government earlier, then we should definitely go for LNG. At the same time, the next alternative is renewable energy.

However, the attention being given to renewable energy development is not at all adequate. The CEB is not cooperating sufficiently but at least now it should realise that sufficient attention needs to be given to the improvement of renewable energy.

During your time, a proposal was made to unbundle the CEB into seven units. Why wasn’t this implemented?

That was suggested by the World Bank. It said it would be giving us a loan of about $ 60 billion and it suggested certain reforms. This was one of them, which our engineers opposed. As the Minister, I had to comply so I did not agree with it. However, at present a proposal is being discussed to split it into eight units and carry on the CEB.

Given the trade union objections raised in the CEB as well as certain sections of the power sector, will the Government be able to successfully carry out the proposed reforms?

The Government will have to do it. The CEB and most of the CEB unions are not genuine. I must say that. There are some CEB officers who have been there for 20 to 30 years and all their family members have crawled into the CEB. Besides that, they try to do the biggest possible harm to the CEB, which is a national asset.

If these reforms are blocked, where do you see the power sector in the next few years?

If the Government is firm, the reforms cannot be blocked. I don’t know what opinion the engineers hold – they are a major sector – but among them there are also those who are asking for a change in the setup now.

What is your advice to the Government on handling this crisis?

There must be reform. The entire setup must be reformed to make it more efficient and also more economical. 

Firstly, rather than recruiting employees, the CEB can terminate services of those who reach retirement and thereafter limit recruitment. A large portion of the CEB’s work has been completed; most of the unskilled labour was recruited to provide electricity to the villages and now 98% of the population is getting electricity.

Electricity is transmitted and provided to every nook and corner of the country. Therefore, a large portion of the work of the CEB has been completed. Now what is necessary is mostly generation. In moving for a cost-cutting plan, let employees retire at the retirement age and restrict the intake of employees.

Secondly, they must understand that there is no other way than switching over to renewable energy – a concept that is being followed in countries like India and France and other developed countries. Instead of oil, we must go for renewable energy. It is the only acceptable solution to this present crisis.

Everyone – including the engineers – must understand that, if we are to fix this, we must go for renewable energy; thereby the customer will be safeguarded and the loss of the CEB can also be curtailed.