The Secretary to the Treasury S.R Attygalle has taken the Secretary to the Ministry of Power and Renewable Energy Wasantha Perera to task over the inability of the Ceylon Electricity Board (CEB) to live up to the guidelines issued by policymakers to devise a road map to increase the volume and capacity of renewable energy sources. He wants the CEB, a key state- owned enterprise and a critical sector of the economy, to resolve its issues to create a utility which is required by the country.
In a letter dated 5th February titled ‘The operations of Ceylon Electricity Board ‘Attygalle points out how ‘disconcerting’ it is that strategies to achieve the capacity increasing plans are not in place even after two years.
The Treasury Secretary has also found fault with the financial indiscipline of the CEB because of lack of accountability and oversight of management, indicating that it is at least 150 billion rupees in debt to other institutions. The CEB and Ceylon Petroleum Corporation have become the biggest creditors of the two state banks.
The CEB’s management has not taken any rational decisions to balance its investments against its stock of debts and the lackadaisical approach taken by the CEB about the recent power cuts shows a system failure and lack of accountability.
In 2019, the government announced that by 2030 at least 70 percent of the electricity which is generated in the country must be done using renewable energy. Only 15 MW has been added to the national grid since then.
In October 2021, the CEB put forward three points to increase power generation which have not progressed so far. They are the increase of solar power generation capacity by 360 MW in 2022 to reach 3, 714 MW by 2030 which would require an incremental increase of between 150-200 MW per annum between 2021 and 2030, the increase of ‘other wind’ generation capacity to 898 MW by 2030 which requires the addition of 710 MW between 2028- 2030 and the expectation for power generation from LNG to be at 1104 MW by 2024 including from the Kelanatissa NEW GT’s (yet to be awarded), conversion of the Kelanitissa combined cycle and the Sojitz plants on which work is yet to commence including the allocation of funds, the conversion of the West Coast power plant and the commissioning of the Sobadhanavi plant both of which are owned and operated by the private sector.
Among the other non-starters Attygalle lists in his letter is the example of the plan to add 400 MW of ‘firm power’ operating with LNG by 2026 with an expected increase to 1100 MW by 2030. ‘This Ministry is yet to be informed of any plan to establish such assets in the next few years and the expected mode of financing of these capacity additions. Similarly, although it is envisaged to convert the existing power generating plants in Kelanitissa to a total capacity of 754 MW to operate on LNG by 2024, the timeline with the required financing is not indicated even in the CEB budget for 2022’.
In what appears to be an obvious move to have oversight of the CEB’s undertakings Attygalla asks it to keep the Treasury informed about the impact of renewable energy projects that are pending with bilateral and multilateral funding agencies like the Asian Development Bank, World Bank and the French Development Agency. Attygalle justifies this because of the ‘CEB’s continued failure at project management and to manage its finances and operations.
It is the CEB’s same wasteful approach which makes Attygalle ask for the ‘Gamata Balagaara Programme’ to be stopped because it is a ‘misadventure’. A significant number of distribution transformers that have been reserved for the programme are preventing electricity customers from connecting their rooftop solar systems to the electricity supply network and the success rate of the first 850 distribution transformers which were offered under the programme have been far from satisfactory.
Because of the CEB’s poor debt management it has failed to devise any credible plan to manage its finances except to request a tariff revision. Attygalle points out that ‘this appears to be the easiest yet the option with the most complications’.
To read the full letter click on: –
