Govt. says no plans to revamp Electricity Act

• Insists coal power plants will be subject to international tender process 
• Says Govt. committed to Long-Term Power Generation Plan 
• Dismisses environmental concerns over new 600 MW coal power plants 
• Claims “clean coal” will reduce environmental and health problems 

By Nuwan Senarathna   

The Government yesterday denied reports that the Electricity Act will be amended to avoid floating tenders for future power plants, including two 300 MW coal power plants that have been given Cabinet approval to be built in Norochcholai, insisting that international tenders will be called for the projects.  

Sri Lanka has not set up any power plants since 2015. Cabinet last week approved two 300 MW coal power plants to be added to the existing Lakvijaya plant in Norochcholai which was constructed by the China Machinery Engineering Corporation. In 2014, the second and third stages of the Norochcholai power plant were completed, adding 570 MW to the national grid. Speaking to reporters at the Power and Renewable Energy Ministry, Government Spokesman and State Minister Mahindananda Aluthgamage denied that the Electricity Act would be amended to avoid calling for tenders for the proposed coal power plants. He insisted that the Government would follow a competitive bidding process to award tenders.

“We are not going to amend the law under any circumstance. The Government will build new power plants based on the Long-Term Power Generation Plan that is already in place. The President has instructed us to follow the Electricity Act to award tenders,” he said.

Aluthgamage reiterated that the Ceylon Electricity Board (CEB) had incurred significant losses due to repeated delays in building power plants during the past several years and had to resort to purchasing emergency power at a huge cost to taxpayers. However, according to Aluthgamage, the Government will still take necessary measures to reduce losses and make the CEB a profit-making Government institution.

“The previous administration ignored the power generation plan. Two new LNG plants will also be built in Kerawalapitiya and that will help to meet growing demand.”

Aluthgamage pointed out that the Government will only build the new Cabinet-approved coal power plants but will shift to LNG to increase renewables in Sri Lanka’s energy mix. When questioned on the environmental concerns of setting up 600 MW of coal power in Norochcholai where the existing plant had already created health and other concerns, the State Minister insisted that the Government believed in the concept of “clean coal”.     

“The issue was the coal used for the plants. We will use only clean coal. In the middle of the German capital there is a coal plant. We will build a similar one that will be eco-friendly and function as a cost-effective power generation method.”

“There is no connection between health hazards in the area and the power plant. Fertiliser used by farmers contaminated water in the area which created all those health issues,” he said, referring to the existing health and environmental concerns in areas surrounding the Norochcholai plant. 

‘Clean coal’ is a term that has been used around the world for different processes attempting to make existing coal power plants more efficient and reduce emissions of CO2 but many environmentalists argue that such measures are too costly, rarely applied and do little to minimise production of mercury, nitrogen oxide and other poisonous contaminants that coal plants also produce. 

Meanwhile, Germany has announced plans to phase out all their coal power by 2040 and Reuters reported on Tuesday that the German Government was considering proposals to phase out hard coal-fired power stations as early as 2026 with compensations to be decided on this year.