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Sri Lanka to bring coal power back, optimal mix required: Central Bank

May 02, 2018 06:54 AM GMT+0530 | 3 Comment(s)

ECONOMYNEXT - Sri Lanka's power ministry has proposed to bring back coal plants to the energy mix in a bid to lower long term generation costs, amid a need to determine the optimal energy mix, the central bank has said.

Sri Lanka's Ministry of Power and Renewable Energy submitted a revised version of the new National Energy Policy and Strategies to the Cabinet of Ministers for approval, which includes coal.

"It is important to determine the optimal mix of energy sources for Sri Lanka in terms of both financial and economic costs, and thereby the long-term generation expansion plan for the country, without considering power projects in an ad-hoc manner," the central bank said in its 2017 annual report.

"The government is currently in the process of evaluating this proposal to decide on the most appropriate technology for coal power plants in the country.

"The preferred fuel options for power generation recommended therein are hydro, fuel-oil, coal, LNG, solar, wind and biomass."

There have been suggestions that coal and liquefied natural gas should comprise about 30 percent of the sector, large hydro and renewables that can be dispatched about the same and the balance from less reliable sources and residual oil, which is a by-product of refining.

The central bank said state-run Ceylon Electricity Board has proposed two 300 MW coal plants which are not in a currently approved longer term generation expansion plan.

"The government is currently in the process of evaluating this proposal to decide on the most appropriate technology for coal power plants in the country," the central bank said.

Sri Lanka ended up with Chinese built coal power complex which less clean than the original cleaner Japanese plant proposed by the CEB due to protests from environmentalists and religious lobbies.

The newer plants proposed by the CEB include covered conveyors and other methods to reduce pollution.

The power utility has also proposed so-called 'super critical' coal plants where the steam boilers and turbines operate at high temperatures and pressure which improves efficiency of converting coal to electricity.

Sri Lanka's power regulator controversially struck off coal plants on the basis that President Sirisena and the government has decided on a no-coal policy and claiming that coal was more expensive than liquefied natural gas. The plan heavily weighted towards LNG has led to a dispute with the Ceylon Electricity Board.

President Sirisena announced the cancellation of a 500MW coal plant in Sampur in 2015, which was on the verge of being tendered, causing tens of billions of rupees of losses to the country each year.

At a recent meeting with power sector officials and union of power engineers, the President had denied that he banned coal, saying he objected to the coal plant due to some clauses, sources familiar with the matter say.

The President also asked the Public Utilities Commission of Sri Lanka and the utility to discuss disputes and resolve the matter.

The engineers union has announced a work-to-rule campaign from May 08, which may lead to prolonged power outages.

Sri Lanka cut fuel bills 25 percent in 2015 with the help of coal power despite currency depreciation, but the 900MW coal complex is now running near full capacity. (Colombo/May02/2018)

 


 

3 Comments

  1. kanagagnana May 04, 08:24 AM

    Hope CEB will have well-trained staff to operate and Maintain this new high-pressure Steam Boiler Turbine technology well before it is constructed. Even the design must be made foolproof, not like Norochcholai which seems to go through so much of problems polluting and harming the public costs of which can't be quickly estimated. -
    The actual statement by the Central Bank is:-
    During 2017, the Public Utilities Commission of Sri Lanka (PUCSL) approved the LeastCost Long-Term Generation Expansion Plan (LCLTGEP) for the CEB for the next 20-year period with the aim of ensuring energy security while considering both financial and economic costs of energy generation. As per the approved LCLTGEP, 242 MW of major hydro, 215 MW of mini hydro, 1,389 MW of solar, 1,205 MW of wind, 85 MW of biomass, 4,800 MW of liquefied natural gas (LNG), 320 MW of furnace oil and 105 MW of gas turbine-based power plants will be added to the installed capacity of the country during the 2018 - 2037 period. It is crucial to execute the proposed generation plan in a timely and effective manner in order to meet the growing energy demand at the lowest economic cost to the economy. The generation plan approved by the PUCSL consists of 4,800 MW of natural gas-based power plants, although Sri Lanka does not have a natural gas supply at present. Hence, it is essential to expeditiously develop a reliable source of LNG supply to the country for the timely commissioning of LNG-based power generation. Failure to do so will compel the LNG power plants to operate on fuel oil, significantly increasing the generation cost of the CEB. In addition, the failure to achieve the milestones of LCLTGEP would result in the CEB having to resort to emergency power purchasing agreements with the high-cost independent thermal power producers. The share of thermal IPPs in total energy generation is already at a considerably high level, which was 17.1 percent in 2017. The Financial Impact of Delay in Implementation of Power Plants report released by the PUCSL in 2017 forecasts that the implementation delays in the power generation expansion schedule that is givenin the LCLTGEP for 2018 to 2020 period will cost the CEB approximately Rs. 50.62 billion. Hence, the timely implementation of the generation expansion plan is vital to ensure energy security as well as the financial viability of the CEB.Meanwhile, the CEB has proposed to develop two 300 MW coal power plants by 2025, which are not in the LCLTGEP plant schedule approved by the PUCSL, with the aim of minimising the financial cost of power generation in the country. The government is currently in the process of evaluating this proposal to decide on the most appropriate technology for coal power plants in the country. Moreover, the Ministry of Power and Renewable Energy submitted a revised version of the new National Energy Policy and Strategies to the Cabinet of Ministers for approval. The preferred fuel options for power generation recommended therein are hydro, fuel-oil, coal, LNG, solar, wind and biomass. It is important to determine the optimal mix of energy sources for Sri Lanka in terms of both financial and economic costs, and thereby the long-term generation expansion plan for the country, without considering power projects in an ad-hoc manner.
    Please note the items marked between the inverted commas From: - Chapter 3. Economic and Social Infrastructure https://www.cbsl.gov.lk/.../annu.../2017/en/7Chapter03.pd

  2. Abey May 02, 08:00 AM

    Yes bring back Coal. Screw the environment. Medical costs will far outweigh what you save in producing power. I guess the deciding factor is the millions of Dollars of cash that will go in to the coal mafia. This is YAHAPALANA for sure

  3. sacre blieu May 02, 07:50 AM

    Promises to improve the efficiency of a new plant alone will not do, when the installed one is finally found to be outdated technology due to corruption and fraud. Even the existing one was said to have a fly ash arresting unit which seemed to have been sidestepped. Could not this fly ash be used to manufacture cement. The Cement corporation should be revived and made operative with modern machinery.

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