Sri Lanka faces power shortage with coal plant delay

ECONOMYNEXT – Sri Lanka will face power shortages in two years because of delays in building a planned coal-fired power plant, and consumers will be forced to pay higher electricity bills, an energy expert has warned.

The project to build a coal-fired power plant in Sampur, in eastern Trincomalee, which was first mooted two decades ago, is effectively on hold, said Tilak Siyambalapitiya, a former planning engineer at the Ceylon Electricity Board and now a consultant.

The plant, to be built as a joint venture between the CEB and National Thermal Power Corporation Ltd. (NTPC) of India was urgently needed, he told a seminar on “India-Sri Lanka Relations in the 21st Century”.
 
No other big power plant was planned, although growth in demand for electricity has picked up in the last two years as commercial sector activity grew, after having remained slow in earlier years.

“Electricity sales growth is increasing. It’s an alarming situation. One could say it is very good, but suppliers get nightmares,” Siyambalapitiya told the forum organised by the Bandaranaike Centre for International Studies.

The country would be forced to go for costly diesel-fired power plants to meet the anticipated shortfall as it had done in 2001 when there were similar delays in building the first coal-fired power plant.

“We can expect a government announcement by 2018, when indications of the crisis become apparent – typically (during the hot months from) February to April,” he said. “The government will say ‘we will pay the bill for diesel and customers would not be burdened’. There will be load shedding.”

The solution should be to let Sampur be the next plant as it was about to get into the construction phase and to renegotiate any unfavourable clauses in the agreement with India, Siyambalapitiya.

The government has said it wants to convert the Sampur power plant into a gas-fired one because of the availability of natural gas offshore and the environmental costs of burning coal.

(COLOMBO, June 17, 2016)