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Worldwide tenders for power plants to boost national grid: CEB
View(s):The Ceylon Electricity Board (CEB) will call for worldwide tenders next week to procure several power plants as supplementary power for two to five years, to shore up the national grid.
Ministry of Power & Renewable Energy, Secretary Dr B.M.S. Batagoda told the Sunday Times that the main reason for procuring the power plants was to avoid widespread power failures which may occur, given the current drought situation. “Cabinet has already given the go-ahead to procure the power plants,” he added.
Dr Batagoda pointed out that the national grid continued to be deprived of 300 Mega Watts (MW) of power due to the failure of one unit at the Lakvijaya Coal Power Plant in Norochcholai. Coupled with that, the drastic drop in water levels in hydropower reservoirs meant the CEB needed to balance the national grid.
Accordingly, tenders will be called next week for several power plants including a 100MW land based Heavy Fuel Oil (HFO) powered power plant and a 100MW barge mounted HFO power plant. In addition, the CEB intends to procure 4x24MW HFO plants. Solar and wind power plants are also being procured, with tenders due to be called next week for a solar plant containing 80 units of 1MW each, along with another 10MW solar power plant.
The Govt will also set up two solar parks and two wind parks, each of 100MW capacity.
“All power plants will be procured as Independent Power Producers (IPP). The Govt will be procuring a unit of electricity at the current price of Rs 25-27 per unit. This is the same unit price that applies to IPPs already generating for the national grid,” Dr Batagoda added.
“All plants are also being procured only on short-term basis,” he observed. “We intend to retire all these plants within two to five years,” he stated, stressing they would no longer be needed, once large 500MW Indian and Japanese Liquefied Natural Gas (LNG) fired plants, as well as solar and wind parks scheduled to be built in Pooneryn, come on line.
Dr Batagoda disclosed that the Govt has already suffered a staggering loss of Rs 52 billion for having to generate electricity through diesel power plants that had to be put into operation owing to the drought. “We have asked the Treasury for Rs 31 billion to compensate for the loss and Rs 6 billion has already been released,” he noted. The Treasury has asked the CEB to present audit reports each month, and agreed to release the remaining funds after reviewing those reports.
Nevertheless, Dr Batagoda said the Ministry estimates that an additional Rs 9 billion will have to be spent in the coming months to generate electricity, due to the effects of the ongoing drought.
“Normally, hydropower reservoirs should be at 75% capacity at this time of year, owing to monsoonal rains,” Dr Batagoda remarked. “The failure of the monsoon has meant that hydropower capacity is currently down to 38%. As such, we have altogether stopped generating electricity using hydropower, and all electricity is currently being generated through coal and fuel.”
Given the prospect that monsoons may now be periodically failing, Dr Batagoda said a decision has been taken to base future electricity generation needs without taking hydropower into the equation.