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Thursday September 29th, 2022

Sri Lanka electricity strike toned down over Presidential promises: Update

ECONOMYNEXT – Sri Lanka’s power engineers have toned down a strike which plunged parts of the country in darkness overnight following discussions with President Gotabaya Rajapaksa that high prices for private renewable power will only be given for smaller plants, union sources said.

The strike is continuing at low intensity, according to union sources.

The government has proposed an amendment to the Sri Lanka Electricity Act to be debated in parliament on June 08, which the engineers union of the state-run Ceylon Electricity Board say will lead to legalization of large scale procurement scams in renewable power.

Opposition leader Sajith Premadasa clashed with Energy Minister Kanchana Ratwatte calling for a delay in dropping competitive bidding and asked for a compromise based on consultations with stakeholders who had knowledge.

RelatedSri Lanka opposition, energy minister clash over ending competitive bidding for private plants

The Ceylon Electricity Board Engineers Union gave notice of the first strike since 1996 over the amendment to the law, which is to be debated in parliament on June 09.

Following a telephone conversation with President Gotabaya Rajapksa overnight a full-scale strike was called off.

Engineers have proposed that so-called ‘feed in tariffs’ or pre-determined high prices be limited to small plants.

Among suggestions to prevent large scale costs being imposed through feed in tariff corruption, one suggestion is to introduce ‘benchmarking’ where high feed in tariff way out of global rates cannot be charged from the Ceylon Electricity Board.

Feed in tariffs in the past have led to high prices and what is described by some critics as an unusual green scam.

Feed in tariffs were linked to rising fuel prices through a mechanism called ‘avoided cost’ where renewable prices went up in tandem as oil prices went up.

Sri Lanka’s renewable procurement prices fell to around 12 to 14 rupees a unit unit compared around 20 to 30 rupees under pre-determined ‘feed in tariffs’ at the then prevailing prices.

Renewable costs fell as Chinese technology came in and efficiency improved.

The current trade union action involves the planned procurement of large plants from private suppliers at high prices including India’s Adani at around 7.75 US cents a kilo Watt hour (unit) through feed in tariffs instead of competitive bidding, according to unions, who say it is about double the global price.

In local currency it is about 28 rupees a unit which compares to around 30 rupees for coal at current prices.

Renewable energy prices have shot up to over 4.0 cents a unit in 2022 from around 3.0 cents earlier amid sudden demand due to high oil prices and international private firms are rushing to lock in 20 to 25 years contracts now using various methods ‘persuasion’ critics say. (North American Renewable Energy Prices Skyrocket Nearly 30% in One Year)

The US Fed has already started tightening monetary policy which is expected to end energy and food commodity bubble fired by Jerome Powell from next year. (US inflation likely to stay high in 2022, 2023 even if Fed tightens now).

Renewable plants (other than dendro) are intermittent, variable and seasonal and cannot be directly compared with thermal and large stored hydro plants which can be used as base load and also for peaking as necessary (dispatched.)

Grids are compelled to absorb renewable power any time they come, they also usually do not generate reactive power, has no ‘intertia’ to absorb demand changes to maintain frequency and prevent blackouts which tends to de-stabilize a grid when large shares come from small distributed plants.

The highest cost small gas turbines (Rs189) of the CEB which are used by special interests to mislead the public – which were due to retirement decades ago – are sometimes used to provide reactive power for renewable energy, industry officials say. (Read about gas turbine reactive power and renewable energy).

Gas turbines are peaking plants, but are used for baseload in Sri Lanka due to politicians and lobbies blocking planned coal plants.

The European Union is currently evaluating the possibility of raising the overall renewable energy target to 45 percent by 2030 from 40 percent. (European Commission analysing higher 45% renewable energy target for 2030).

There are technology to produce reactive power, grid enhancements, battery and pump storage to store power during daytime all of which require more investments to the grid over time.

Sri Lanka’s state-run Ceylon Electricity Board in its long term generation plan has already proposed a 53 percent target at the least cost where renewable additional go in step with network expansion and ‘holding capacity’ for renewable.

Related

Sri Lanka generation plan renewable power share for 2030 equal to Germany: CEB engineers

Some observers say the CEBs long term generation plan is perhaps the last remaining evidence based planning document in the government of Sri Lanka which can be perused by the public. However the document is bulky and is difficult to digest.

Sri Lanka’s public sector had gradually lost policy making power (green paper, white paper, expert consultation, public consultation, policy) and policy developed and decided in dark rooms where elections manifestos are made by special interests.

Sri Lanka has a rickety grid which is built for central distribution, though there is a program to expand the network over time to absorb renewables. (Colombo/June08/2022)

Comments (2)

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  1. Dhammika Guneratne says:

    SL has to move towards SOLAR and WIND power generation to cater to its energy needs and preference MUST be given to local companies so that the money remains with in SL .

  2. sg says:

    So call unions have been disrupted every time that brought good amendments to the energy enhancement of the country. Need to privatize all those sectors and ensure availability of the energy for people at affordable prices than the increasing the so-called mafia.

View all comments (2)

Comments (2)

Your email address will not be published.

  1. Dhammika Guneratne says:

    SL has to move towards SOLAR and WIND power generation to cater to its energy needs and preference MUST be given to local companies so that the money remains with in SL .

  2. sg says:

    So call unions have been disrupted every time that brought good amendments to the energy enhancement of the country. Need to privatize all those sectors and ensure availability of the energy for people at affordable prices than the increasing the so-called mafia.