Features

Possible solutions to power crisis

By Migara Liyanage

It is unfortunate to note that, we have run into a crisis even after the Mahaweli Project, that was planned for completion in 30 years, was finished in ten years. The inconvenience resulting from the power cuts is enormous. Economic downfall from reduced production and closure of factories has affected the economy. Certain energy intensive industries have failed to compete in the international market as the cost of electricity has increased. Prof. Mohan Munasinghe who was the energy advisor to President J.R. Jayawardane, has estimated the direct loss to the economy is between Rs. 12 - 24 billion. The indirect loss due to the cancellation of power plants, bad planning and expensive stopgap measures have had an indirect impact on the economy. The night time power cuts have also had a tremendous impact on schoolchildren as they fall behind in their homework owing to these power cuts. Universities were closed and examinations were postponed due to the power cuts. The loss to the country from this crisis is such that it cannot be estimated in value terms.

This situation is not something that suddenly came about. The power cuts in 1996 and 2001 were predicted by various energy experts. Our decision makers did not do much to avoid such a crisis. The CEB plan in 1991 proposed the 300 MW Mawella Coal Power Plant to come into operation in 1999 and the 1992 plan proposed the 150 MW Upper Kotmale Hydro Power Plant to come into operation by the year 2000. It is the cancellation of these power plants that has lead to the crisis today. In this article, I am attempting to show what would happen to the country in the future with the failure in the implementation of a coal power plant in 2004. So far the cancellation of these power plants have cost the country Rs. 11.5 billion.

Short of capacity

The accompanying graph shows what happens in the future if the country is face with a situation with almost the same rainfall, like today, and the proposed implementation schedule of the CEB.

This shows that this year the system is short of almost 250 MW of capacity. Till the combined cycle power plants come into operation in the middle of next year, the system will run short of 150 MW, where there is a possibility of power cuts till mid 2002 starting from mid-December 2001. With better rainfall and other methods there will be no possibility of a power cut from June of 2002 till June of 2004. But the power cuts would resume in 2004 and will continue until a large-scale power plant is implemented.

Authorities handling power and energy should consider the following measures as possible solutions: 

1. Implement inexpensive stopgap measures to avoid further power cuts in the future.

(I) Hire or install diesel generators to supply a capacity of 150 MW:

As a short-term solution, the CEB will have to hire or install diesel generators with a capacity of 150 MW as soon as possible. There is no doubt that this is an expensive solution. But it would be better for all of us to have power, rather than not having power. Prof. Mohan Munasinghe points out that each unit not supplied, costs more than Rs. 40 to an industry. It should be noted that the cost of not having electricity is several times that of having electricity.

(II) Install a 300 MW Combined Cycle Diesel Power Plant (CCPP) to come into operation by 2004:

By 2006 the shortage in capacity would be 300 MW. This should be bridged by a cheaper solution that would be beneficial in the long run. It takes only two years for a CCPP to complete. Therefore a 300 MW Combined Cycle Diesel Power Plant is the best solution to the incoming crisis.

These power plants should come up in addition to the proposed implementation schedule of the CEB.

2. Implement a 300 MW Coal Power Plant to be installed at least by 2006.

Even though we have been debating whether coal is the best option for the last 16 years, it is what is widely used in the world for electricity generation. Even if we make our decision today it will take at least four years for a coal power plant to come into operation. Therefore this decision should not be delayed.

It would be a good idea for the government to accelerate the coal power project. The first 300 MW phase of the Pha Lai Coal Power Station in Vietnam was commissioned within three years. They hope to complete the project next year to add another 300 MW. This project will only take 5 years to complete.

This is also not the first time that there have been objections over coal. The situation that arose in the Philippines is the best example. The Philippines government launched mass awareness campaigns in order to educate the masses about coal. Coal is now one of the leading sources of electricity generation there. The Sri Lankan government should follow this example and conduct awareness campaigns to educate the public on this matter. If the public is enlightened on the issue I am sure there would be little or no opposition to coal power plants.

3. Reduce the distribution and transmission losses.

Official local data shows that the total system loss is almost 21.35% in 2000. In developed countries the transmission loss is less than 10 % (e.g. Japan 7 % and USA 8 %). In our country this could be brought down to 15 % with simple loss reduction programmes. From this it would be possible for us to save a lot of energy and money reducing the time of a future power cut.

The old distribution network, erroneous meterings and unmetered supplies are the main reasons for this. Therefore the replacement of the old distribution network with new equipment, which is in progress, has to be accelerated. The CEB should also install meters wherever necessary in order to reduce the lost income.

4. Adopt a Long Term Electricity Generation Policy for the country as a permanent solution for the future.

This long-term policy should address the future energy generation needs of the country, at least for the next 30 years. Industrialisation, electrification of rural areas and electrification of the railways are a few goals that we will have to achieve in the next 20 years. We are in an IT age. We have to give access to computers to all. The above-mentioned are indispensable for any country to be developed. An uninterrupted electricity supply will be the base for all this.

Today the base load of the country is supplied by expensive and unreliable sources. A cheap, reliable supply of electricity is indispensable for industrialisation and electrification of the country. Coal is the only fuel that can give a cheap reliable supply. In fact in the 1980s President Robert Mugabe of Zimbabwe started coal power plants in order to boost his industrialisation plans because it could give a cheap and reliable supply.

The local electricity demand is around 7,000 GWh this year. It would be at least 25,000 GWh by 2020. Therefore the country needs at least three 900 MW plants by that time. By 2030 the country will need five of them. Therefore whether it is Trincomalee, Mawella, the west coast or Hambantota, some day we will have to build coal power plants in all these sites.

The time has come for us to implement a National Policy for Energy for our country that will be independent and continued whichever party is in power. During the past five years the capacity was not increased to meet the increasing demand. All power plants that were launched were expensive. The CEB plan was not implemented. A clear stand on this coal power issue was not taken. This is what has lead to today's crisis.

Let us hope the new government will deliver the goods with regard to a good power policy.

Shell resorts to vigilante tactics

By Akhry Ameer

Though the LPG volcanic mountain has been spouting steam and smoke over several issues, the last big eruption occurred in October when LAUGFS entered the market. Shell complained, at that time, that the subsidized pricing arrangement by the CPC to supply all its LPG produce to the new entrant was not in the longer-term interest of local consumers. However, LAUGFS maintained that they clinched the three-year supply deal after giving certain assurances to the government, one of which was being able to sell LPG in the domestic cylinder market at Rs.100 less than the competition. 

Shell's latest allegation is based on reports by its senior managers that they had seen LAUGFS bowsers discharging LPG into two of its autogas filling stations at Borella and Mount Lavinia in the early hours of December 14. Thereafter they had received reports of similar sightings at other LAUGFS autogas stations.

According to Radesh Daluwatte, Sales Director at Shell, such a situation should not occur as Shell has been supplying LPG to LAUGFS for its autogas filling stations over the last five years. The normal practice has been that Shell bowsers directly supply these filling stations whenever an order is placed. He further said that two of the LAUGFS autogas stations had decreased their order by more than 10,000 kg in November compared to October stocks. He said they had every reason to believe that what was being unloaded at LAUGFS stations was LPG from the CPC refinery.

Shell is also of the view that through this process LAUGFS stands to make huge profits at the expense of CPC, the taxpayer and domestic consumers who were promised reduced prices. In addition Shell says that other autogas retailers are unable to compete in the same market and that the government is denied its due GST component if this CPC output is used for the autogas market. 

Responding to the allegations, W.K.H. Wegapitiya, Chairman of LAUGFS asked, "Why are they worried? Are they the regulatory body?" 

Wegapitiya said this was all part of Shell's effort to sabotage his company. "They have been photographing all my installations. They have been following my bowsers and trucks taking photographs. An armed gang blocked one of our trucks last Monday. The civil security committee of the Mabima and Sapugaskanda area has received reports of unidentified civilians in military uniforms roaming around our Mabima installation and has asked us to be vigilant. They have no right to take photographs," he added. The committee is a group of civilians and military personnel helping police in this high-security area where the CPC's main refinery is located.

Shell has acknowledged that it was their men who took the photographs and video footage after LAUGFS had complained to the Borella police station. Shell also confirmed to The Sunday Times Business the same position and said they had made a statement to the Borella police in this connection. 

The LAUGFS chairman is not denying Shell's latest allegations. "Our bowsers may be loading, unloading or even parked at any of our own installations. It is none of their business. We can even be transferring from one filling station to another. Shell charges heavy transport costs. If we use our own bowser to transport LPG from Borella to Galle we save Rs. 120,000 per trip. They cannot take the law into their own hands. If the sales are down, they could have asked us. Right now because they have been roaming around our installations, Shell would be held responsible if anything (like sabotage) happens to any installation."

He said that his company had recently made a request to President Chandrika Kumaratunga to allow the use of their autogas filling stations for regional filling of LPG household gas for an interim period until they stabilize their operation cycle.

In response to a further comment by Daluwatte, the LAUGFS chairman denied that some of CPC's output had been flared (burnt) due to the shortage of empty cylinders and accused Shell of deliberately misleading the public. 

Shell's Sales Director said that there have also been instances where dealers have been transferring LAUGFS gas into Shell cylinders to counter the slow movement of LAUGFS gas sales and also to take profits. Responding to this charge, Wegapitiya said he was unaware of such practices with his cylinders but noted he would take action against any dealer found resorting to this method. 

Wegapitiya had his own allegations to make against Shell. "Shell's equipment is unsafe. We have been minding our own business, but we are now compelled to say this". According to Wegapitiya since the average age of Shell's cylinders is about 15 years, they are corroded, and also there is no proper recall and monitoring mechanism of old cylinders. He was of the view that the regulator and hose provided by Shell is also outdated and doesn't comply with international standards. However Daluwatte denied the charges saying their products were of global standards set by Shell, which are relatively higher than the required international standard.

"This is not the way multinational companies act. If we are at fault they should report it to the authorities. They failed once. Now they are trying to sabotage us again while we have been making proposals to the new Power and Energy Minister Karu Jayasuriya to provide further relief measures to consumers," countered the LAUGFS chairman.

While the top of the LPG mountain continues to spout lava, the melted lava seems to be hardening at the base with various marketing strategies from both fronts dominating the markets. Last week Shell reduced the price of its domestic cylinder to Rs. 1,850 as a special seasonal offer. LAUGFS on the other hand introduced its industrial cylinder to the market free with the LPG content being sold at Rs. 320 less than its counterpart Shell.