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Renewable energy: Shocking indictment on CEB failure
A national audit has delivered a stinging indictment on the Ceylon Electricity Board’s (CEB) failure to prioritise renewable energy, saying it is a violation of clearly stated national policy and Sri Lanka’s international pledges.
As recently as 2020, only 37 percent of Sri Lanka’s electricity was from renewable energy sources. Just 12 percent of this was new renewable energy (NRE)–mini-hydro, solar, wind, biomass and agricultural or municipal solid waste, observed the National Audit Office (NAO) in an evaluation of the development of new renewable energy (NRE) sources.
In a report presented to Parliament this week, the NAO said the wind and solar power component was a paltry 5 percent. Fuel and coal accounted for 63 percent of production. The national policy, however, is to generate 70 percent of electricity from renewable energy sources by 2030, which is a mere eight years away.
The national energy policy and strategies are contained in an August 2019 gazette. A Cabinet decision in September last year also identified key targets: 70 percent of power generation from renewable sources by 2030; no more coal power plants; and carbon neutrality in power generation by 2050.
The Power Ministry Secretary was instructed to direct the CEB Chairman to draw up its Low-Cost Long Term Generation Plan (LCLTGP) 2022-2041 to reflect these principles. But in July 2021, industry regulator, Public Utilities Commission of Sri Lanka (PUCSL), rejected the LCLTGP that the CEB submitted as it was not in line with the national policy or the Cabinet decision.
The CEB had planned for just 50 percent of electricity through renewable energy sources by 2041 and also slipped in two coal power plants, the NAO pointed out, adding that the Lakvijaya coal power plant alone emitted around 5,000 tonnes of carbon dioxide (CO2) a year. The CEB has been directed to draw up a new LCLTGP and present it before June 30 this year.
Sri Lanka is among the 43 countries of the Climate Vulnerable Forum that has agreed to make electricity generation 100 percent renewable as rapidly as possible and by 2050 at the latest. The NAO states that “this will not be achieved as planned by the energy policy through the continuous construction of long lasting coal power plants”.
Between 2017-end and 2019, just 13 solar power projects of 1MW each were added to the national grid. At the time of audit, applications were invited for wind power plants of a total capacity of only 60MW. And a bare 269MW of power was connected to the main grid under the ‘Surya Bala Sangramanaya’ rooftop solar power initiative launched in September 2016.
“Although it was aimed to generate 1,000MW capacities by 1,000,000 rooftops by 2025, only 24,696 customers had connected 269MW to the national grid as at 2020,” the report says.
There was no action to minimise the time taken–more than two years–to pass renewable energy projects. The Power Ministry had been expected to set up a committee of officials from government agencies and ministries to coordinate approvals and land acquisition by end-2019. This was not done.
NRE project developers need consent from 10 line agencies to get a generation licence. And at the time of issuing an energy permit, they must renew the approvals from the Central Environmental Authority, the Forest Department and the Wildlife Department due to expiration. A generation licence can therefore take two to five years.
Work on 58 NRE projects was halted even after the issuance of energy permits, depriving the grid of 129.75MW of power. Thirteen of these (23MW) had not started construction as relevant Government agencies had not issued or renewed various approvals; 12 of them (13MW) were stopped over land acquisition delays; 25 projects (80MW) were held up by the CEB not signing power purchase agreements (PPAs); eight (14MW) were halted owing to other reasons.
Until the beginning of 2017, there was a standard pricing system designed to attract local NRE investors. From that year, however, the CEB decided to award contracts based on competitive bidding. Ambiguities in law encouraged this.
Consequently, developers who had already signed the standard PPAs were allowed to continue. But 144 (699.96MW) new parties interested in NRE were already registered with and on a waiting list of the Sustainable Energy Authority of Sri Lanka (SEASL). This earned the Authority Rs. 42‚233‚000 in fees.
A further 1,374 investors–amounting to a total of 4,014.84MW–were at various stages of compliance after receiving temporary SEASL permits. In comparison, Lakvijaya generates 900MW of power. All this was suspended when the CEB abruptly stopped entering into new PPAs with SEASL licence-holders.
The UN Framework Convention on Climate Change (UNFCCC), which Sri Lanka has ratified, resolves to replace thermal plants with liquefied natural gas (LNG) power plants in line with the charter to keep global warming below 2 degrees Celsius. Not a single LNG plant has been built in Sri Lanka so far.
A combination of factors has resulted in a gradual increase in the CEB’s purchase of high-cost electricity from private diesel power plants. The percentage of total emergency procurement in 2020 increased by 14 percent over 2017, the NAO said.
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