Sri Lanka’s cost of emergency power increased by 62% year-on-year in 2017 to Rs 26,305 million, due to delays in implementing power plants as mentioned in the least-cost long term generation plan, a top power sector official told Ceylon FT.
The cost of emergency power purchases stood at Rs 319 million in 2015 and Rs 16,263 million in 2016 respectively.
The electricity sector regulator, the Public Utilities Commission of Sri Lanka (PUCSL) – who holds the legal power to amend and approve the Ceylon Electricity Board’s generation plan – gave its consent for the latest least-cost long-term generation plan for 2018-2037 on 19 July 2017.
The PUCSL has communicated a number of times to the Ceylon Electricity Board, the State-owned electricity generator and distributor, to implement the approved generation plan to ensure a continuous electricity supply to Sri Lanka, which CEB has failed to do. This has led to buying electricity from private suppliers, ultimately paid for by taxpayers, adding another burden to their shoulders.
The Ministry of Power and Energy last week decided to extend the purchasing of expensive thermal power, as the country had four seasons of back-to-back dry spells that exhausted reservoirs. The Power Purchase Agreement (PPA) with Ace Power Embilipitiya (Pvt) Limited, which is a fully-owned subsidiary of the Aitken Spence group that owns a 100MW thermal power plant, initially lapsed in 2015.
CEB was questioned by the regulator for its rationale to buy high-cost thermal power as a contingency, as this would add huge costs to the nation.
However, the Government said, “Since the power plants constructed presently are due for completion between 2019 and 2022, the need has arisen for a temporary programme to get electricity until 2020.”
The Government awarded two tenders in March to Aggreko International Projects Limited and a Hayleys Group energy producer under emergency power deals to purchase 100MW of power.
The total expected financial loss due to implementation delays of 2018-2020 plant schedule in the long-term generation expansion plan is Rs 50.62 billion. Financial losses due further delays beyond what is forecasted will cost Sri Lanka Rs 3.43 billion each month, PUCSL said in its report, ‘Financial Impact of Delay in Implementation of Power Plants’.