There are lots of developments, that link to energy sources, especially the pricing of renewables and climate change
It’s clear that renewable and natural gas based electricity is becoming cheaper than coal
The world is moving towards the greener energy production at lower costs
Generation planning isn’t just a technical exercise, but requires economic, environmental, social, financial inputs
The Least Cost Long Term Generation Expansion Plan 2018-2037 (LCLTGEP) is one of the key tools that the Commission uses
Today the argument that coal is cheap is no longer valid in the light of rapidly reducing renewable energy prices
After obtaining public views on the submitted LCLTGEP, PUCSL requested CEB to prepare 12 different scenarios with updated fuel prices
The Dailymirror conducted an interview with Director General of the Public Utilities Commission of Sri Lanka (PUCSL) Damitha Kumarasinghe to obtain his views on the future of power generation in Sri Lanka and the current crisis in the power sector.The following are excerpts of the interview.
Q Energy experts predict that Sri Lanka will face a power crisis by 2019 as the existing power plants in operation wouldn’t be sufficient to meet the demand for power by then. How are you, as the regulator of power supply and generation, going to tackle this problem?
A power crisis can be triggered or instigated by either an energy shortfall or capacity shortfall. The former is determined by the availability of energy resource (I.e. water, coal, oil etc.), while the latter relates to the availability of power plants. When we consider 2019, the forecast peak demand will be 2,903 MW and the energy requirement will be 16,188 GWh. So without new additions of plants, we will be short of a generation capacity of about 300MW in 2019.
However, there are a number of new power plants in the Long Term generation expansion plan approved by the Commission. This includes 3 furnace oil plants with a total capacity of 320MWs, that will be in operation within 2018, and another 300MW Natural gas power plant that will be operating by 2019.
PUCSL has approved these plants and have included them in the Commission approved generation plan. CEB has reiterated its commitment to implement these plants on time following the recommendations of a Sectoral Oversight Committee in Parliament. In addition to this, more than 450MW of renewable energy is expected to be added to the system in 2018 and 2019. Therefore, I believe in terms of generation capacity, we are adequately covered for 2019 provided that the plant, in the long term generation planning, is implemented on time.
The availability of energy resource is the other aspect of the problem. What I have said above is based on a conservative yet reasonable assumption of rainfall. Special emphasis should be given by 
all stakeholders to ensure the fuel availability of all thermal power plants – coal, oil, and natural gas. Natural gas infrastructure would be available on time along with a secure fuel supply chain. Based on this condition, I can say that there is no imminent power crisis in 2019. This again emphasizes on the importance of the construction and connectivity of power plants in keeping with the long term generation plan.
Q At a time when many other countries in the world – the developed nations in particular - are in the process of phasing out coal power generation, why have you included a 600 MW coal power plant in your Long Term Generation Expansion Plan (LTEGP 2018 – 2035)?
Coal used to be the main source of energy in the past. There are lots of developments, that link to energy sources, especially the pricing of renewables and climate change.
I would like to highlight a few recent developments and the future direction in which other countries are heading in the energy front to understand the direction of the energy sector.
In April, 26 of the 28 member states in the European Union, represented by 3500 utilities, pledged that there would be no coal plants after 2020. In Australia, the prices of coal power-especially ultra-super critical plants- became more expensive than the average wholesale cost of electricity. The authorities now find it difficult to sell electricity. Further, Indian coal plants are currently operating at an average plant factor below 60%. The lower cost of solar and the use of wind forces have contributed to the reduction of coal power plants in India.
Therefore, it is clear that renewable and natural gas based electricity is becoming cheaper than coal. This trend is most likely to be continued into the future.
Q Despite heavy protests, initiated by the public in the area together with environmentalists, against the construction of Lakvijaya Coal Power Plant (LCPP) in Puttalam, there is a powerful lobby to promote coal power generation in Sri Lanka. How do you see this?
Construction work of the Lakvijaya Coal Plant began more than a decade ago. Then the debate was about cheap energy generated through coal and as opposed to environmental and health issues that it would create. But today that argument of coal being cheap is no longer valid in the light of rapidly reducing prices of renewable energy. The world is moving towards greener energy production at lower costs.
QEnergy experts opine fossil fuel deposits in the world will be exhausted in about three to four decades from now. If so what is your strategy for power generation beyond 2035 in a scenario where petroleum products aren’t available or are fast depleting?
The Commission’s decision regarding the Long Term Generation Expansion Plan clearly makes us target the generating 60% of the electricity needed by 2030 through renewable sources. Presently about 40% of the electricity is generated through renewable energy. Therefore the direction is towards establishing a fossil fuel-free economy in future. This will ensure energy security, lower costs and also price stability regarding electricity.
In April, 26 of the 28 member states in the European Union, represented by 3500 utilities, pledged that there would be no coal plants after 2020. In Australia, the prices of coal power-especially ultra-super critical plants- became more expensive than the average wholesale cost of electricity
Although the CEB is the only Transmission licensee, it is only one among several other licence holders. Hence it’s not proper to approve all future generation projects on the basis of a forecast prepared by one of the licencees
Q Major motor car production companies in the US, Japan and EU will not produce fossil fuel powered motor vehicles after 2040. Are we ready for the full electrification of our transport system in four decades?
One of the objectives of producing electric vehicles is to reduce emissions from combustion engines. To achieve this objective it is important to charge the batteries of these vehicles using renewable energy. As described earlier that the direction of power generation is towards renewable energy, I hope that transportation can be electrified in the future.
QThe CEB Engineers’ Union charges that the PUCSL, the regulator of the power sector, is overstepping the powers vested in it and has approved an amended Least Cost Generation Expansion Plan which totally differs from what the CEB submitted for approval.
Initially the CEB had submitted its Base Case of LCLTGEP with two other fuel diversification scenarios.
This related to the plant capacity mix of the above 3 scenarios and PUCSL.
Revised Case are as follows:
- Base Case ( Coal – 2700MW, NG – 1500MW)
- Future Coal Power Development Limited to 1800 MW Scenario ( Coal – 1800MW, NG – 2400MW)
- No Future Coal Power Development Scenario ( Coal – 0MW, NG – 4800MW)
- PUCSL Revised Case ( Coal – 0, NG – 4800MW)
By comparing the “No Future Coal Power Development” Scenario, submitted by CEB and PUCSL Revised Case, it could be observed that plant capacity mixes of both scenarios are the same. The only difference of the above two options is that, CEB has only considered 300MW units of NG plants while PUCSL has considered both 300MW and 150MW units of NG plants during optimization. Also, PUCSL has found that the PUCSL’s revised case is cheaper than CEB Base Case.
After obtaining the public views on the submitted LCLTGEP, PUCSL, requested CEB to prepare 12 different scenarios with updated fuel prices. Even one out of the 12 scenarios developed and submitted by CEB, in which both 300MW and 150MW units of NG plants are occupied, is very similar to the PUCSL Revised Case.
Q The CEB Engineers Union (CEBEU) are at odds with the PUCSL and maintains that you have overstepped your mandate and the LTGEP is illegal, hence it must not be accepted.Your comments?
When fulfilling its obligation, carrying out its responsibilities and exercising its powers that are vested with the Commission under sections 43 (2) and 43 (8) of the Sri Lanka Electricity Act, the Commission can’t discard obligations and responsibilities it is entrusted with under the provisions of both applicable statutes namely the and the Public Utilities Commission of Sri Lanka Act No. 35 of 2002 (PUCSL Act) and the Sri Lanka Electricity Act No.20 of 2009 as amended (SLEA) and would like to highlight some of them as follows:
- The responsibility of the Commission to secure that all demands for electricity is met - Sec 4 (1) (b) of SLEA
- The responsibility of the Commission that a coordinated efficient and economical system of electricity supply is provided for and maintained throughout Sri Lanka - Sec 3(2) of SLEA
- The responsibility of the Commission to promote efficiency in both the operations and capital investment in public utilities industries- Section 14 (2) ( c) of the PUCSL Act
- The responsibility of the Commission to promote an efficient allocation of resources in public utilities industries - Section14 (2) ( d) of the PUCSL Act.
- To receive general policy guidelines formulated by the Cabinet of Ministers in consultation with the Minister in charge of the public utility industry - Section 30 (1) of the PUCSL Act
Further it’s a function of the Commission to make consultations to the extent the Commission considers it is appropriate for any persons or group of persons who may be affected or are likely to be affected by the decisions of the Commission. [Section 17 (b) of the PUCSL Act]
The Least Cost Long Term Generation Expansion Plan 2018-2037 (LCLTGEP) is one of the key tools that the Commission uses to exercise its legal mandate and to fulfill its obligations.
The decision making process on approving the LTGEP involves considering many other facets including the Commission’s responsibility to secure; all electricity demands of the country are met, the availability and continuity of electricity supply, considering the views of stake holders, efficiency in both the operations and capital investment to name a few. Although the CEB is the only Transmission licensee, it is only one among several other licence holders. Hence it’s inconsistent and not proper to approve all future generation projects on the basis of a forecast prepared by one of the licencees. The revised case wasn’t arrived at on its own by the Commission, but was due to a decision arrived at after giving due considerations to all aspects that are essential towards fulfilling its obligations, as vested by the relevant statutes.
The CEB (Transmission Licensee) can’t maintain a position of non-acceptance of the approved plan as per the provisions of the SLEA and its bound to comply with the LCLTGEP as approved by the Commission.
Q The CEBEU had recently accused the Cabinet Committee on Economic Management of manipulating the PUCSL into submission. What do you have to say about this charge? To what extent are you bound by the decisions taken at the CCEM?
PUCSL’s decision document on the Long Term Generation Plan clearly states the basis of the decision. Explanations on all assumptions and the commission’s view on all stakeholder comments are also provided. This decision was taken after a lengthy and extensive public consultation process.
Energy experts, Environmentalists, Economists, Sociologists, Investors, Licensees and other stakeholders including the general public have expressed their views on the generation plan.
Generation planning isn’t merely a technical exercise, but requires economic, environmental, social, financial inputs. So participants with wider expertise in the decision making process is important.
We brought in a wider range of views through a public consultation process.
Therefore, PUCSL being manipulated in the process of decision making doesn’t arise.
The Commission’s decision regarding the Long Term Generation Expansion Plan clearly makes us target the generating 60% of the electricity needed by 2030 through renewable sources. Presently about 40% of the electricity is generated through renewable energy
Q What is your personal opinion about the suitability of LNG and Coal as fuel for the future when considering protests from various groups against Coal power?
As described earlier the direction is towards renewable energy. We are looking at a generation mix of 55%-60% renewable, 20%-25% Natural Gas and 15%-20% coal by 2030. The Government’s objective of achieving self-sufficiency in power generation by 2030 is set to be achieved through renewables and natural gas. Therefore over the next decade we should look at developing renewable energy and natural gas.
