‘Before the next power shortage in the country’

By Ifham Nizam

Perturbed by reports that the government will terminate the ongoing 300MW Lakvijaya coal-fired power plant extension project, the Ceylon Electricity Board Engineers Union (CEBEU) has appealed to the President to allow the completion of this project of national importance.

“We are certain that your Excellency will provide the Ministry of Power and the CEB the necessary directions and assistance to complete the extension project within the shortest possible time”, the Union’s President Eng. Saumya Kumarawadu, says in a letter to the President.

The President earlier decided to implement the 300MW coal power extension project considering the fact that the country is facing an imminent power shortage as a result of not constructing a single large low-cost power plant since 2014, he said.

However, officials at the plant complex said they have not been officially informed so far to halt work on the plant.

The Sri Lankan government has already saved more than USD 2 billion due to the three coal-fired power plants at the Lakvijaya Power Plant Complex in Norochcholai, officials said.

The extension project is now underway with the China Machinery Engineering Corporation (CMEC) investing USD 4 million, while the Ceylon Electricity Board (CEB) has injected USD 1 million, they said.

The proposed plant, the fourth to be built at Norochcholai will translate into an annual saving of more than Rs. 27 billion to the government, former CEB, Chairman Eng. Vijitha Herath said.

Last year, Cabinet endorsed the fourth unit should given to CMEC considering the substantial revenue already saved due to the contribution from coal-fired plants under operation.

Kumarawadu said the proposed 300MW extension project will generate nearly two billion units of electricity per year. The fuel cost per unit of the existing coal plant is Rs.10 less than the next lowest thermal option available, furnace oil power plants. Hence, the average annual saving to the country by this plant will be around Rs. 20 billion.

 The savings compared to costly emergency power will be in the range of Rs. 30 to 40 billion per year. The price of LNG is also rapidly increasing compared to coal and even LNG. The cost difference between coal and LNG will be around of Rs. 3 to 6 per unit and savings will be in the range of Rs. 6-12 billion or more annually. So, it is evident that this extension plant will immensely help to overcome the financial crisis both in CEB and CPC and will also provide immense relief to the Treasury as well, he pointed out.

 He further said the investment for the new extension unit was comparatively low. All other power projects in the pipeline, including large-scale renewables, demand enormous investments for infrastructure development with long time span for implementation.

“This should be seriously considered by the government in a situation where the country is facing severe financial hardships due to Covid-19 pandemic,” the CEBEU President stressed.

 All preliminary work related to the project such as comprehensive feasibility studies, finalizing technical requirements, comprehensive Environmental Impact Assessment (EIA) studies, commercial agreements are completed now, he said.

It is just a matter of beginning construction work at site and completing the project before the next power shortage in the country, he added.

The CEBEU also said that there is a massive propaganda campaign against coal and one of the false ideologies promoted by these forces is that many countries are moving away from coal. While agreeing that coal power development is on a declining phase in wealthy developed countries, developing countries have not stopped constructing new coal plants mainly to ease the financial burden on their national economies.

 Citing examples, he said there are new coal development plans earmarked in countries like India, Bangladesh and Vietnam in the range from 22,000MW to 66,000 MW the next 10-12 years. Germany, one of the leading wealthy countries in renewable energy development, commissioned the 1100MW Datteln 4 coal power plant in May 2020. Dubai, another country with a very strong economy is constructing the 2,400MW Hassyan coal plant. The initial 600MW unit of the plant is to be commissioned in 2023, Kumarawadu explained.