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Whither Sri Lanka’s energy sector, lifeblood of national economy ?

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By Eng Parakrama Jayasinghe
parajayasinghe@gmail.com

It was in February this year, that I pointed out that the Sri Lankan energy sector is a headless chicken.

https://www.ft.lk/columns/Sri-Lankan-electricity-sector-The-headless-chicken/4-730564

Looking at the mile long queues for all forms of energy, petrol, diesel, kerosine and LPG, where the citizens are wasting away their lives and in some cases losing their lives, it is quite clear that the situation has even worsened since then. When the above article was written there were no such queues except the LPG shortage. But the writing was on the wall , leading Sri Lanka to the present abyss hitherto never experienced by us.

The tragedy being that, even now there is absolutely no solution being proposed, by the government, except going all over the world begging for dollars and oil. Under these circumstances , it is very important to look back at the past actions, not over the years and decades , when the seed for this tragedy were laid, but the totally insane decisions in the past few months , which totally ruined the Sri Lankan economy as well as the social fabric covering the entire spectrum of the citizenry. The current actions of the government which is limited to seek means of surviving on a day to day basis, does not inspire any confidence that, Sri Lanka can emerge from this ruinous mess if ever.

What will happen tomorrow?

I raised this question in February this year.

Quote “In this back ground the people are aghast to witness the drama being enacted, with the ministers blaming each other and the Central Bank insisting there is no problem in releasing the Dollars necessary to import the oil. The fact remains that there already has been power cuts. It is a question of when rather than if, there would be more power cuts. Much hope is pinned on the recommencement of generation with the third unit at Norochcholai. There is no guarantee for how long all three units would be in operation considering the past history of this power plant, bringing us back to square one”. unquote

The reality as it turned out is much worse. Not only two of the coal power plants will be out of service one after the other for some three months, we are living on tenterhooks as to how much reliance we can place on both operating units will deliver us the electricity without breaking down , even at the present enormous cost. The arrival of the monsoons helped to alleviate the problem to some extent until the first of the units was shut down for maintenance. Till then there were some happy days in May when Sri Lanka was able to manage without any private oil based power plants and minimal usage of those owned by the CEB

Unfortunately those days were minimal and we have reverted to the disastrous oil based generation as illustrated in the two charts below , down loaded from the CEB web portal. (See Figures 1 and 2)

This brings me to the point at issue. What did cause the present impossible situation with respect to transport fuels , leaving aside for a minute the issue of LPG and Kerosene?

The primary problem is of course the blind dependence on imported fossil fuels for our energy needs. While there were no viable alternatives for transport fuels in the past, this is certainly not so in case of the power generation. However, this has been the subject of many of previous articles both mine and many other right thinking people of all levels. What is needed now is to examine the immediate ill-conceived past decisions and actions and hopefully try and avoid the continuation of such, if we are to retrieve a semblance of order in the transport energy sector , which is crippling the entire country.

Having endured repeated economic disasters caused by the CEB year after year, by manipulating the overdependence on the oil based power, in the dry months of January to April, they have brought the country to its knees literally this year. This is by siphoning off what little available oil supplies as well as the dollars spent on importing same during these months as shown below. (See Table)

*Estimated on the basis of 0.28 liters/kWh

** 6000 litre Loads

Evaluated based on CEB Statistics

The number of bowser loads of oil issued by the CPC is mentioned as about 800 per day, in various press conferences. It is seen that on some months the CEB has mopped up over 75% of this scarce resource , just to pretend that they are able to minimise the power cuts of their own making. Even though the amount of oil includes partly, furnace oil and heavy oil, they too consume dollars which could have been used for import of diesel essential particularly for transport.

While the ministers and the government in general are also to be blamed for this situation , leaving the decision making to the CEB, which has absolutely no compunction in driving the country to bankruptcy, They have already done this by running up a loss of over Rupees One Trillion over the last decade and are well on the way to adding a further trillion this year and next alone. The net effect has been the disaster we are experiencing now. Under these circumstances it is inescapable that the CEB would need immediate restructuring with strict conditions of accountability and adequate competition which has proved to be of immeasurable value in the telecom sector. The worst aspect of the current total mindless prodigal waste is that this is mostly impacting the balance of payments due to the immense amount spent on import of oil and coal for power generation. If not for this lopsided decision of trying to keep the lights burning, without any consideration of the great impact it would make on the transport sector, the present crisis would have been much milder.

This once more highlights the point I made in my last article , that Sri Lanka’s Energy sector is truly a “Headless Chicken” without any vision or direction and most damagingly no accountability. No one seems to be able to critically evaluate the sectors which must receive priority for the allocation of the dwindling foreign exchange. It takes only the minimum amount of intelligence to decide that the priority should be for those sectors which have some chance of earning back the foreign exchange spent. Obviously, even that level of intelligence cannot be expected from our leaders as seen in the handling of all other sectors as well. Under these conditions it would be too much to expect them to have even looked at the electricity consumption by the different sectors as shown below.

Fig 3. Share of Electricity Consumption Amongst Sectors ( CEB Statistics)

Only a part of the consumption by the Industrial sector and may be a fraction of the bulk sales could be expected to meet these criteria.

The Domestic + General sectors consuming over 60% of electrcity are not contirbuting directly to the economy or export earnings

But the government’s interest may have been to provide lights at any cost to the other sectors for political expediency, ignoring the havoc it would create, if they had even thought about it.

It is in this light it was a breath of fresh air to note that Sri Lanka managed even for a few days with very little oil based generation in May. However, that euphoria was short lived and as seen in the second chart , where the generation has reverted back to the unfathomably mindless behaviour with oil based generation contributing over 33 % of the total. The damage is worsened by the fact that the cost of generation using oil and coal has reached such levels , so that any right minded admiration would shut down such plants immediately and seek whatever sustainable means of bridging the gap.

Fortunately for Sri Lanka we have ample means of doing so, which does not result in continuous drain of Dollars and has the benefit of many other economic advantages. More details of these options have been submitted to the officials who hopefully would advise their political masters of the lack of any other alternative.

On the other hand depriving the transport sector of the only fuels they are 100% depended on, is totally inexcusable and has already caused irreversible damage. One would say that this lapse is the single most damaging cause for the total loss of confidence on the government by all segments of the people as evidenced by the recent survey by a research group.

The purpose of this article is to draw the attention of the new Minister of Power and Energy , who fortunately has the responsibility for power supply as well as supply of transport fuels, to critically examine the above situation and try and arrest and hopefully reverse the current disaster , as early as possible and salvage what little we can of the economy and the well being of the people.

As such the following realities which are obvious and we hope that the Minister will make the urgently choices based on them, however hard they are if we are to see a resolution of the transport fuel crisis.

The limited oil supplies should be directed to trasnport sector as prority , the lack of which has direct negative impast on production as well as transport of esential goods directly affecting social life and well being.

The use of 82% of oil by private vehicles is unsutainable

Busses and trains carrying 50% of the passengers using only 5% of oil must be kept supplied without shortage.

Clear priority needs to be given to industries and other sectors which earn foreign exchange

The CEB engineers have been so kind as to warn us that there will be more hours of power cuts if adequate diesel and furnace oil are provided so that they can add few billions more to the loss. We can only hope that they would condescend to earn their living at least now, by facilitating the fast track development of the renewable energy sources for power generation, instead of trotting out lame excuses.

May the Minister have the courage to declare that Sri Lanka would no longer operate any oil based power plants , except perhaps those which can operate on furnace oil and naphtha, produced by our own refinery , for which the supply of crude oil must be treated as a priority for many reasons.

Say no to LPG !

In the total energy scenario, or shall I say today’s ‘polim’ culture, the LPG queues take much more prominence than the relative percentage of energy mix . Naturally being so close to the day to day needs of cooking energy, the emotions are running high. Fortunately a ready alternative is available and has been addressed in a different article accessible on https://www.bioenergysrilanka.lk/an-opportunity-behind-the-lpg-crisis/ It only requires minimal intervention by the state by promoting the offered solutions as an alternative to staying in long queues without any guarantee of receipt of a cylinder of LPG.



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Features

‘Lord Edgware Dies’

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It has been some time since I read an Agatha Christie, the plot of which I cannot remember. So, I was delighted to find on the shelves of a friend Lord Edgware Dies, which I had a vague memory of, but no certainty about who had done it.

When I read it, I found that my memory of who was probably the killer was correct, but I could not be certain and the red herrings Christie threw in were so diverting that until almost the very end I wondered if I had been wrong.

The plot is very simple. Jane Wilkinson, who is married to Lord Edgware, tells him that she is desperate for a divorce since she is in love with a very proper Anglo-Catholic peer, Lord Melton, but Edgware refuses to divorce her. She asks Poirot to talk to him, which he does, and is surprised to find that Edgware has told Jane he is prepared to give her a divorce. This was, after he had categorically refused, through a letter, which Jane said she had not received.

That night Edgware is murdered, after Jane had been to see him, or so the butler said, and also Edgware’s secretary. But Jane had been that evening at a grand dinner many miles away, where a dozen fellow guests could swear to her presence.

There was a solution however to the mystery of two Jane Wilkinsons, namely a skilful impersonator called Carlotta Adams who, in the opening chapter had impersonated Jane Wilkinson, who had also been at the performance. But when Poirot goes to see her, he finds that she had been found dead on the morning after Edgware had been killed, of an overdose. And in her bag was a gold case, with a strange inscription, that contained the drug, along with a pair of pince-nez.

Her maid said she had written a letter to her sister in America and posted it the previous night. Poirot asks Inspector Japp to get the letter, and a transcript is received from America, and in it the name of Edgware’s nephew Ronald Marsh is mentioned; he had taken Carlotta to dinner after her performance, with which the book opens, and had then set her a challenge. Japp arrests Marsh, but Poirot is not happy and asks for the original of the letter, which the sister sends him. That shows that a page is missing, and the tear is obvious, though that raises the question as to why it had not simply been cut.

Matters are further complicated by the fact that Marsh had gone in a taxi to the Edgware house, along with Edgware’s daughter Geraldine, in the interval of an opera which had previously seemed to provide them with cast iron alibis. Geraldine had gone in to fetch her pearls so that Marsh could raise money he needed, and thus had an opportunity to kill Edgware, as did Marsh, for the driver said he had got out of the taxi while waiting and gone into the house.

Agatha Christie

Marsh explained why he had gone to the house on the night of the murder as having followed Bryan Martin, an American actor, who had been in love with Jane, whom he saw go into the house with a key. But there was no one visible when he entered, and Geraldine almost immediately came down and they left together. And Martin too has become an object of suspicion to Poirot, for he had been to see him before the murders were discovered with a story of being followed by a man with a gold tooth – a story Poirot immediately realized was false when he was asked how old the man was, and was told he was young, for young people did not have gold teeth.

A heap of French money Edgware had got for a trip to Paris was missing, but since Marsh had no need for it after his cousin’s offer of help, Poirot deduces that it must have been taken by the butler, who has disappeared. Christie has stressed that he is astonishingly handsome, unusual in a butler, and Poirot notes a resemblance to Martin, so he thinks the mysterious man going into the house must have been him.

Incidentally, later Poirot assumes that Edgware’s change of mind was because he was involved in some scandal, and I believe Christie intends us to see the cause of this in his handsome butler, though this is not specified.

Meanwhile, Poirot has asked Japp to find out the provenance of the case found in Carlotta’s handbag, and it turns out to have been made in Paris, specially commissioned, and collected by a woman with pince-nez.

But then another murder occurs—that of another guest at the grand dinner, which provided Jane with her alibi. The victim is an actor who had been bemused when Jane, at a lunch, thought the Judgment of Paris referred to the city. He told Hastings he wanted to see Poirot, but was killed before he could get to the appointment. Poirot had rushed there when told about his request, but it was too late.

Meanwhile, Poirot has tried out the pince-nez on Edgware’s secretary, but she could not see through these. It was only a chance remark heard outside the theatre that led him to try them out on Wilkinson’s maid Ellis, a spare pair that had been appropriated for the night of the murders.

Poirot then lays things out, having summoned Martin and told him that he probably suppressed Edgware’s letter, as he had been dropped by then and he did not want Jane to marry another. But after teasing Martin, Poirot says that Jane was in fact the murderer, and she got Carlotta to impersonate her at the dinner while she went to the house and killed her husband. After meeting Carlotta later and checking with her through a call that she had not been rumbled, Jane had gone ahead with the murder – she put veronal into her drink and the case with veronal into the handbag. She forgot to take out the pince-nez she had used earlier to imitate an American. Carlotta had registered as the American in a hotel and Jane had gone to see her, and there they exchanged identities. After seen the letter, she made use of it by tearing off the page that referred to her, and the S of She, so that the person who had challenged Carlotta to impersonate her seemed to be a man.

There is a coda in which Jane, condemned to death, writes to Hastings, still full of pride at her ingenuity hoping she will be remembered.

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Features

Desilt reservoirs, learn from our ancient irrigation systems

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Polgolla

by Prof. O. A. Ileperuma

Silting of reservoirs is a major problem today affecting our hydropower production and irrigation systems. The main Mahaweli reservoirs are silted to a considerable extent reducing the water holding capacity of them. Due to poor soil management practices, floodwaters deposit large amounts of silt in these reservoirs. When the Polgolla reservoir was fully drained about two years back, one could see mountains of silt in the lower reaches of the reservoir. A rough estimate is that 50% of the total capacity of these reservoirs has been lost to siltation. This is a serious issue which affects not only power and agriculture but also flood control.

Our ancient irrigation systems ensured that desilting of reservoirs took place under royal decree where all users of the reservoirs were ordered to carry out desilting of reservoirs during the dry season. The clay thus collected was used in making bricks for the construction of great stupas which dot the landscape of our ancient kingdoms. This ensured that the reservoirs had their full capacity filled with water for the next cultivating season. Our ancient kings were clever enough not to construct reservoirs by blocking main rivers such as the Mahaweli. A classic example is the Minipe left canal where they tapped only the surface water of Mahaweli. Even the bigger tanks such as Nuwara Wewa and Parakrama Samudraya were fed with minor rivulets. There were also other ingenious features in the cascade irrigation systems built by the ancient kings, such as mud sluice canals and forest reservations between the reservoirs in the cascade system. These reservations helped trap silt and remove excess nutrients, which could otherwise contribute to increasing salinity as water flowed from one reservoir to another.

Victoria

Moragahakanda

A classic engineering marvel is the former Yoda Ela, which carries water from Kalawewa to Nuwara Wewa and Tissa Wewa. It is 87 km long although the straight distance between these points is only about 40 km. The gradient of this canal is about 10 cm per km or 6 inches per mile. Yodha Ela functions as a moving reservoir and feeds about 4,600 hectares of paddy lands. It is a winding canal with about 120 smaller reservoirs on its way. It was constructed during the reign of King Dhatusena around 459 AD and later expanded by King Parakramabahu by connecting more reservoirs to the network. Unfortunately, during the Mahaweli project our modern-day engineers constructed a concrete canal replacing the winding path of this Yoda Ela also called Jaya Ganga. This effectively removed the ability of the old Yoda Ela to remove silt and nutrients. The bank of this Ela has wet zone trees such as jak and areca nut growing well. They take up the nutrients from the flowing stream making the water suitable for irrigation later.

Ancient Mesopotamian civilisations depended on dams constructed along the two main rivers, Euphrates and Tigris. After continuous irrigation of their fields over several thousand years, salinity of the irrigated lands increased making them unsuitable for agriculture. People died due to famine and this clearly illustrates the danger of blocking main rivers for agriculture. There is scientific evidence that the salinity of paddy soils in the Mahaweli C area is increasing.

We saw the devastation caused by Cyclone Ditwah. The sluice gates of the Kotmale Reservoir were opened, and Kandy and Peradeniya were flooded. If the reservoir had had greater storage capacity, couldn’t the opening of the gates have been delayed? This may not be an argument that modern-day engineers would readily accept, and I am not an irrigation expert. These ideas may well be naïve. But most of us tend to think of reservoirs mainly in terms of hydropower generation and irrigation, while their role in flood control receives much less attention. The question therefore deserves serious consideration. Could restoring lost reservoir capacity through desilting help improve our ability to manage extreme rainfall and reduce flood risks?

Desilting our reservoirs should be considered a national priority.

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Features

Losing out to Ethiopia

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From Trailblazer to Tailender

Export diversification – Missing the wood for the trees – Part III

by Gomi Senadhira

In Sri Lanka, the word “Ethiopia” is often used as disparaging slang to describe individuals or areas experiencing extreme poverty, starvation, or severe economic hardship. This linguistic habit originated in the 1980s with the Western media coverage of the devastating Ethiopian famine of 1983-85. That media coverage shocked the world but also left an outdated and offensive global stereotype that the country is permanently starving. Much has changed since then. By now, with an annual growth rate of around 9%, it is the fastest-growing economy in sub-Saharan Africa. Ethiopia has also emerged as a highly competitive exporter and is challenging not only its competitors in the region but also countries like Sri Lanka. This article is on how Sri Lanka has lost ground to Ethiopia (and a few other countries) in the GCC markets for agricultural and floricultural products.

Sri Lanka – A Pioneer in the Agriculture and Floricultural Market in the GCC

As discussed in Part II of this article, by the mid-1980s Sri Lanka had established a strong foothold in the GCC’s fruit, vegetable, and floricultural market. Geographical proximity and well-established shipping and air links gave Sri Lanka a strong comparative advantage over Southeast Asian and African nations. Thailand, Vietnam, and Kenya were not even in the market. At that time, Ethiopia was experiencing (as BBC news reports described) “a biblical famine”.

The market was not very large, but it was lucrative and growing. Trade Minister Lalith Athulathmudali as well as the Chairman of the Export Development Board, Victor Santiapillai, who visited Kuwait (and the GCC countries), recognised the market potential for these products and encouraged us to continue with our work. The minister was particularly keen to further develop links between the market for these products, exporters, and his Export Production Villages (EPVs). So, it was becoming a successful case not only for export diversification but also for transferring gains from exports directly to rural households.

From Trailblazer to Tailender

As a result, even by the beginning of this century Sri Lanka had a larger market share than most of its competitors from Asia or Africa. But since then, our competitiveness has weakened significantly. The tables below provide a comparative snapshot of Sri Lanka’s performance vis-à-vis Thailand, Vietnam, Kenya and Ethiopia in the GCC market for vegetables, fruits and floricultural products. As illustrated therein, in 2001 Sri Lanka was ahead of Thailand, Kenya and Ethiopia in this small but rapidly growing market. Since then, we have fallen behind Thailand, Kenya and many other countries in that lucrative market. If this trend continues, Sri Lanka will fall behind Ethiopia within the next few years. (See Table 1)

In the GCC market for vegetables (covered in HS chapter 07), Sri Lanka was ahead of most other competitors in 2001. As illustrated in Table 1 , Sri Lanka had failed to develop this market, while Thailand, Kenya, and even Ethiopia had very efficiently increased their market shares. The GCC is a market to which Sri Lanka can supply some vegetables, like cabbages, by sea. It appears Sri Lanka had also failed to exploit this mode of supply.

We can see a similar trend in the market for fruits. Vietnam, Kenya, and Thailand have emerged as major players, while exports from Sri Lanka have staggered on slowly. In this segment, Vietnam has emerged as a leading player during the last twenty years and the GCC imports from Viet Nam have shot up from US$44 thousand in 2001 to US$346 million by 2024. In part one of these articles, I discussed the remarkable increase of jackfruit exports from Vietnam “…just $3 million in 2015 to an impressive $236.8 million in 2023” while most of our jackfruit production rots under the trees. This explains how countries develop their markets, geographically and product-wise. (See Table 2)

Sri Lanka’s performance has been weakest in the market for floricultural products (HS Chapter 06), which groups live trees, cut flowers, and ornamental foliage. When we first entered the market in the 1980s, the market was dominated by the Netherlands, and Kenya and Ethiopia were not even in the market. At that time, we identified the Gulf states as a market where Sri Lanka could have a dominant presence due to geographical proximity. Even in 2001, Sri Lanka was ahead of Kenya, Ethiopia, and Thailand. But by now, Kenya has emerged as the dominant supplier. Ethiopia is also expanding its market share and is the third-largest exporter. (See Table 3)

Missing the Wood for the Trees

In the mid-1980s, Sri Lanka first established its foothold in the GCC market. Since then, Thailand, Vietnam, Kenya, and even Ethiopia have moved well ahead of us and have become leading players. Why did we lag behind in our export diversification efforts in general and, more particularly, in the GCC market?

The reasons are very clear. After the initial attempts in the 1980s and early 1990s, Sri Lanka has not been proactively involved in identifying, developing, and promoting new products and markets, or protecting and further developing new markets already established. The focus has simply been on traditional exports: tea, coconut, cinnamon, and garments, while other products were almost ignored. In essence, we have been and continue to focus intensely on a narrow group of products and markets, and we have lost sight of the bigger picture.

(The writer can be reached at senadhiragomi@gmail.com)

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