Delay causes massive losses to CEB – II
Development of renewable energy projects
By Dr Janaka Ratnasiri
(First part of this article appeared yesterday)
Sri Lanka being blessed with a large number of streams cascading in the hill country, there is high potential to harness this source of energy. In fact, the first mini-hydro plant was built by British planters in tea estates even before the large systems were built. Currently, there are nearly 190 mini-hydro plants with capacity below 10 MW installed in all districts in the hill country with an aggregate capacity of 394 MW as at end of 2018. Their PFs vary between 25% and 55% with only about 10% having PF above 40%. The average price paid for energy from these mini-hydro plants is LKR 14.45 a kWh (CEB S&G Data Book 2018).
The SLSEA Plan has recommended installing additional min-hydro systems with capacity 110 MW by 2025. However, building these plants are not encouraged because of the many adverse impacts they cause to the environment including depriving water to people in downstream, forming puddles which could cause breeding of mosquitoes, affecting fish habitats and general ecology and aesthetics.
DECLINE IN BUILDING
RENEWABLE ENERGY SYSTEMS
It is observed that there has been a decline in the addition of renewable energy (RE) capacity during the past few years. It appears that the CEB has imposed an embargo on their development apparently citing a legal issue. When this matter was brought up at a TV panel discussion some time back, a senior official sitting in the panel representing CEB responded by saying that the applications for building new RE projects were put on hold on Attorney General’s (AG) advice.
The addition of generation capacity into the national grid is governed by the provisions in Sri Lanka Electricity (Amendment) Act, No. 31 Of 2013. Such an Act has been brought in to facilitate the introduction of additional capacity rather than to prevent such addition. If the AG’s ruling for disallowing building of new RE systems is due to any inconsistencies arising out of poor language in the Act or due to difficulty in interpreting its clauses, the Ministry should have taken the initiative to bring in suitable amendments to the Act in consultation with the AG to remove such inconsistencies and remove any conflicting clauses, so that whatever legal issues that prevent addition of new RE capacity could be removed.
INDIA’S OFFER TO BUILD A SOLAR PARK IN SRI LANKA
The Sunday Island of 26.07.2020 carried a news item describing a programme to promote solar energy utilization globally launched by India in collaboration with the Government of France, as a side event at the Climate Change Conference held in Paris in 2015. This programme called the International Solar Alliance (ISA), was established by the Prime Minister of India and the President of France on November 30, 2015, with the objective of scaling up solar energy, reducing the cost of solar power generation through aggregation of demand for solar finance, technologies, innovation, research and development, and capacity building. The ISA aims to pave the way for future solar generation, storage and technologies for member countries’ needs by mobilizing over USD 1000 billion by 2030, according to the India’s Ministry of New and Renewable Energy (MNRE) website (https://mnre.gov.in/isa/).
The above news report further states that India’s state-run National Thermal Power Corporation (NTPC) Ltd plans to set up a solar energy park in Sri Lanka under the aegis of ISA. It is not known whether India has made a formal communication on this to the Government of Sri Lanka and how the local energy authorities will respond to such an offer. Sri Lanka’s own plans to build solar systems will not exceed 1 GW capacity even by 2025, according to SLSEA Plan. This is far below the installations in India which has reached 34 GW in 2020. Being a member of ISA, Sri Lanka should welcome India’s offer to build a solar park in Sri Lanka under ISA. Under the terms of ISA, India only facilitates sourcing of funding and services and the host country has the ownership for the project, who is required to do the preliminary ground work to seek funding. It is hoped that the local energy utilities will accept this offer.
PROBLEMS FACING IN EXPANDING RE SYSTEMS
When more and more RE systems are built, their integration into the national grid may pose some problems. One is the rapid variation of the output of solar and wind systems. With the development of software that could forecast these variations on-line, it is possible to increase the penetration of RE systems into the grid. If necessary, CEB may acquire this technology from any foreign country who has already implemented high penetration of RE into their system.
Another is the need for storage for saving the electricity generated during the daytime by solar systems for use at night time. Often, what is proposed is to introduce high capacity storage batteries for this purpose. However, with the availability of hydropower reservoirs, a better way to save energy generated by solar systems is to avoid using hydro power during the daytime by an amount equivalent to what is generated by solar system. This saved hydro power is then available for using during night time (see article by Chandre Dharmawardana (CD) in Island of 15.07.2020).
A third problem often cited by CEB is the lack of capacity of the transmission system to accommodate energy generated by RE systems as planned. According to CEB, installing more than 20 MW of wind capacity in any given region may adversely impact local grid stability and power quality (NREL Study, 2003). This problem could be solved by improving the substations in outstations and increasing the capacity of transmission lines connected to them.
A fourth problem, particularly applicable for large scale solar PV systems is the difficulty in identifying suitable land in areas of high solar insolation. Unlike in India, Sri Lanka has limited land available for building solar parks which require nearly 1 ha for every 1 MW of installed capacity. One way to overcome this problem is to utilize the large number of reservoirs available in the country to build solar systems (See CD’s article). As mentioned before, government has already decided to build such a plant with capacity of 100 MW at Madura Oya reservoir.
ACHIEVING 100% DEPENDENCE ON RE SOURCES
If the above impediments which prevent incorporating more RE systems are removed, it will be possible to do away with planned fossil fuel power plants altogether, particularly the coal power plants which cause heavy pollution and achieve 100% penetration of RE systems as found feasible in a report released by ADB/UNDP in 2017. The CEB will then have to discard its current Long-Term Generation Expansion Plan which gives priority for coal power plants and prepare a fresh plan giving priority for RE sources.
Though the cost of coal consumed in a coal power plant may appear cheap and hence given priority in the CEB Plan, when the heavy expenditure on operation and maintenance as well as external costs including cost of damage to the environment and health of people are added, coal power is no longer cheap. A report released by the Public Utilities Commission of Sri Lanka (PUCSL) in 2017 revealed that “total cost at Puttalam plant is LKR/kWh 18.60, excluding environmental costs and cost of long Transmission lines”. (https://web.pucsl.gov.lk/english/wp-content/uploads/2017/11/brief-anlysis-cost-of-generation-2017.pdf).
Hence, it is desirable if the present and planned coal power plants are replaced with RE plants. If the entire generation from fossil fuels including coal amounting to about 8,400 GWh currently is replaced with RE projects which will cost only LKR 10 per kWh with no cost of externalities, it could save the CEB about LKR 110 billion annually. Hence, sooner it is done, the better it is for the economy of the country.
BENEFITS OF SHIFTING TO
In addition to financial benefits accrued by shifting to RE systems by avoiding fossil fuel combustion, the country stands to gain several other benefits. One is the avoiding of environmental pollution caused by emission of gaseous pollutants including oxides of Sulphur, oxides of nitrogen, particulates which are health hazards to people. In addition, damage caused to agricultural crops, fisheries habitats and to health of the people by ash accumulated after coal combustion could be avoided.
The other is the avoiding of emission of carbon dioxide into the atmosphere which contributes to global warming and in turn causes climate change. Being a signatory to the Paris Agreement on Climate Change, Sri Lanka has pledged to reduce carbon dioxide by a specified amount voluntarily. Shifting to RE sources is a convenient way of achieving this target. Sri Lanka is eligible to receive financial benefits for undertaking RE projects in view of the saving of carbon emissions, which the government should pursue by submitting suitable project proposals to the Climate Change Secretariat.
The private sector has taken the initiative to build many RE projects up to 2017 generating altogether 1,830 GWh of energy in 2018, which amounts to 11.9% of the total generation of 15,374 GWh (CEB SD 2018). However, there has been a decline in RE development in recent years apparently due to a legal impediment which needs rectification immediately. Power was purchased from unsolicited RE projects built initially at rates valid for 20 years which have been overpriced compared to rates offered for new RE projects based on competitive bids. By expediting shifting to RE projects as planned up to 2025, government stands to save around LKR 43 billion annually.
If the present generation of 8,400 GWh from fossil fuel combustion is replaced with RE sources, it could save CEB around LKR 110 billion annually. To realize this, Government should raise the upper limit of 10 MW for building RE projects by the private sector, enabling it to undertake larger RE projects. Sri Lanka should make an effort to secure financial assistance from Climate Funds to shift from proposed fossil fuel generation altogether in the future moving away for more RE generation integrated into the system.
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Take Human Rights seriously, not so much the council or office
By Dr Laksiri Fernando
The 46th Session of the UN Human Rights Council started on 22 February morning with obvious hiccups. The Office, to mean the Office of the UN High Commissioner for Human Rights, finally decided to hold all sessions virtually online, only the President of the Council and the assistants in the high table sitting at the UN Assembly Hall in Geneva. The President, Ms. Nazhat Shammen Khan, Ambassador from Fiji in Geneva, wearing a saree, was graceful in the chair with empty seats surrounding.
In the opening session, the UN General Assembly President, UN General Secretary, UN High Commissioner for Human Rights, and Head of Foreign Affairs, Switzerland (as the host country), addressed remotely the session. In fact, there was no need for Switzerland to have a special place, as the UN is independent from any host country. Switzerland is fairly ok, however, if this tradition is followed, the UN General Assembly may have to give a special place to the US in New York.
UN General Secretary, Antonio Guterres’ address could have been quite exemplary if he gave a proper balance to the developed and developing countries. He talked about racism and fight against racism but did not mention where racism is overwhelmingly rampant (US and Europe) and what to do about it. Outlining the human rights implications of Covid-19 pandemic, he made quite a good analysis. It was nice for him to say, ‘human rights are our blood line (equality), our lifeline (for peace) and our frontline (to fight against violations).’ However, in the fight against violations, he apparently forgot about the ‘blood line’ or the ‘lifeline’ quite necessary not to aggravate situations through partiality and bias. He never talked about the importance of human rights education or promoting human rights awareness in all countries.
His final assault was on Myanmar. Although he did not call ‘genocide,’ he denounced the treatment of Rohingyas as ethnic cleansing without mentioning any terrorist group/s within. His call for the release of Aung San Suu Kyi and other civilian leaders undoubtedly should be a common call of all. However, he did not leave any opening for a dialogue with the military leaders or bring back a dialogue between Aung San and Min Aung, the military leader. With a proper mediation, it is not impossible. Calling for a complete overhaul as the young demonstrators idealistically claim might not be realistic.
High Commissioner Michelle Bachelet’s address was brief and uncontroversial this time without mentioning any country or region. It is clear by now perhaps she is not the real author of the Report against Sri Lanka, but someone probably hired by the so-called core-group led by Britain. Her major points were related to the coronavirus pandemic trying to highlight some of the socio-economic disparities and imbalances of policy making that have emerged as a result. The neglect of women, minorities, and the marginalized sections of society were emphasized. But the poor was not mentioned. As a former medical doctor, she also opted to highlight some of the medical issues underpinning the crisis.
Then came the statements from different countries in the first meeting in the following order: Uzbekistan, Colombia, Lithuania, Afghanistan, Poland, Venezuela, Finland, Fiji, Moldova, Georgia, Kazakhstan, Equatorial Guinea, Vietnam, Belgium, and Morocco. The obvious purposes of these statements were different. Some countries were apparently canvassing for getting into the Human Rights Council at the next turn perhaps for the purpose of prestige. Some others were playing regional politics against their perceived enemies. This was very clear when Lithuania and Poland started attacking Russia.
But there were very sincere human rights presentations as well. One was the statement by the President of Afghanistan, Mohammad Ashraf Ghani. He outlined the devastating effects that Afghanistan had to undergo during the last 40 years, because of foreign interferences. The initial support to Taliban by big powers was hinted. His kind appeal was to the UN was to go ‘beyond discourse to practice’ giving equal chance to the poor and the developing countries to involve without discrimination.
China’s Foreign Affairs Minister, Wang Yi, made his presentation almost at the end of the first day. This is apparently the first time that China had directly addressed the Human Rights Council. Beginning with outlining the devastating repercussions of the coronavirus pandemic he stressed that the world should face the challenges through ‘solidarity and cooperation.’ He broadened the concept to human rights solidarity and cooperation. His expressed views were quite different to the others, particularly to the Western ones.
He frankly said that what he expresses are the views of China on human rights without claiming those are absolute truths or forcing others to believe or implement them. There were four main concepts that he put forward before the member countries. First, he said, “We should embrace a human rights philosophy that centres on the people. The people’s interests are where the human rights cause starts and ends.” Second, he said, “we should uphold both universality and particularity of human rights. Peace, development, equity, justice, democracy, and freedom are common values shared by all humanity and recognized by all countries.” “On the other hand,” he said, “countries must promote and protect human rights in light of their national realities and the needs of their people.”
“Third,” he said, “we should systemically advance all aspects of human rights. Human rights are an all-encompassing concept. They include civil and political rights as well as economic, social, and cultural rights.” He then emphasized, “Among them, the rights to subsistence and development are the basic human rights of paramount importance.” Fourth, “we should continue to promote international dialogue and cooperation on human rights. Global human rights governance should be advanced through consultation among all countries.”
It was on the same first day before China, that the United Kingdom launched its barrage against several countries not sparing Sri Lanka. The Foreign Secretary, Dominic Raab, delivered the statement from top to bottom attacking alleged violating countries on human rights. But there was no mentioning of Israel for the repression of Palestinians or the systemic racism rampaging in the United States, including the 6 January attacks on the Capitol by extremist/terrorist groups.
His first sermon was on Myanmar without acknowledging the British atrocities or mismanagement of this poor and diverse country during the colonial period. He was quite jubilant over implementing sanctions and other restrictions over the country. Many sanctions, in my opinion, are extortions. Undoubtedly, Aung San Suu Kyi and other leaders should be released, and democracy restored. This is a task of the whole council and when one or two countries try to grab the credit, there can be obvious reservations of others.
His further scathing attacks were against Belarus, Russia, and China. Some appeared factually correct but not necessarily the approach or the motives genuine. The following is the way he came around Sri Lanka. He said,
“Finally, we will continue to lead action in this Council: on Syria, as we do at each session; on South Sudan; and on Sri Lanka, where we will present a new resolution to maintain the focus on reconciliation and on accountability.”
‘Action’ to him basically means repeatedly passing resolutions, of course imposing economic and other sanctions. He said, “as we do at each session”; like bullying poor or weak countries at each session. Can there be a resolution against Russia or China? I doubt it.
What would be the purpose of presenting a resolution against Sri Lanka? As he said, “to maintain the focus on reconciliation and on accountability.” This will satisfy neither the Tamil militants nor the Sinhalese masses. But it might satisfy the crafty Opposition (proxy of the defeated last government). This is not going to be based on any of the actual measures that Sri Lanka has taken or not taken on reconciliation or accountability. But based on the ‘Authoritarian and Hypocritical Report’ that some anti-Sri Lankans have drafted within the Office of the High Commissioner for Human Rights. This what I have discussed in my last article.
In this context, successful or not, the statement made by the Sri Lanka’s Minister of External Affairs, Dinesh Gunawardena, in rejecting any resolution based on the foxy Report of the Office of the UN High Commissioner for Human Rights, in my concerned opinion, is absolutely correct.
President’s energy directives ignored by the Power Ministry: Another Point of View
Dr Tilak Siyambalapitiya
Dr Janaka Rathnasiri laments (The Island 19 Feb 2021) that the Power Ministry has ignored the President’s directive to draw 70% of energy from renewable sources by 2030. I saw the approved costs of electricity production for 2019, published by the Public Utilities Commission (PUCSL).
PUCSL has also approved the prices to sell electricity to customers. Although various customers pay at various “approved” prices, the average income from such “approved” prices in 2019 was Rs 17.02 per unit. It is not only the Ministry, according to Dr Rathnasiri, ignoring the President; PUCSL is also breaking the law, which says prices and approved costs should be equal.
So there is already an illegal gap of Rs 21.59 minus 17.02 = Rs 4.57 per unit of electricity sold. If electricity prices are not to be increased, as stated by many in the government and PUCSL, let us say the following: Distribution costs should decrease by 0.57 Rs per unit. Generation costs should decrease by Rs 4.00 per unit.
PUCSL also published the approved cost of purchasing or producing electricity from various sources for 2019. The actual energy values were different to what was approved, but let us stick to PUCSL approved figures:
I suggest Dr Rathnasiri fills-up the following table, to show how much electricity will cost in 2030 to produce and deliver, if the President’s 70% target is to be achieved and for PUCSL to abide by the law. Let us assume that electricity requirement in 2030 will be double that of 2019.
Since PUCSL has to save Rs 4 from 13.92, the average selling price for energy should be Rs 13.92 minus 4.00 = Rs 9.92. With a target network loss of 7% (in 2019 it was 8.4%), the average cost of production has to be Rs 9.27 per unit. Eight cages have to be filled-up by Dr Rathnasiri.
In 2012, PUCSL approved the energy cost of electricity produced from coal power to be 6.33 Rs per kWh. In 2019, PUCSL approved 9.89 (56% increase). For renewable energy, it was 13.69 in 2012, and 19.24 in 2019 (a 40% increase, but double the price of electricity from coal fired generation). In 2012, rooftop solar was not paid for: only give and take, but now paid Rs 22, against Rs 9.89 from coal. There seems to be something wrong. The price reductions of renewable energy being promised, being insulated from rupee depreciation, are not happening? Either Sri Lanka must be paying too little for coal, or it may be renewable energy is severely over-priced?
On coal we hear only of some corruption every now and then; so Sri Lanka cannot be paying less than it costs, for coal.
Enough money even to donate
Another reason for the Ministry of Power to ignore the President’s directive may be the Ministry’s previous experience with similar Presidential directives. In 2015, the President at that time cancelled the Sampur coal-fired power plant, and the Ministry faithfully obliged. That President and that Prime Minister then played ball games with more power plants until they were thrown out of power, leaving a two-billion-dollar deficit (still increasing) in the power sector. Not a single power plant of any description was built.
Where is this deficit? You do not have to look far. In the second table, replace 24.43 with 9.89, to reflect what would have happened if Sampur was allowed to be built. The value 12.79 will go down to 8.55, well below the target of Rs 9.27 per unit to produce. Not only would CEB and LECO report profits, but the government too could have asked for an overdraft from CEB to tide over any cash shortfalls in the treasury. All this with no increase in customer prices. Producers of electricity from renewable energy could enjoy the price of 19.24 Rs per unit. And that blooming thing on your rooftop can continue to enjoy Rs 22 per unit. The Minister of Power, whom Dr Rathnasiri wants to replace with an army officer, would have been the happiest.
In the absence of Sampur (PUCSL’s letter signed by Chairman Saliya Mathew confirmed cancellation and asked CEB not to build it), PUCSL approved electricity to be produced at Rs 21.59 and sold at Rs 17.02 per unit. The annual loss would be Rs (21.59 – 17.02) x 15,093 = Rs 69 billion per year of approved financial loss. Sri Lanka has a Telecom regulator, an Insurance regulator, a Banking regulator, who never approve prices below costs. Sometime ago the telecom regulator asked the operators to raise the prices, when operators were proposing to reduce prices amidst a price war. But the electricity industry regulator is different: he approves costs amounting to 27% more than the price, not just once but, but continuously for ten long years !
That is 370 million dollars per year as of 2019, the economy is spending, and for years to come, to burn oil (and say we have saved the environment). Did the Minister of Health say we are short of 160 million dollars to buy 40 million doses of the vaccine? Well, being a former Minister of Power, she now knows which Presidential “order” of 2015 is bleeding the economy of 370 million dollars per year, adequate to buy all vaccines and donate an equal amount to a needy country.
Prices are the production costs approved by PUCSL for 2019. The selling price approved by the same PUCSL was Rs 9.27 per unit.
Confusion on NGOs and NSOs in Sri Lanka
If you listen to politicians and journalists here, you will hear of that curious creature rajya novana sanvidane, a Non-State Organization (NSO). Where do you get them? In the uninstructed and dead minds of those who use those terms. In the real world, where politicians and journalists have developed minds, there are Non-Governmental Organizations (NGO). The United Nations is an organization set up by state parties, not by governments. It is true that agents of states, governments, make the United Nations work or fail. Governments may change but not the states, except rarely. When Eritrea broke away from Ethiopia, a new state was formed and was so recognised by the United Nations. However, the LTTE that tried to set up another state was crushed by the established state that it tried to break away from, and the UN had nothing to do with them.
This entirely unnecessary confusion, created out of ignorance, is so destructive that organizations completely loyal to the existing state, are made to be traitorous outfits, for they are ‘non-state organizations’ within the state. There are citizens of each state, but no citizens of any government. Government is but an instrument of the state. In most states there are organizations, neither of the state nor of government: religious organizations including churches. But none of them is beyond the pale of the state.
Those that speak of rajya novana sanvidane give that name partly because they have no idea of the origin of non-governmental organizations. NGOs came into the limelight, as donor agencies, noticed that some governments, in East Africa, in particular, did not have the capacity and the integrity to use the resources that they provided. They construed, about 1970, that NGOs would be a solution to the problem. Little did they realize that some NGOs themselves would become dens of thieves and brigands. I have not seen any evaluation of the performance of NGOs in any country. There was an incomplete essay written by Dr. Susantha Gunatilleka. NGOs are alternatives to the government, not to the state.
Our Constitution emphatically draws a distinction between the government and state, and lays down that the President is both Head of Government and Head of State (Read Article 2 and Article 30 of the Constitution.) It is as head of state that, he/she is the Commander of the Armed Forces, appoints and receives ambassadors and addresses Parliament annually, when a prorogued Parliament, reconvenes. He/she presides over the Cabinet as head of government. The distinction is most clear, in practice, in Britain where Queen Elizabeth is the head of state and Boris Johnson is the Prime Minister and head of government. However, in principle, Johnson is the Queen’s First Minister appointed by the sovereign, and resigns by advising her of his decision to do so.
In the US and in India the term ‘state’ has special significance. In India there is a ‘rajya sabha’ (the Council of States) whose members represent constituent States and Union Territories. Pretty much the same is true of the United States. In the US, executive power is vested in the President and heads the administration, government in our parlance. The Head of State does not come into the Constitution but those functions that one associates with a head of state are in the US performed by the President of the Republic. The US President does not speak of my state (mage rajaya) but of my administration, (mage anduva). Annually, he addresses Congress on the State of the Union. Our present President must be entirely familiar with all this, having lived there as a citizen of the US for over a decade. It is baffling when someone speaks of a past state as a traitor to that same state. It is probable that a government was a traitor to the state. ‘Treason against the United States, shall consist only in levying war against them, or in adhering to their (States’) enemies, giving them aid and comfort’. That a state was a traitor to the same state is gobbledygook.
Apart from probable confusion that we spoke of in the previous paragraph, it is probable that a president and other members of a government, including members of the governing party here, find it grandiloquent to speak of his/her/their state (mage/ape rajaya), rather than my government (mage anduva) or Sirisena anduva’ and not Sirisena state; it was common to talk of ‘ape anduva’ in 1956; politicians in 1956 were far more literate then than they are now.
When translating from another language, make sure that you understand a bit of the history of the concept that you translate. A public school in the US is not the same as a public school in the UK.