Realised visions vs. day dreaming

By A Special Correspondent

CEB publishes its Least Cost Generation Expansion Plan every year, updating the present data in it and revising generation additions to suit the future forecasted electricity demand. If we go back to 2009, Figure 1 shows the predicted demand growth and the required generation additions. Construction of the coal fired power station in Norochcholai was started in 2006 and three units were connected to the national grid in 2010, 2011 and 2012 respectively. We see the third coal generator too in the plan.

Present electricity supply 

Let us consider the annual energy requirement in 2018 and 2019. Since 2020 was affected by the pandemic, consideration of previous years is more meaningful. If we look at the actual scenario as given in Figure 2, it can be seen that the planning forecast or the performance was not tallying at all.

Let us dig into the following aspects:

• CEB did better than predicted on loss reduction. If that correction is accounted, energy required would have been more; that is 16,296 and 16,877 GWH for 2018 and 2019 respectively. Still, it is far below than the forecast. (As a separate issue, is this loss reduction being due to network upgrading or the distributed solar power injections at Low Voltage network?)
• Since energisation of Uthuru Janani (24 MW) in 2013 coal generators (285x3 MW) in 2011 and 2014 not a single MW is added by CEB to the national grid. (Except the gradual increase of solar and wind additions and 100 MW wind plant in 2021). How did CEB manage with the highly inflated demand forecast over the last nine years? Then the gaps between the forecast and the actual energy are 7,456 and 8,812 for 2018 and 2019 respectively. These gaps have two components.

a. First is the rooftop solar generation. By the end of 2018 and 2019, the country had 175 and 263 MW capacities connected producing about 277 and 414 GWh per respective years. Therefore, the actual day time peak demands of the country were 2,435 and 2,590 MW and energy consumptions would have been 16,573 and 17,291 GWH. If not for solar roof tops additional energies of 277 and 414 GWH should have been generated using petroleum-based thermal stations for 2018 and 2019.

b. Second parts are the errors in forecast which is 7,180 and 8,398 respectively.  

• Obviously CEB was wrong on the forecast. Then if the country spent capital costs on all these coal plants (2,600 MW!) that would be a huge blunder.

2019 generation as a summary (Figure 3)

If the same year is compared with the achievement of additional solar roof top installations and the newly-added 100 MW wind farm, we can see the economic benefits, of reducing costs of thermal generation and replacing it by foreign currency free solar and wind which is produced at Rs. 19/kWh and Rs. 7/kWh respectively.

It should be noted here that the immediate past years have been spent without any power cuts in lieu of generator additions, due to these RE sources.

2021 electricity supply 

The seeds planted at the beginning of the decade is now harvested. The NCRE contribution to the national grid supply is further strengthened by the 100 MW wind farm commissioned recently in Mannar. The roof top solar capacity in the country as at 31.12.2020 was:

Number of customers: 29,310 nos

Total capacity installed: 339 MW

As published in www.ceb.lk website the peak generation and energy produced on 9 June 2021 are as shown in Figure 5.

• The contribution of the recently commissioned 100 MW Mannar Wind plant is about 2.35 GWh/day (during SW monsoon) which is 6.58% of the total electricity demand. Since its unit cost is less than Rs. 8/kWh savings (from oil) is more than Rs. 75 m/day.
• The peak demand is generally during the evening at about 1930hrs. Presently day time peak is about 1,700 MW and during day time solar roof top installations are delivering the full power. Therefore, accounting the solar power which is an embedded generation, roof top solar generates more than 339 MW in day time giving about 1.46 GWh daily. In other words, the actual day peak demand in the country is about 2,030 MW and daily energy is 37.18 GWH. 

Debrief of last decade 

What has happened in the immediate past and how the present status was created, need to be analysed before discussing future actions. Until 1998, the electricity supply of Sri Lanka, was almost green, cheaper for the electricity consumers and profitable for the Ceylon Electricity Board (CEB). This is mainly because the production of the electricity was dominant with renewable energy particularly hydro power. We had a considerable potential of hydro power and by then the majority had been exploited. The nature of the renewable energy base power generation is once the capital cost is paid off the cost of the electricity generated is minimal, less than USD 2 cents. 

There was a very much evident delay in adding the required power plants during 1990 to 2000 despite the rising electricity demand. In any developing country the electricity demand keeps on rising and to match this the supply has to be enhanced through timely new additions. The result was an acute energy deficit in the country. Generally cheaper energy producing power plants require a significant capital expenditure and a longer construction time. 

Since we couldn’t add plants in time, as a short-term solution, more expensive petroleum base power plants had to be introduced to meet this acute shortage. Some of them were privately owned. As a result of all these the generation which used to be cheap became exorbitantly high but never reflected the same on selling price of electricity which made to look cheaper and consequently CEB continued to suffer heavy financial losses. The country had to live with this scenario for the next decade. 

Minister Patali Champika Ranawaka took over the Ministry of Power and Energy in 2010. He is an electrical engineer by profession and had a good understanding about the energy usage of the country and the world. He was instrumental in moving the power sector towards renewable energy (RE) during his term 2010 to 2013.

By the dawn of the next decade, the country had to ponder again about the electricity supply as the already added coal power was mainly consumed by the rising demand over a decade. Hence dependence on petroleum was imminent. The financial situation of the CEB was unable to support additions of new power stations. Despite all these challenges, in 2010 CEB made an operational profit after a decade. This victory was made possible by:

• Discontinuing many privately-owned expensive petroleum-based power stations, 
• Managing the newly-added coal power station which was unstable initially,  
• Managing the day-to-day operations to achieve the energy generation at the lowest cost

In addition, during 2011 first quarter, the hasty decision to go for Rs. 29 billion estimated emergency power was avoided which was mitigated by the nationwide demand side management program launch through Sri Lanka Sustainable Energy Authority (SLSEA) and getting the support of customers through public appeals.

Available facts considered in 2011 for the benefit of next decade: 

Financial situation of the power sector is one aspect only; as what happens in the future also had to be assured. When the security of electricity supply for the next decade was considered, already few scenarios had been manifested clearly.

a. If the renewable energy is installed, the generation cost will get lower with time as the capital cost of the plant which will be probably in the form a loan + interest, is paid off by then. That is how CEB made profits before 2000. Petroleum-based electricity generation is costly at present and price will increase further due to world dependency on fuel, more foreign currency drain in the country, and resulting impact on exchange conversions rates.

b. The RE generation is scalable and right sizing of RE projects is very important to present the business model which is equally attractive to the investor as well as for the CEB.

c. CEB least cost generation expansion plan identified coal fired generation plants as one of the main candidate projects in near future. In addition to the capital cost required the effects of the coal power generation to the environment was considerable. This needs to be carefully analysed when selecting the power plants in a future power plant mix.

d. The transmission and distribution networks need to be augmented along with new generation additions. Locational pricing together with additional transmission investment should be considered for large plants (concentrated generations) when determining the true cost of electricity from large plants. RE on the other hand, can largely be distributed generators, similar to the electricity distribution concepts prevailed in Edison’s times. RE based power plants, if strategically developed considering the scale benefits and exploiting the already invested assets, can have a greater impact on cost of electricity, perhaps the answer to the present financial situation of the CEB. 

CEB had a considerable hydro power base which amounted to 46% of the energy by 2010. CEB started connecting mini hydro plants to the grid in 1997. Similarly, wind and solar generations up to 10 MW capacities were allowed to the grid in 2007 with a three-tier cost reflective feeding tariff. However, the solar power which is the ideal candidate for the distributed generation was not permitted, except for few pilot projects. During Minister Champika Ranawaka’s time, the following actions were implemented.

a. Launching Demand Side Management measures to reduce the consumption at customer end educational program starting from schools with the help of SEA.

b. Establishment of the Net Metering concept for solar, wind and biomass. This scheme allowed the smaller RE schemes to connect to low voltage grid, which otherwise would not be feasible on economics. Solar particularly started utilising the roof which could not be used for any other economic activity for energy generation. If larger solar farms are established all over the country those would destroy valuable plantations, occupy useful lands. Use of roof added a new economy without damaging the environment. Following the ‘Grid Interconnection Standards for Net Metering of On Grid Renewable Energy Based Generating Facility’ and the ‘Net Energy Metering Manual’ this scheme came in to effect in July 2010 for sizes of 42 kW initially.

c. Extending the roof top solar concept to Net Accounting and Net Plus in 2014 and 2016 respectively in order to maximise the roof usage without being restricted by internal electricity usage and tariff category of the premise.

d. Initiating the major transmission expansion project for developing wind power potential in Mannar basin by commencing the transmission line from Anuradhapura/Vavuniya/Mannar.

e. Initiating a large-scale wind farm of 100 MW capacity in Mannar. As already experienced by CEB it was the large-scale RE energy which enabled CEB to enjoy a lower generating cost which ultimately passed down to broad customer base. Therefore, without segregating a larger natural energy source (wind belt) a larger wind farm was earmarked and it was allowed to be owned by CEB. Other factor in this establishment was the semi dispatch ability, novel concept proposed by CEB engineers to integrate wind power plants to the national grid in a stable way addressing technical issues. 

Construction of this plant met with many issues and the same minister continued to support even though he was in a different portfolio later. Thanks to his support and the correct decision made by then Prime Minister Wickremesinghe, the project was given the green light to go-ahead as a public sector project. Since May 2021 this plant is fully grid connected and operational. It is expected that this project would generate electricity in par with the best wind power plants in other part of the world.

Without limiting to the RE, construction of the Uthuru Janani heavy diesel fired power plant in Jaffna is another implementation in 2013. Uthuru Janani replaced the old Chunnakam power plant and short-term power generation facility operated by a private generator. Efficiency gain in Uthuru Janani plant enabled the saving of a significant amount of operational cost thereby reducing the electricity cost. In addition to a valuable generation addition at a strategic location, this plant enabled the improvement of the reliability and quality of electricity supply to Jaffna Peninsula.

It is worth noting that even though the above programs were met with some resistance, thanks to many rational-minded progressive engineers in CEB, the main focus was preserved. 

The initiatives taken during 2009 to 2012 were not inert but very much required and anticipated by the country. In order to support the roof solar installations a solar industry had been created with more than 250 companies each having separate work forces. Therefore, the successors also carried the baton of this relay. As a result of all these the solar power became a major contributor to the national electricity supply among other RE and will take a leading role in the future also.

Future with imitations having limitations 

The 2019 election manifesto of the present ruling party promised 80% of the electricity energy to be generated from RE by 2030. The Sinhala and English translations of this manifesto have differences and now it is argued that target was not 80% but less. Whatever this number be, whether actions have been taken by this Government to achieve the RE dream is the question. Let us consider the main actions taken.

1. Kerawalapitiya second combined cycle was awarded to LTL joint venture. This is a 300 MW plant fuelled by diesel which will be converted to natural gas when Liquefied Natural Gas is made available. LTL who championed the first 300 MW combined cycle plant at Kerawalapitiya, told the same story that the plant would be converted to LNG in two years’ time. Now more than a decade has gone and still the first plant is running on heavy diesel fuel.
2. The fourth coal generator at Norochcholai. With a 180 degree turn from the promised RE, the most polluting energy source – coal is pushed now. It is not desirable due to pollution, it being a Chinese private generation and being an unreliable machine. Further the transmission lines connected to Norochcholai are not designed to evict 1,200 MW (300x4), they are actually designed for 600 MW capacity. When those transmission lines are fully-loaded the wires are elongated with a heavy sag and those who go under the lines are endangered.
3. Introducing LNG to replace petroleum used for electricity generation. The biggest joke is treating LNG as a renewable energy. Just like any other fuel natural gas (mainly CH4 – Methane) emits CO2 when it burns to produce electricity. This NG share is inserted within RE quota and gimmick is to show RE 80% target. Not only the environment part, NG has to be imported just like petroleum. And most probably the biggest blunder and the corruption done by the present Government will be this. The committed LNG supply will be at $ 1 billion each year for 10 years initially and five-year extensions. So, the total commitment is guessed at $ 20 billion for the next 20 years. If one USD billion is spent upfront to develop the promised RE, we may not need LNG development at all. 
4. 7,000 distribution transformers connected 70kW solar installations. The concept of connecting appropriately sized (70kW) solar installation to each distribution transformer looks good on face value. The true picture is totally different. To have a 70kW installation half acre land is needed. The vegetation of this land has to be removed and no other productive purpose can be served by this land. Mind you the rooftop solar utilises the existing roof of a building. And when 7,000 nos of solar is connected the existing network will be jumping up with voltage. Even now some of the distribution networks near cities have high voltage issues. 

Despite these technicalities is it economical?  When the bids are called for this project a ceiling price of around Rs. 15.00 per unit is affixed, which means the expected price is around 15. Compare this with the other tenders received for 1 to 10 MW solar projects which were offered to private sector. They are around 9.50 to 12.00 RS/unit. Then why pay Rs. 3-4 more for the same solar power? To promote solar RE, the Government needs to get more 1-10 MW IPPs and utilise the rooftop solar mechanism.

What the Government does is completely different to what it promised in the manifesto. It doesn’t promote RE (and promote more thermal) and it doesn’t look after the national assets nor economy.