Experts slam new Gas Turbine project

Top international experts have raised doubts about the use of LNG (Liquified Natural Gas) in the proposed 300 MW HFO/LFO/LNG Combined Cycle Gas Turbine Power Plant at Kerawalapitiya, saying it is not a feasible option.

The confidential study has said the power plant would have to use automotive diesel fuel and this would result in the national economy suffering avoidable costs that could exceed Rs 14 billion annually.

The plant was launched on Wednesday with the signing of agreements with the respective parties.

The experts, who declined to be named, said the objectives of their analysis was to present to policy makers at the highest levels the fuels approved by reputed global turbine manufacturers.

It was also intended to suggest the use of the lowest price fuels which have the approval of turbine manufacturers

It said terms such as ‘heavy diesel’, ‘light fuel oil’, ‘Duel fuel’, ‘light fuel oil’ and ‘heavy fuel oil’ and gas turbine fuel have been used without stating the characteristics of the fuels and stating that turbine manufacturers’ critical requirements for metallic contaminants that cause serious corrosion problems, shorten engine life and increase operating costs are met.

“Such obfuscations result in policy makers being led to make decisions that could leave damaging and irreversible cost to the economy,” the confidential report prepared this month, said.

The experts said their study was based on numerous media reports of Cabinet proceedings with regard to recommendations of a Project Committee (PC) that evaluated the Kerawalapitiya project.

They said the some of the major points of the reported PC recommendations that should be of concern are that the PC has not made any comment that neither LFO nor HFO can be used in gas turbines whether in Simple or Combined-Cycle and hence not admissible as fuels specific to top turbine manufacturers.

Highlights of the report:
LNG is not available in Sri Lanka and if LNG is to be imported, it could require capital investments exceeding $300 million for infrastructure. LNG based Energy charge would exceed USC 11 per kWh and not USC 7.0 per kWh, as stated in the PC report and power price will exceed USC 15 per kWh.

Fuel cost is a pass through, i.e. the CEB will bear the fuel cost burden and costs of errors by design or oversight by project proponents in their proposals have to be borne by the CEB.

It said both LFO and HFO are residual fuels and the metal contaminants of both fuels far exceed permissible limits. Not many of the big turbine manufacturers approve the use of these fuels while the use of these fuels will result in major operating problems, including corrosion of turbine parts, increased maintenance costs, shortened turbine life and efficiency lowered to about 30 percent.

It said the PC report on which the Minister has relied on is ‘fatally flawed’.

In its conclusions, the report said turbine manufacturers specify certain critical specifications among several others, pertaining to metallic contaminants that affect turbine operations, and there is no room for deviating from these specifications.

It said the fuels that qualify are natural gas and re-gasified liquefied natural gas (LNG), naphtha and distillate diesel fuel. “Neither the Ceylon Petroleum Corporation nor any regional refinery produce fuels other than diesel of any description produces any product referred to as ‘heavy diesel’ that meet general specifications of turbine manufacturers,” it said.

The report said if the CEB is to build gas turbine power plants the only fuel that could be used in Sri Lanka is automotive diesel fuel.

Additional cost
Automotive diesel fuel (ADF) costs about 40 percent more than fuel oil which can be used in reciprocating diesel engines that could generate power.

There are currently about 400 MW of such engines operating satisfactorily in Sri Lanka, compared to about 300 MW of gas turbine power plants.

If gas turbines are used the additional costs to the CEB per year compared to lower cost fuels in diesel engines that could use fuel oil is estimated at a minimum of Rs 14 billion.

“With the existing gas turbines the CEB’s debt would increase from Rs 60 billion to Rs 120 billion within 18 months,” the experts said.

“If a gas turbine power plant is constructed on the expectations raised that fuel oil or a product that is referred by project proponents as ‘heavy diesel’ that meets the GE specifications at a price comparable to fuel oil, that is not available either from the CPC or any regional refinery, having constructed the power plant the CEB will be compelled to use automotive diesel fuel,” the report said.

Cost of Automotive Diesel Fuel
The cost of automotive diesel fuel (ADF) will depend on the price of crude which has ranged from $ 32 per barrel to $ 55 per barrel. The experts have urged a full and extensive review of the issues raised on this project.