Jan 20, 2019

Three big LNG power projects on hold as engineers protest Featured

Three international liquefied natural gas (LNG) projects set to generate more than 1,400 MW of power or almost half the daily electricity requirement have been put on hold due to objections by engineers — forcing the government to depend on emergency power supplies at higher cost.

The problems arose after three cabinet-approved LNG projects from China (400 MW), Japan (500 MW) and India (500 MW) were delayed with Ceylon Electricity Board (CEB) engineers, most of whom make up the Engineers’ Union, objecting to the projects on the grounds they were not compatible with the existing system.

Power and Energy Ministry Secretary Suren Batagoda said the ministry was not accepting the objections raised by the Engineers’ Union as the ministry was in a position to negotiate with the foreign companies to reduce the generation capacity and ensure that the LNG projects were compatible with the current system.

He said that as a result of the delay, the ministry had already got cabinet approval to buy 100 MW of power, for which tenders would be called next week. The ministry would also be compelled to buy more emergency supplies from independent power plants in the coming months.

CEB Engineers’ Union President Saumaya Kumarawadu told the Sunday Times that though the main reason for their protest was that the proposed projects were not compatible as they could trigger power breakdowns affecting large areas, the union was also opposed to the projects as they were unsolicited.

“The Government has not disclosed the unit cost at which it would be buying electricity from these projects. This raises questions about the high cost which the people will have to pay for electricity,” he said.

Meanwhile, the Public Utilities Commission of Sri Lanka (PUCSL), which is entrusted with the responsibility of ensuring uninterrupted electricity supply, has blamed, both the Government and the unions for the delay in implementing the proposed power projects.

PUCSL spokesman Jayanath Herath said the proposals put forward by the PUCSL to the CEB during the past three years also had been ignored leading to the current crisis where the CEB had to depend on emergency purchases.

He said the emergency power purchases were higher in price with the cost varying from Rs 26 to Rs 40 a unit, while the CEB sells a unit at Rs 16 to the consumers. “The emergency power purchases could lead to an increase of the unit price paid by the people,” he added.

He revealed that last year, the CEB lost about Rs 50 billion.

The PUCSL has refused a CEB request to carry out emergency power purchases from three private power plants on the grounds that the cost per unit was high. The power plants are Embiliptiya (100 MW), Matara (25 MW) Asia Power (50 MW).