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Friday June 14th, 2024

Sri Lanka could face long power cuts, water shortages, Southern grid failures

PARCHED: Hydro reservoirs are down and the bottom is exposed.

ECONOMYNEX T- Sri Lanka could face multi-hour power cuts, blackouts in large parts of the grid and water shortages in Colombo if the current policy of avoiding one hour load shedding at any cost is continued, industry watchers familiar with the ground situation have warned.

Sri Lanka Ceylon Electricity Board has sought permission for around hour power cuts to conserve water in the drought period of February and March after a coal plant outage was compounded by liquid fuel shortages.

Without Samanalawewa the 132kV grid of the CEB which serves the highly populated Southern grid faces serious power deficit. The CEB is also running short of water at Kotmale and Victoria which is used to maintain the frequency of the grid at 50 cycles.

Sri Lanka is facing forex shortages due to money printing which made it difficult to suddenly import extra fuel when the coal plant broke down.

Sri Lanka’s political authorities as well as the regulator have denied permission for one hour planned cuts.

Water Crisis

Avoiding one hour power cuts is leading to further severe depletion of water storage.

Industry analysts say it is no longer practical to continue to run down hydro reservoirs to avoid planned load shedding.

Petroleum Minister Udaya Gammanpila had warned of 3 to 4 hour power cuts from late March.

“What the minister said is correct,” an industry official familiar with the situation said. “This can happen and also water to Ambatale pumping station in the Kelani River will be reduced and Colombo could face water cuts. It will be especially bad if the usual April inter-monsoonal showers are delayed.”

“I do not think the President has been properly made aware of this.”

In order to ensure water supply to Colombo, the Ceylon Electricity Board stores water in the Moussakelle reservoir in the Maskeli Oya and Castlereigh in Kehelgamu Oya, the two largest tributaries in the upper reaches of the Kelani River.

The water is then systematically used during the dry season to generate power, allowing Colombo to be supplied water in March and April until the showers return.

Moussakelle storage has already depleted to around half its capacity and Castlereigh to 30 percent.

Based on the current usage to avoid power cuts at any cost, Castlerigh Reservoir is expected to run dry (minimum operating level) by the end of February. Moussakelle will reach minimum operating level by end March.

With minimal rains, Kelani River water levels will fall to low levels without water from the two reservoirs.

Other reservoirs such as Laxapana and Canyon are small ponds with no storage.

The CEB generally operates a priorty of drinking water first, irrigation second and their own power the third, industry officials said. It has now been turned upside down under in the bid to avoid power cuts at any cost, which is increasingly looking like a gamble with the wrong odds.

However to avoid power cuts, water has been released which would have been better left for farming.

The CEB has also not renewed the ACE Matara and ACE Embilipitiya private plants.

There is also heavy opposition to renewing existing plants in times where there are no emergencies, forcing the CEB to buy power at high prices at the last minute when the bargaining power of the owners are high even if competitive tenders are called.

Perfect Storm

In two other serious complications, water in the Victoria and Kotmale reservoirs which are used to match generation to demand and keep the frequency of the grid at 50 hertz is also running dry.

Samanala Wewa is expected to reach minimum operating level by the second week of March and its use has to be stopped immediately according to industry analysts.

The lack of Samanalawewa, which is complex problem involving the CEBs 220kV and 132kv transmission line interconnections.

Without Samanalawewa the 132kV grid of the CEB which serves the highly populated Southern grid faces serious power deficit.

Most of the larger generators in the CEB system are connected to the 220kV system.

Some of the most expensive plants which are expected to be used only for peaking are connected to the 132kv system.

Overloading of the 132kV system could result in tripping of sections of the grid, tripping of generators including coal power plants which would lead to blackouts in sections of the grid or cascading failures.

The CEB has called tenders and are building interconnection as demand grew, but Covid and other factors have also delayed some projects.

Due to the complexities technicalities of running a national power grid as well as fears of running afoul of authorities, CEB officials are often at a loss to explain to the public exactly what the problem.

The CEB has also got down in infighting amid the New Fortress Energy deal and an internal Power Crisis Committee which usually meets and takes decisions ahead of time in other years has also not met for many months, sources said.

Most of the problems in Sri Lanka’s power sector stems from not building plants planned in the long term generation expansion plan in time, sometime due to political or other opposition as well as tender benders, critics say.

The current situation had long been predicted by analysts and the CEB as soon as the Trico plant was scuttled and the tender for the dual fuel plant was delayed. Power shortages were predicted from 2018 onwards in the dry season.

However the Covid crisis delayed demand growth.


Sri Lanka consumers warned on impending ‘electric shock’ after coal plant scrapping

Sri Lanka faces power shortage with coal plant delay

The forex and fuel shortages have also been predicted due to increasingly discretionary aggressive monetary policy that intensified after the end of a 30-year war. (Colombo/Feb12/2022)

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Sri Lanka opposition leader proposes Grama Rajya system in addition to 13A

Opposition leader Sajith Premadasa (r) – File photo

ECONOMYNEXT — Sri Lanka opposition leader Sajith Premadasa has proposed devolving power to the village level through a Grama Rajya system in addition to implementing the 13th amendment to the constitution.

Speaking at an event in Jaffna on on Wednesday June 12, Premadasa said all provinces will benefit from the 13th amendment.

“Whatever one’s ethnicity, religion, status or region, this country has citizens of equal level. They’re all Sri Lankan citizens.

“There is no division or grouping.  As we give you and every other province what you should be given through the 13th amendment, we must implement a Grama Rajya system,” Premadasa said, addressing a crowd of school children and other attendees.

Premadasa’s assurance of implementing the 13th amendment has already drawn some protest in the south.

A collective of civil society organisations held a protest outside the office of the leader of the opposition in Colombo on Thursday June 12.

Calling itself the ‘Coalition Against Partition of Sri Lanka’, the group carrying national flags marched up to the opposition leader’s office Thursday June 13 morning and demonstrated against the full implementation of the 13th amendment.

“We arrived here today to hand over a missive against devolving police powers, land powers and judicial powers. If Mr Premadasa is inside, come outside,” Jamuni Kamantha Thushara, Chairman of the Citizen’s Movement Against Fraud, Corruption, and Waste, was seen declaring at the site.

“First of all, tell us what we stand to achieve by dividing and giving away the north and east,” said another protestor, warning against bringing the 13th amendment “anywhere here (paththa palaathe)”.

A police officer at the scene the protestors that a secretary to the opposition leader was ready to accept their letter.

“In Kilonochchi, he says the 13th amendment will be implemented. The votes in the north are going to be decisive this election. To win those votes, President Ranil Wickremesinghe, Sajith and Anura Kumara Dissanayake all say they will implement the 13th. We will not allow this country to be divided into nine pieces,” said Thushara.

Ven Balangoda Kassapa Thero, who was arrested on June 06 during a protest against the new Electricity Act, was also seen at Thursday’s protest. The Buddhist monk requested for a debate with Premadasa on the matter of the 13th amendment. (Colombo/Jun12/2024)

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Sri Lanka rupee closes flat at 303.85/95 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed broadly flat at 303.85/95 to the US dollar on Thursday, from 303.80/304.00 to the dollar the previous day, dealers said. Bond yields were down.

A bond maturing on 15.12.2026 closed at 10.00/30 percent, down from 10.20/40 percent.

A bond maturing on 15.10.2027 closed at 10.60/75 percent.

A bond maturing on 01.07.2028 closed at 11.00/15 percent, down from 11.15/40 percent.

A bond maturing on 15.09.2029 closed at 11.80/85 percent.

A bond maturing on 15.05.2030 closed at 11.85/12.05 percent, down from 11.90/12.05 percent.

A bond maturing on 01.10.2032 closed stable at 11.95/12.15 percent. (Colombo/Jun13/2024)

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Sri Lanka sells Rs295bn in 2027 to 2031 bonds

ECONOMYNEXT – Sri Lanka has sold 295 billion rupees in 2027, 2029 and 2031 bonds, data from the state debt office showed.

The debt office sold an offered 60 billion rupees of 15 October 2027 at an average yield of 10.30 percent.

All offered 125 billion rupees of 15 September 2029 bonds were sold at 11.00 percent.

All 110 billion rupees offered of 01 December 2031 bonds were sold at 12.00 percent. (Colombo/May13/2024)

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