Norochcholai adds to CEB’S losses

Minister blames CEB, Chinese company and consultants for the regular malfunctioning of the coal power plant

Design and technology issues at the Norochcholai Chinese built coal power project is adding to Ceylon Electricity Board (CEB) losses, Minister Power and Energy, Champika Ranawaka conceded this week.minister Ranawaka, in an interview, told the Sunday Times that the delay in starting the project initially, deprived Sri Lanka from getting advanced Japanese technology for the project, eventually deciding to go along with Chinese technology.

“We have a design problem, as well as the unit is too big. Whenever there is a breakdown, the cooling time is as high as 15 to 16 days,” Mr Ranawaka said.

“The CEB, the Chinese company and the consultants who approved it should be held responsible for the current situation”, he said.

“We did not get it at the right time, nor get the best place and also did not get the best technology,” he added.

The failure of the Norochcholai power plant to generate electricity as agreed last year, cost the CEB Rs 14 billion, as they had to resort to thermal power to bridge the gap.

“We expected 1,500 Gwh, but they gave us only 1,000, forcing us to get the rest from Diesel,” he added.

The Norochcholai power plant has been malfunctioning a number of times since it was commissioned last year, and the latest was in January. After more than four weeks, the plant was back in operation this week.

Mr. Ranawaka said that the original propos- al for coal power was launched during President J.R. Jayawardene’s government, but due to protests from villagers and the Catholic church, the project was delayed, resulting in the Japanese withdrawing their offer.

He said that, eventually, the President Chandrika Kumaratunga government went ahead with the Chinese in 2005.

“If this project came on in 1990, we would have been buying a unit at 90 cts, but today, only the energy cost is Rs 7.90 per unit, without capital cost,” he said. “This also excludes transmission and distribution cost,” he added. He said that Sri Lanka is yet to start paying the capital cost of Norochcholai.

He said that the coal power plant has been in operation for one year, and among the problems they have encountered are spare part issues and of operators, which they are now in the process of rectifying.

The issues come as preparations are under way to go ahead with the second phase of the project.

Mr. Ranawaka said that they have appointed an expert team to prepare the groundwork for the second phase, giving them the opportunity to hire international experts, while calling for international Tenders.

Meanwhile, CEB’S power generation bill is on the increase, with the increasing fuel bill adding to its losses. Currently, 86% of the power requirement is generated by thermal power. In 2010, the fuel and generation cost amounted to Rs 82 billion. The estimated cost for 2012 is Rs 163 billion. However, the minis- ter said that the electricity tariff has not changed proportionately.

Mr. Ranawaka said there is an accumulated loss of Rs 117 billion, as a result of not revising the prices in the previous years. “Currently, there is a vast gap between income and expenditure, as we are using fuel. Diesel accounts for about one third of the generation.

“We get diesel at market price, hence our prices have been increased. Earlier, heavy fuel was given free, but now, the heavy fuel price was increased from Rs 40 to Rs 65 and Naptha from Rs 60 to Rs 90. Low sulphur heavy fuel was increased from Rs 52 to Rs 75. Diesel from Rs 76 to Rs 115”, he added.he said the total effect of this increase on the CEB is Rs 40 billion, but the fuel surcharge introduced last month will bring in only an estimated Rs 28 billion this year. “We were estimating a loss of Rs 33 billion this year before the revision, but now that has gone up to Rs. 50 billion,” he added.

He said that, by 2014, the government proposes to go for Liquefied Natural Gas, with a new plant.

Meanwhile, the arrears due to the CEB from mainly State institutions stand at Rs 12 billion, while the Treasury owes another Rs 9 billion for street lighting.

Mr. Ranawaka said that his Ministry is focusing on a major Energy conservation programme shortly.

“The biggest problem is between 6.30 pm and 9.30 pm. If one 60w light is switched off in each house, we can save 175Mw per day. Annual saving would be Rs 4.5 billion. Ironing clothes during that period too adds to the cost. If ironing is not done during that period, we can save 48 Mw. If fridges are switched off for two hours we can save 215 Mw, which will save Rs 8 billion per annum,” he said.

He said that one of the biggest problems is that people do not know to use electricity efficiently, and the Ministry will be soon embarking on this programme.

He also said that they will soon undertake an energy audit in some 6,000 companies, to help them use electricity efficiently.