PUCSL approves emergency power purchases

Adequate supply of fuel to power plants could immediately resolve the rolling power outages in the country caused by shortages of 200–400 MW, says Janaka Ratnayake, Chairman of Public Utilities Commission of Sri Lanka, the electricity sector regulator.

“Lack of funds to buy the required fuel to fire power plants is the main reason for continued power interruptions in large parts of Sri Lanka. We also have run down hydro reservoirs as hydro power was used excessively in the months of December last year and January this year to provide electricity,

“The CEB has been forced to shut down 350 MW of Thermal power plants for the past two weeks due to lack of fuel supply. We have generated 76 percent electricity from thermal power plants 19 percent from hydro and five percent electricity from renewable for this month so far. Hydro generation has increased to 22 percent during the month of February this year due to unavailability of fuel for thermal generation plants which stood at 18 percent in the same month last year,

“Apart for the lack of fuel supply, we also have a technical constraint in the Southern grid where we have advised the Ceylon Electricity Board to find immediate solutions way back in 2017 which has not been materialised yet,”

The currency crunch that the country is facing at the moment has delayed the import of fuel, which has led to power cuts countrywide, says Ratnayake.

“We currently are in the forex crisis where we do not have sufficient funds to buy fuel. We can end this power cut if we get sufficient fuel stocks to operate our power plants,”

Ratnayake says the PUCSL is also aware of the financial issue that the Ceylon Electricity Board is going through.

“We are aware. We have asked electricity consumers to pay their bills on time to reduce the financial burden of the CEB to a certain extent. But the issue is bigger. The electricity generation cost has increased 120 percent from the last tariff hike. The generation cost per electricity unit at the moment is 37 rupees. But we are providing an electricity unit at 16 -17 rupees on average, which does not reflect the actual generation cost. Also, the price of a crude oil barrel in the world market has increased to 113 dollars this year. The Central Bank of Sri Lanka also had taken a decision to float the rupee given the current economic conditions which have caused a higher market volatility at present. All these reasons have a much larger impact on the generation cost of electricity. We believe in a cost reflective tariff to strengthen the CEB and the economy of the country while not burdening the electricity consumers,” Ratnayake said.

Commenting on the Southern grid issue, the Chairman of PUCSL said that CEB had been instructed to find long-term solutions for the issue where 100-150 MW of capacity is being lacking at present.

Considering the existing fuel shortage of the country and electrical energy capacity shortage of the CEB, coupled up with the long term forced outage of all thermal power plants at Kelanitissa, Sapugaskanda and Kerawalapitiya due to no fuel with severe depletion of water resources in reservoirs that led to experience more than seven hours daily power cut to the electricity consumers, the cabinet has declared an “emergency situation’ in the energy sector as required under section 43(4) (c ) (ii) of the Sri Lanka Electricity Act in keeping with the directive of the President made on 02nd March 2022.

With that, CEB has requested the approval of 93 MW of capacity under short-term power purchase agreement from ACE Power (Embilipitiya) power plant for months in order to reduce the long hours of power interruptions immediately.

“We approved the request given the priority of the fuel supply to CEB power plants.

“At the same time, we are having a steady long-term plan to ensure continuous supply of electricity to Sri Lanka. We have approved 600 MW of LNG power plant already.”