The utilities regulator, the Public Utilities Commission of Sri Lanka (PUCSL), in mid-2017 approved a no-coal LCLTGEP, which was slightly modified for higher than planned liquefied natural gas power generation in the short term and heavy renewable energy in the long term, in line with the government policy, as the PUCSL has the legal power to do so.
The CEBEU has maintained that the PUCSL’S decision was illegal, although both the PUCSL Act No. 35 of 2002 and the Electricity Act No. 20 of 2009 grant the PUCSL wide-ranging powers to regulate and promote the efficient allocation of resources. The no-coal scenario was one of many options submitted by the CEB but the PUCSL, when it approved the no-coal LCLTGEP, had said that the approved plan would save US $ 1.13 billion in taxpayer finances in present value, when taking into account the social and environmental costs, compared to the coal-heavy LCLTGEP preferred by the CEB.
The dangers of coal power generation have been aptly demonstrated, with the country’s sole coal power plant in Norochcholai, which is prone to frequent breakdowns, causing health complications to employees and nearby residents and causing the death of marine life in the surrounding areas.
Just last week, one of the units in Norochcholai was suspended from activity since the CEB had been operating it with faulty filters. Two years ago, environmentalists won a case at the Supreme Court to halt the construction of a second coal power plant in Sampur.
However, during the consultation process for the LCLTGEP, both private and public sector experts had pointed out how the CEB had manipulated data in order to make its preferred coalheavy LCLTGEP seem cheaper and more feasible.
Further, the coal tenders approved by the CEB subsidiary Lanka Coal Company (Private) Limited have always been awarded to one company over the last nine years, amidst intense controversy, which even saw the Supreme Court express its displeasure on one occasion on the conduct of officials when awarding tenders. However, the CEBEU stressed that there are no personal benefits for its members from the LCLTGEP it is backing.
Since the CEB engineers have so far refused to award tenders based on the approved no-coal LCLTGEP, the taxpayers had by last November incurred Rs.50.8 billion in losses due to cost escalations from sourcing costly emergency power and since then has been incurring Rs.3.43 billion in losses per month, according to the PUCSL estimates.
The PUCSL and independent experts have voiced concerns over a power crisis emerging over the coming three years if the CEB does not tender the power plants listed in the approved LCLTGEP. However, Power and Renewable Energy Ministry Secretary Dr. Suren Batagoda, who too had shared this view, according to official ministry documents, this month reverted his position, saying that there is no impending power crisis.
The PUCSL has called on the government to change the structure of the power industry if the CEB is unable to follow through the approved LCLTGEP, while the CEBEU, as part of its trade union action, is calling for the replacement of key staff members in the PUCSL with “experienced and honest professionals not having vested interest”. If the government won’t meet the demands of the CEBEU, it is willing to escalate trade union action, the letter said.