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

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.

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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)

 

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