Government Approved 4 Coal Power Plants and Weaken the Powers of PUCSL

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The Cabinet has sanctioned four new coal power plants—two in Norochcholai and two in Trincomalee—and a proposal to amend the Sri Lanka Electricity Act to weaken the industry regulator, Public Utilities Commission of Sri Lanka (PUCSL).

Approval was granted this week on a Cabinet paper containing these and several other recommendations. It was signed by Prime Minister Ranil Wickremesinghe, Finance Minister Mangala Samaraweera, Power and Energy Minister Ravi Karunanayake and Highways Minister Kabir Hashim.

Each proposed new coal power plant is 300mw or a total of 1,200mw. Three will run on “high efficient coal” while the fourth has been termed a “contingency power” or “buffer power plant”.

The Government’s policy on coal power plants, which are being phased out globally owing to environmental concerns, has been inconsistent. After years of negotiations, President Maithripala Sirisena shelved proposals for an Indian-funded coal power plant in Sampur, citing pollution. He urged the Indian Government to support a liquefied natural gas (LNG) alternative instead. The President maintained this position for a while, but changed his mind around 2018, when he instructed the independent regulator, PUCSL, to approve coal power plants. That year, the Government decided to diversify the country’s power generation mix by including coal, LNG, heavy fuel, renewable energy, solar, wind and so on.

Since Mr Karunanayake took over the power and energy ministry in January this year, he has also pushed for coal power plants. A Cabinet decision dated June 19, 2019 now grants permission for eleven recommendations reportedly made by a ministerial committee appointed in April. These include solar, wind, biomass, solid waste, LNG, coal and hydropower projects.

One of the recommendations is to “amend the Sri Lanka Electricity Act, in order to implement favourable regulatory mechanism in the country and to resolve the issues between the CEB and the PUCSL by clearly empowering the Cabinet of Minister for economic and technical regulation and empowering the PUCSL for consumer protection and safety regulation in the electricity industry [sic]”.

Last week, the Sunday Times reported that Minister Karunanayake is seeking to whittle down the authority of the PUCSL, particularly in matters of procurement over which the regulator has purview. His proposal sees the downgrading of the PUCSL to mere status of a ‘safety regulator’ and electricity industry ‘ombudsman’.

He proposes to amend the Sri Lanka Electricity Act No 20 of 2009 and Sri Lanka Electricity (Amendment) Act 31 of 2013 so that the “economic and technical regulatory powers” of the industry are transferred to the Cabinet of Ministers through the minister and the ministry in charge of the subject of power and energy.

Only Minister Mangala Samaraweera, one of the signatories of the Cabinet paper, has qualified his agreement by including a handwritten note: “Procurement is subject to Government procurement procedures”.

The solar power projects approved by the Cabinet are: a 300mw plant in Pooneryn; two plants of 100mw each in Siyambalanduwa; 300mw rooftop systems from 300,000 households; 500mw small-scale solar projects (less than 10mw); and 5x100mw of “power wheeling concept with a profit sharing with the CEB (which will facilitate to eliminate the subsidy which, at present, is borne by the CEB) [sic]”.

The wind projects are: 100mw wind power park (stage I) in Mannar; 150mw wind power park (stage II) in Mannar; 100mw wind power plant in Mannar mainland; 100mw of wind power projects in the Puttalam district; and 200mw of wind power projects in the Jaffna and Mullaitivu districts.

Twenty biomass projects amounting to 200mw have been approved as well as four to six solid waste projects amounting to 100mw.

The LNG projects are: 300mw LNG combined cycle power plant in Kerawalapitiya (Government-to-Government–India); 300mw LNG combined cycle power plant in Kerawalapitiya (Government-to-Government–Japan); 400mw LNG combined cycle power plant in Hambantota (Government-to-Government–China).

The coal power plants are: 300mw new coal power plant in Norochcholai (high efficient coal); 300mw new coal power plant in Norochcholai (contingency power or buffer power plant); 300mw new coal power plant in Foul Point, Trincomalee (high efficient coal, phase I); and 300mw new coal power plants in Foul Point, Trincomalee (high efficient coal, phase II).

Also envisaged are four 25mw gas turbine container mounted plants; four 24mw furnace oil power plants; 100mw battery capacity facilities (for high demand periods and load balancing); and an additional 25mw battery capacity facilities for load balancing.

The Cabinet gave permission to start construction of already finalised hydropower projects and expedite the rest to award power purchase agreements before the end of this year. They are: Uma Oya 120mw hydropower plant; Broadlands 35mw hydropower plant; Moragolla 31mw hydropower plant; Seethawaka 20mw hydropower plant; Thalpitigala 15mw hydropower plant; Maha Oya 3x200mw pump storage hydropower plant; and “approximately 200m of all environmentally friendly mini hydropower plants”.

Authorisation was also given to amend the Sri Lanka Electricity Act to exempt renewable energy projects of less than 10mw capacity from following a tender process.

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