Power regulator expresses serious concerns over delay in power plant constructions

In a time of low private sector investments, electricity sector regulator Public Utilities Commission of Sri Lanka (PUCSL) cautioned that the construction of major state-owned power plants have been pushed back by 2 years due to delays of the Ceylon Electricity Board (CEB), resurfacing concerns of a power crisis.

CEB’s latest Least Cost Long Term Generation Expansion Plan (LCLTGEP) is planning to add 1,230 megawatts (MW) of capacity by 2020, which the PUCSL last month assured would avoid a power crisis.
“Critical plants for the period of 2017-2020 have been delayed up to two years from the LCLTGEP which ultimately result in not meeting the country’s timely required electricity demand and may create issues to the continuation of supply of electricity throughout the country,” a PUCSL statement this weekend said.

Some of the smaller power plants have been delayed by between 6-18 months.
Following warnings by independent energy expert Dr. Tilak Siyambalapitiya earlier this year that a power crisis would occur by 2018 due to the lack of commissioning of new power plants—a conclusion which both PUCSL and CEB later arrived at—the timetable for new plants was advanced. 
The regulator asked CEB to submit a report on why the delays have occurred, the impact to the country’s electricity supply resulting from the delays, to provide solutions if there is such an impact, and to provide evidence that CEB has not violated its license conditions and the Sri Lanka Electricity Act.
The CEB owned power plants are to make up 60 percent of the 1,230 MW new capacity, and the private sector is expected to contribute the remaining 485 MW by investing in renewable energy power plants.

However, as reported by Mirror Business last month, investor interest in the power sector has been waning since last year, and the government is also moving to cancel any standardized power purchase agreements for which plants have not begun construction by December 31, 2016.
Further, some investors are complaining that the CEB is not interested in facilitating the construction of private sector power plants, while many Sri Lankan power companies are now focusing on entering high-growth markets in Africa.
In mid-October, just 44 private sector projects totalling 127 MW were in the pipeline locally, a concern which PUCSL Director General Damitha Kumarasinghe had pushed aside, saying that the CEB projects would be sufficient.
Kumarasinghe had taken refuge in the fact that the country currently has a 3,900MW generation capacity, compared to a peak time demand of around 2,500 MW and the CEB construction alone would create a healthy buffer between future supply and demand.
Despite the current surplus of supply, the country has experienced multiple major blackouts this year, since the Lakvijaya coal power plant which supplies 40 percent of the country’s energy requirement has run into difficulties.
The most recent blackout occurred during a drought period, which put the hydro power plants, which has so far this year supplied around 25 percent of the country’s electricity, out of the equation.
 The CEB has projected peak time generation requirements to increase to 2,703MW by 2018 and 3003MW by 2020. However, the PUCSL had requested CEB to revise the figures, since the calculation methodology had not included some factors.
Analysts had noted that the slowdown in small scale renewable energy power plants could create space for oil-fired power plants, which cost more to operate, but could be constructed relatively quickly.

The continuous delay in construction of the now cancelled Sampur coal power plant, which was originally supposed to be commissioned by 2018 had given rise to the possibility of a power crisis.