Energy analyst questions CEB's costliest route to power generation

Questions are being asked over why the cash- strapped Ceylon Electricity Board (CEB) ran a pair of costly diesel-powered gas turbines from January till midMarch when there was sufficient water for cheap hydropower.

The turbines were put to use even while the coal- powered Lakvijaya plant was running at full capacity, official data show. They generated 23.7 gigawatts at approximately Rs 62 per unit during this period costing over Rs 1.4bn. The CEB admitted last week that the turbines are expensive to operate, “anything beyond Rs 50 per unit, just for fuel”.

This type of equipment is one of the priciest options available to the utility which publicly espouses a “least cost” principle. It should only be used for “peaking power demands” and not for baseload power, said Vidhura Ralapanawe, independent energy analyst.

A unit of electricity generated from hydro sources is, by comparison, around Rs 4 while diesel-powered plants yield a unit at between Rs 22 and 26. Coal costs around Rs 14 to generate while solar bids cite Rs 15-16 per unit.

There are six diesel- powered gas turbines installed at the CEB’s Kelanitissa premises from the 1980s and 90s. Two are out of service and another two under repair. The Sunday Times reported last week that the remaining pair were used throughout January because the CEB were unsure of weather patterns and wanted to preserve available water.

Generation figures show, however, that from early January to March 16, the turbines ran from morning till late night— over 15 hours per day, Dr Ralapanawe said. For most of January, one turbine was used ( generating approximately 18 megawatts). But from February to March, both were run to produce around 35 MW of electricity.

This is despite there being ample water in the reservoirs, accounting for 596 GWh or around 50 percent of total capacity by April 17. Rains boosted storage capacity that month. There was more water this year than in 2016 and 2017 or last year, Dr Ralapanawe observed.

One unit of the Lakvijaya coal power in Norochcholai was shut down in January 2020 for maintenance and did not come back online till February. But all three units were functioning from February 27 to April 16. There was then excess capacity from hydro and thermal. Both were cheaper to run than the turbines which were nevertheless put to use at the cost of around Rs 360mn for 5.8 Gwh.

“From the time all three units of Norochcholai were operational, there was also adequate hydro capacity and this money could have been saved fully,” Dr Ralapanawe said.

It is questionable, too, why the turbines were used to generate 564 MWh during off- peak which is between 10.30pm and 5.30am when demand is below 50 percent of daytime load. This cost the country Rs 35mn although this load, too, could have easily been taken by hydro.

“Even if this was taken through oil, half this cost could have been saved,” Dr Ralapanawe said.

Generation data also shows that on April 16, around 5pm, Unit 3 of Lakvijaya coal power plant failed due to a hydrogen leak. It is usually Unit 1 that has repeatedly broken down since its commissioning.

“This (about Unit 3) was a problem previously known to the plant and why it was not fixed during shutdowns is not explained,” Dr Ralapanawe said. It was last closed for maintenance in October last year.

Unit 3 resumed service on May 4, after 18 days of repair.

Curiously, during this period, the shortfall of six GWh of generation was met, not by hydro, but by private diesel plants hired from independent power producers.

“From April 1 to 11, the average generation by private power plants was 5,200 GWh per day,” Dr Ralapanawe observed. “Between April 17 and May 4, this went up to 9,400 GWh per day.”

During the same period, average generation from hydro was 5,000 GWh per day. Between April 17 and 30, it went up by a mere 2,200 GWh.

“With the monsoon expected without a failure, there was ample opportunity for the CEB to ramp up hydro production instead of going for costly private thermal power plants,” he said. “These have added to CEB losses when the Government is facing a fiscal challenge. The utility burned imported fossil fuels while pushing the country further into a foreign exchange crisis.”