Delay causes huge losses to CEB

Development of renewable energy project:



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By Dr Janaka Ratnasiri


A news item in The Island of 24.07.2020, under the caption "CEB finally begins to tap solar power in a big way", quoted the Chairman of Ceylon Electricity Board (CEB) as having said that CEB successfully completed tender bids of 150 MW solar energy generation comprising plants between 1MW and 10 MW solar photo-voltaic (PV) plants. The report further said that more than 200 investors were willing to invest nearly USD 150 million in establishing these solar PV plants, generating electricity at a cost of Rs. 10 per kWh on an average, which is much less than CEB’s average generation cost of Rs. 23 per kWh. Chairman has praised the President for the promotion of renewable energy sources.


SOORYA BALA SANGRAMAYA PROGRAMME


The Chairman was trying to get some political advantage by praising the President for promoting the project, but the groundwork for the project was actually initiated during the previous regime under the Soorya Bala Sangramaya Programme, which was granted Cabinet approval on 17.10.2017. Under this programme (2019-2025) implemented by the Sri Lanka Sustainable Energy Authority (SLSEA) in collaboration with the CEB, it has been proposed to establish 60 solar power plants of 01 MW under phase I and another 90 solar power plant projects under phase II of the programme.


The SLSEA, however, took nearly two years to come out with a firm development plan for building these solar panel systems. This plan released in July 2019 included building an aggregate of 124 MW of 1 MW plants and several large-scale solar power plants on land (1,034 MW) and on water bodies as floating units (300 MW), as well as roof-top installations (330 MW) all adding to 1564 MW. At present, the country has about 14,700 roof-top installations amounting to 106 MW of peak power. It has to be noted that PV capacity is not comparable directly with thermal power capacity as the former is available only at noon on a clear day while there is no such restriction on thermal power capacity.


PRIVATE SECTOR INITIATIVE ON SOLAR POWER SYSTEMS


Even before the SLSEA Plan was developed, the private sector had taken the initiative to build utility scale solar panel systems. During 2016 and 2017, five plants, each with peak capacity 10 MW and three smaller plants were established with an aggregate capacity of 51.3 MW (CEB Sales and Generation Data 2018). Their plant factors are about 15%, according to PUCSL Performance Report. Among these are:


Three 10 MW solar plants built at Baruthankanda in Hambantota District, by three investors, Saga, Iris, and Anorchi Lanka.


A 10 MW solar project built on BOO basis at Valachchenai.


A 10 MW solar plant provided with a solar tracking system built at Welikande in the Polonnaruwa District, by Solar One Ceylon.


These projects were not selected after competitive bidding and energy purchased from them is paid at the rate of LKR 23 per kWh, as agreed at the project commencement (CEB S & G Data Book, 2018).


BUILDING LARGE SCALE SOLAR POWER SYSTEMS


With regard to large scale solar projects, the Cabinet has granted specific approvals for several such projects even before the SLSEA Plan was released, but none seem to have taken off the ground. Among these are the following.


Solar Power Park of 100MW in the Siyambalaanduwa for which Cabinet approval was granted on 16.12.2016.


Floating Solar Power Energy Plants on Mahaweli reservoirs beginning with a 100 MW plant at Madura Oya Reservoir for which Cabinet approval was granted on 28.02.2017.


240 MW Wind Power and 800 MW Solar Power Hybrid Energy Park at Pooneryn for which Cabinet approval was granted on 23.05.2017.


Even though the Cabinet has granted approval for these projects as far back as 2016 and 2017, neither the CEB nor the SLSEA does not appear to have taken any interest to pursue them to date. According to the said The Island news item, the price quoted by investors for generating electricity from solar panels of capacity 1-10 MW is around LKR 10 per kWh. If bids were called for these larger systems, the unit price would have been even less.


Even if the floating system is disregarded, the balance two systems with peak capacity 900 MW would have generated about 1,200 GWh annually, assuming a plant factor (PF) of 15% as observed in existing utility scale solar projects. With the saving of LKR 13 per kWh using solar panels, CEB could have saved about LKR 16 billion annually had it implemented these two projects.


BUILDING LARGE SCALE ROOF-TOP SYSTEMS


The Cabinet on 02.05.2017 has approved the allocation of LKR 300 million to install roof-top solar panels in government establishments, which was followed up by another decision taken on 05.12.2017 in which approval was granted to award contracts for their establishment in 63 Government hospitals, 13 Government schools and 01 Divisional Secretariat Division. However, nothing was heard as to whether these contracts as approved by the Cabinet were implemented or not.


Having recognized the advantage of setting up large scale roof-top solar systems, government could have drawn up a scheme to encourage the private sector, particularly the industries having large buildings to set up roof-top solar panels without any burden on the government. As an encouragement, they may be granted loan facilities on concessionary terms as well as tax concessions and removing any impediments encountered in connecting them to the national grid. It would have been a win-win situation for both parties – industry and CEB. Perhaps the new Chairman could pursue both these proposals and save much needed money to CEB.


 


CURRENT WIND ENERGY SYSTEMS


The first utility scale wind energy system comprising six of 0.5 MW turbines was installed in 1999 by CEB in Hambantota as a demonstration plant. With the land around Hambantota being handed over to the Chinese recently, this plant was dismantled in October 2018. With the high potential to generate electricity from the wind, the private sector took the initiative to build several wind energy systems mostly in the North-Western and Northern coastal areas and in the hill country, identified as areas having good wind regimes in a study carried out by USA-based National Renewable Energy Laboratory (NREL) in 2003. This study found the total wind energy potential in Sri Lanka to be a minimum of 24,000 MW.


Currently, 12 wind power plants each with capacity of 10 MW and three more plants of smaller capacities with aggregate capacity 128 MW built during 2010-2015 are in operation. Their PF values vary between 13% and 45%, with 8 plants having PF above 30% and the rest below 30%, according to PUCSL Performance Report 2016. The CEB is paying for the energy purchased from these wind plants at the rate of about LKR 20 per kWh (CEB S&G Data Book 2018), though the actual cost could have been much less.


PLANNED WIND ENERGY SYSTEMS


The SLSEA Development Plan has recommended building larger wind energy systems with aggregate capacity of 800 MW in Mannar, Jaffna, Moneragala and Puttalam Districts, by 2025. Out of these, work has commenced only on the Mannar Wind Farm having capacity of 100 MW, to be implemented by CEB who has secured funding from ADB. The total investment for the wind farm which will generate 380 GWh annually, is approximately USD 141 million. It is estimated that electricity from this project could be generated at less than 5.0 US Cents or LKR 10 per kWh (https://ceb.lk/project-detail/17/en).


Several measures had to be introduced to minimize its impact on the environment including migratory birds’ flights. A special radar system has been installed to monitor incoming birds and if any bird movements are detected the turbines will shut down automatically, as revealed in a TV discussion recently.


If the SLSEA Plan recommendation of building additional 800 MW of wind energy systems by 2025 is to be achieved, it is necessary to initiate work on building the rest of the plants without delay. This may be best done through the private sector to avoid delays in procurement process which are inherent in public sector projects. Investors should be selected after inviting competitive bids. Further, the present limitation of 10 MW as the maximum capacity of RE projects that could be undertaken by the private sector should be removed.


Once the planned 800 MW capacity of wind energy is added, it will generate about 2,100 GWh of energy annually, assuming a 30% PF based on the performance of existing wind systems. With the possibility of saving LKR 13 per kWh by shifting to wind power, the total saving with the installation of the full capacity of 800 MW will be around LKR 27 billion annually.


(To be continued)


 
 
 
 
 
 
 
 
 
 
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