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Sri Lankan technocrats call for integrated energy planning

COLOMBO, Dec 04, 2014 (EconomyNext) – Sri Lanka’s energy sector urgently needs integrated planning, the lack of which has led to high prices and unsustainable practices, senior officials say.

Better planning was required to ensure using the optimum mix of energy sources and fuels not only in generating grid electricity but in transport and industry as well, they said.

"It’s high time we look at energy as an integrated sector in planning and implementation which is what we are not doing at all at this moment," declared Shavi Fernando, General Manager of the state-run Ceylon Electricity Board (CEB).

The island has almost a dozen government institutions including the CEB trying to influence energy policy as well as numerous private sector players.

These different interest groups complicate integrated planning efforts, Fernando said, noting how the CEB faced difficulties in projecting its requirements while other players had similar problems communicating theirs.

"We (CEB) order fuel which we don’t take. We tell them (petroleum ministry) to bring emergency fuel stocks which we don’t consume because the rains come down. It’s not easy to manage this sector in that fashion any more.

"So we must get together sooner rather than later," Fernando told an energy forum organized by the Petroleum Resources Development Secretariat and University Grants Commission.

Susantha Silva, Managing Director of Ceylon Petroleum Corporation, explained that buying fuel on world markets was a complex affair with constantly shifting trading and shipping patterns which consumers were usually unaware of.

"Oil markets behave in certain patterns. We buy during what are called oil marketing windows," he said.

"We need to buy oil two months ahead. So if people ask if the price has fallen to 75 dollars a barrel today why we can’t reduce prices, it’s because what we sell today is what we bought two months before. But they’ll get the benefit of lower crude prices later."

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Energy consultant Tilak Siyambalapitiya, a former CEB engineer, said decision-making on energy generation and pricing should be left to professionals and politicians should not interfere with pricing.

Siyambalapitiya, Managing Director of Resource Management Associates, called for market-based pricing where consumers get the benefit of price cuts when global oil prices fall.

But he said consumers should also accept price hikes when world oil prices rise.

The CEB’s Fernando, who is also president of the Institution of Engineers of Sri Lanka, recalled how persistent delays in going for coal-fired power plants because of lobbying against coal led to a shortage of electricity generation capacity, forcing the CEB to opt for emergency procurement of high-cost oil-fired thermal power plants. 

"Thanks to all the lobbying against coal at the time when we wanted support for coal, we had to go for the most insensible thing of generating electricity using oil, which to-date is done only in small island countries and the Middle East. Only Sri Lanka dies it."

The island’s electricity prices were among the highest in the South Asian till recently. The government reduced prices in September after the commissioning of a new coal power plant and ahead of a snap presidential poll on January 8, 2015.

Damitha Kumarasinghe, Director General of the Public Utility Commission which regulates the electricity market, said the dispatch of power changes with changing weather patterns and availability of hydropower.

The energy system was further complicated by competing demands on hydro-electric reservoirs from irrigation, drinking water and flood control requirements, he added.

 

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