Sunday TimesPresident advises PUCSL to approve more coal power plants

The President’s Office has asked the independent Public Utilities Commission of Sri Lanka (PUCSL) to approve the Ceylon Electricity Board’s (CEB) long-term generation plan which includes multiple coal power plants.
The advice was given in a letter from his Secretary Austin Fernando to PUCSL Chairman Saliya Mathew. It was issued after an April 25 meeting at which President Maithripala Sirisena claimed he had never opposed more coal power plants being built. The PUCSL is expected to convene on Wednesday to discuss the development.

The CEB Engineers’ Union (CEBEU) is locked in a protracted standoff with PUCSL over its refusal to approve the utility’s original Least Cost Long-Term Generation Expansion Plan (LTGEP) on grounds that coal-power plants are against policy. Instead, the regulator prevailed upon the CEB to draft a fresh proposal that excluded coal–and was based on major hydro, mini hydro, solar, wind, biomass, natural gas, furnace oil-based power and gas turbine power–and approved that last year.
But the CEBEU is battling to have its original plan sanctioned by the regulator. The union’s efforts have now received impetus from the President’s office. The meeting on April 25 was convened to discussion the generation plan and was attended by three Ministers and officials of the Ministry of Power and Energy, PUCSL, CEB and CEBEU.

“The President asked PUCSL Chairman why the CEB’s LTGEP was rejected,” said an official who was present. “The Chairman quoted a CCEM (Cabinet Committee on Economic Management) decision stating that ‘there will be no more coal power plants in the country as decided by H E the President’.” The CCEM was headed by Prime Minister Ranil Wickremesinghe.
Visibly angry, President Sirisena shot back that he had decided no such thing; and that it was wrong for him to be quoted in CCEM minutes without his written commitment or the facts being verified from him.

“He also said, for the second time, that he is not against hi-tech [Japanese], environment friendly coal power so long as these are built in keeping with the country’s environmental laws and regulations,” the official said. “The first time he said this was in May 2017, at a meeting with the CEBEU.”

While the President’s office may have advised the PUCSL to take action, the regulator is an independent commission which–at least legislatively–is protected from political interference. However, the CEBEU is now intensifying pressure on Mr Mathew to sack Director General Damitha Kumarasinghe, blaming him for bringing the PUCSL to “gradual disrepute”.
This week, the union wrote to Mr Mathew saying it will launch a “non-cooperation action” with PUCSL from Tuesday “until staff members with an unblemished record and highest professional integrity are appointed to the topmost paid posts of the PUCSL”.

The CEBEU will boycott all meetings with PUCSL, not respond to letter or requests and “not keep any sort of communication with you”, the letter said. It will also keep away from any other meetings that are attended by Mr Kumarasinghe.
The union will also start a work-to-rule campaign on the same day demanding approval of the CEB’s LTGEP and Mr Kumarasinghe’s removal. This means engineers will not carry out maintenance after 4.15 pm and, if their demands remain unmet, withdraw from night duty in control centers of power stations. “The most critical effect of this will be prolonged outages,” a spokesman said.

Meanwhile, activists decried “pressure tactics” being used by CEB professionals to reverse the no-coal policy. They said engineers, in a note to CEBEU membership on April 18, had claimed that the price of coal-based generation was Rs 7.90 per kilowatt hour (kWh) when compared with Rs 14.80 per kWh for gas-based power.

However, according to the latest bulk supply tariff (BST) submission made by the CEB to PUCSL for October-December 2017, the cost per unit of coal-based generation from Lakvijaya is Rs 14.53 to 14.74 per kWh.

The same submission states that the energy cost for Norochcholai is Rs 8.87 per kWh. “This indicates that CEBEU figures merely refer to energy cost,” said one analyst. “Coal power plants carry significant fixed and variable overheads.”
The cost cited for gas-based generation (Rs 14.80 per kWh) is based on the Kerawalapitiya LNG-powered electricity generation tender. “But this figure includes fuel, operational costs, finance costs and profit for the power plant owner based on the levelised cost of electricity (LCOE) methodology,” the analyst explained. “Thus, comparing this figure with the un-sourced figure of Rs 7.90, which appears to be a projected fuel cost, is inappropriate.”

The PUCSL also published actual generation costs for September 2017 based on CEB submissions, indicating that Lakvijaya coal based generation is Rs 14.00 per kWh. It said these did not include debt-servicing since the loan for the plant sits with the Treasury.

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