Written By NAFSO on Friday, June 07, 2013 | 11:07:00 AM
High Tariff spurs growth in solar power
Dramatic and Tough changes required at CEB
By A Special Correspondent
The sky rocketing price of electricity has clearly caught the imagination of the public but it has also spurred large numbers to be interested in alternative sources of power like solar energy and the quest for energy-efficient appliances. In the midst of all this seeming chaos the government has decided on yet another coal power plant – not quite having got its first foray quite right, having shoved, pushed and virtually coerced the Chinese to deliver the project well ahead of its planned commissioning date – giving the impression that prices may be lowered and stabilised over the long term. However, the available evidence suggests that Sri Lanka’s power industry will continue to be volatile as never before when it comes to stabilising prices and perhaps even when it comes to stabilising the availability of power.
The Ceylon Electricity Board (CEB) has a wonderful tool: it is used for planning purposes and the old WASP Power Generation planning Tool will pick up more and more Coal plants into the system as the load (the requirement for power) increases in Sri Lanka. The recent high tariff increase will necessarily tone down the load increase – at least for few years – with consumers going for more efficient equipment like the deep freezer, fridge, fans, TV, lights – and the load growth will definitely decrease in the short term. In this scenario the CEB really ought to promote Energy Management – although if efficient Energy Management is accomplished, the CEB will actually see a decline in its revenue.
Rural electrification and high cost of ‘peak power’
Taking electricity to the rural areas is easier said – especially during electioneering - than done. However, every new rural electrification project undertaken – even with international funding for foreign components of the project, at supposedly ‘soft rates’ – does increase sales by a small amount. Rural consumers mostly contribute to the ‘High cost peak’ electricity. That is because the typical user of electricity in rural areas does so usually during peak hours: they may be out most of the day and consume power only in the evenings when the lights, the TV and so on come on. This contrasts largely with the urban areas where the base consumption is virtually constant with the use of fans, air conditioners, fridges, freezers etc.
However rural electrification comes at a cost and the provision of electricity in rural areas is more politically driven than a revenue generating exercise. Studies have shown that the CEB will never be able to get a decent rate of return on their expenditure in terms of rural electrification but politically of course the returns are excellent.
This aspect of the CEB operation being funded by the Treasury is to be welcomed but taken alongside the context that the Treasury has also got to pay for other ‘fancy’ projects continuously, means that it is a burden the Treasury will not see diminish anytime in the near future. The high cost of peak power is astronomical: CEB is buying at close to Rs 40/kWh and selling close to Rs 4/kWh – a rather spectacular loss for the CEB. The CEB buys from Private Power generators and uses their own, less efficient gas turbines at a cost of between Rs 35 to Rs 40. However by the time this power is taken to the plug-point there is a 20% loss in the system. The peak time loss is 20%, the average loss is 12% with the average off-peak loss about 10%
It is of course government policy to electrify all the houses in Sri Lanka. That is a welcome policy and in fact it is claimed that Sri Lanka enjoys 95% electrification now. At the last count, the CEB was not registered as a charitable organisation in order to give out subsidised electricity. In effect the government must permit the CEB to charge the consumer an equitable amount but before they are permitted to do so the CEB will need to have a complete overhaul. Corruption, poor planning and planning that is controlled by entrepreneurs with vested interests like the diesel mafia for example, must necessarily be addressed. It must be noted that taking electricity to remote areas – for the politician’s dream voter, the rural poor – costs much more than the Private Power purchased during the peak. The Transmission and Distribution losses are highest during this peak period from 6 p.m. to 10 p.m. So taking the Rs 40 purchased power through these long lines with the high peak time loss in the system of more than 20%, the actual cost of supply increases to Rs 48 and so the CEB losses mount.
LECO hardly feeds many rural areas so are aloof from this particular problem. LECO on the other hand is accused of a number of controversies said to be with or without political connivance – but the bottom line is that with all these ‘conundrums’ it results in further loss to CEB – having given the best of the high-end consumers to LECO.
This of course was done in the name of privatization – done to improve the efficiency of CEB. Staff at LECO is comparatively well paid and they serve their limited customers with a reasonably better service having made a high investment.
Sampur Power – The less efficient alternative
Coming back to the Sampur Power plant available information suggests that it is a less efficient plant. At today’s costs the fuel alone will be Rs 13.80/kWh. When the plant gets commissioned – after the inevitable delays and delay charges due to many unknown reasons – it will cost much more. Depending on the interest rate of the loan component, the cost per unit at Sampur could be very much more than Rs 20/kWh and will increase with time as the coal price is expected to increase. There is also the small matter of a heavy carbon tax on coal from Australia which will determine the Asia Coal Price. The question on most minds of course is whether the CEB can continue to survive losing money as it does. The ideal scenario would be for the government to permit the CEB to charge the consumer what it actually costs not a number magically picked up which may or may not sound right to the people. To politically save face the government could, suggests a group of senior engineers, hand out Samurdhi coupons to the poorer electricity consumers to pay their bill. This would not seem entirely improbable when one considers that the government is saving on the costly import of kerosene and selling it on to the rural consumer at a subsidised price. The flip side of that particular coin is that subsidised kerosene has for long been mixed with low-priced vegetable oil and replaces the expensive diesel used mainly in the fishing industry. A partial load spells wastage
Already the coal plant at Norochcholai is in deep water unable to produce the full load. A plethora of causes exist amongst which is the request by the government to the Chinese contractors to rush the completion date very much earlier than planned, the supply of under specification coal and the fact that the training of local engineering staff to run the machinery fully has been marked with danger and dispute. A smooth changeover it has not been.
In that context a new better functioning coal plant in Sampur may be greatly required by the CEB in the future as there is expectation that Norochcholai is still several moons away from working at its best. The problems are compounded by the fact that a veritable tussle is taking place at Norochcholai between the local Mechanical and Electrical engineering staff. These personal tussles does not augur well for Phase II of the project and with the knowledge of hindsight, engineers are doubtful if Norochcholai will ever become the flagship it most certainly had prospects to be. Recently, a senior engineer told The Sunday Leader that, “having Sampur will help to cover the shortcomings at Norochcholai. There may not be enough system load to take when all these 3 plants come into operation. To keep large spinning reserves for stability of the system the coal plants will have to be run at partial load – often stopping and starting. The effect of this constant stopping and starting and reduced capacity is that the lifetime of the plant will be considerably ruined. One need not travel too far to see how a machine can lose its designed-lifetime. The 50 MW Steam plant at Kelanitissa was started on a daily basis for peak power and stopped after system peak which was against any standard Power station practice so as to meet the then system peak requirements. It was a political decision as opposed to an engineering dictat – do that and it was done. The established lifetime of the German boiler was seriously affected and says our source, “We also had three different fires in the Boiler with major damage to other equipment as well”. In what now seems to be a comedy of errors, the Sri Lanka Fire Brigade could not connect its hosepipes to the station fire fighting outlets. The threads of the German pipes were metric and the Fire Brigade had British inch threads. What types of problems await at Sampur is of course yet to be known. However the signals are ominous. The CEB original Coal study placed the first Coal plant in Trincomalee. Large sum of money was spent on the study and the best place was also selected and acquired for this purpose. That place was not Sampur. The selection of the new site is entirely political. What new problems will crop up as construction begins are yet unknown. More pilling may be required and this can delay as well as increase the cost to construct.
Power, India and Tamil Nadu
India came with this idea of a coal plant together with the Interconnection to South India with DC link by an underground sea cable from Mannar to TN. Will this ever come is a question mark. It was meant to facilitate the transfer of power in both directions to feed the early morning peak due to very large free water pumping load in TN. The CEB could get some power during the Sri Lanka system peak in the evening and night from 6 p.m. to 10 p.m. Interconnection between states and countries are very beneficial to make the system reliable. However given the current anti-Sri Lanka sentiment emanating from Tamil Nadu it is highly unlikely that for strategic reasons Sri Lanka will ever go down that route.
And in Europe
Germany absorbs 50 % of its day peak load with Rooftop and other Solar PV plants. Wind power plants come on in the evening and are strong through the nights. These two are complementary. Germany is able to maintain the stability of its electrical system due to the interconnections they have with other EU countries. Unfortunately due to the vicissitudes of regional politics Sri Lanka’s CEB will not have the luxury of this type of “power sharing” with Tamil Nadu.
Giving CEB concessions
Allowing the CEB to directly import Liquid Fuel for all the power generation without any taxes as for coal will make the CEB viable with the old tariff. Another Liquid fuel company can in all earnestness be started and much more deep pockets can be filled. Yet on the plus side, the tariff on electricity can be taken back to the previous value!
There are plus and minus points in getting the ‘Dirty Coal’ plant at Sampur. Even if Sri Lanka’s CEB manages to sell power to South India, as a nation we will be laden with all the Mercury andFly Ash Green house gases which produce acid rain etc. Some serious brainstorming is required by the specialists concerned before going ahead with this project. One school of thought holds that it may be a better idea to rehabilitate the Norochcholai plant to make it reliable and fuel efficient. Whichever way, says our sources from the Energy industry, with or without Sampur is not the question. The real answer lies in getting the CEB revamped, cutting the corruption out and infusing the CEB with a sense of discipline and professionalism which although latent has not some to the fore – as yet.