Friday, March 28, 2008

The history , trends and the future of the power industry of

The history , trends and the future of the power industry of Srilanka
by Hasala Dharmawardena

Why cheap electrical energy ?

In this era of astounding development and unimaginable technological achievements, electrical energy has become a critical infrastructure for economic development and the improvement of the quality of life. Modern life is unimaginable without electricity. It lights houses, buildings, streets, provides domestic and industrial heat, and powers most equipment used in homes, offices and machinery in factories. In a poor country as ours availability of cheap electricity has become more a life and death struggle than a basic need for the common man . Improving access to electricity countrywide is a key factor in alleviating poverty. Our Nation's economic growth and prosperity depends on reliable, plentiful, and affordable electricity.

The economic and social aspects

The positive correlation of the gross domestic product(GDP) growth and the electricity consumption can be observed in any country which enjoys a high growth rate ( eg: India, China). Cheap electricity reduces the production cost of products thus making the products more competitive in foreign markets .This also gives a good leverage for the local producers against the foreign imports. Foreign investments will get attracted to our country due to low production costs. All this will create more jobs for our people. One new job created is said to feed four mouths. This will contribute to break the cycle of poverty at its very roots. Thus poverty will be alleviated .

On the other hand the repercussions are horribly disastrous if the electricity price goes sky high with respect to the buying power of a country. The production costs will increase exponentially, the local producers will lose their competitive edge, exports will decrease and foreign imports will flood the market. All this will result in closure of factories and relocation of investments of foreign and local investors to other countries. Unemployment will increase day by day. This will contribute to a more and more jobless, and hopeless common mass of people, fighting a great battle against poverty for their bare survival. The people will be more and more desperate .They will be seduced by evils such as robbing, murdering and peddling drugs etc. They will seek solace in self annihilating drugs and extremist political movements with the agenda of revolution through an armed struggle culminating in a blood bath of the whole country. These factors will contribute to the cycle of poverty and the degradation of the quality of life of our country. The country will start to fall to the “abyss” of anarchy and destruction.

Why is our electricity cost high

The Lakshapana complex supplied the initial power requirements of our country. Then the Mahaweli complex was implemented to supply the increasing demand due to the high rate of industrialization which occurred after 1977. All these were hydro power plants, so though they had a high cost for the infrastructure initially, they paid in the long run with a very low overall cost per unit. But after the construction of Samanalawewa hydro plant in 1992 , no major hydro power plant was constructed to counter the ever increasing energy demand. All the needed power was generated by new Thermal power plants which were constructed stage by stage from 1996 to the present time.

The energy generated from Oil has increased from 0% to ~60% within a short span of about 9 years.

The three thermal plants at Kelanitissa and Sapugaskanda run on auto-diesel, causing massive losses for the CEB daily. According to very conservative estimates, the Ceylon Electricity Board(CEB) incurs a loss of Rs. 17 on every unit produced at a cost of ~Rs. 25, which is in turn sold to the public at Rs. eight.
Auto diesel is not used by any developed or developing nation for power generation because of its high costs and unreliability of supply due to the volatile political situation in the Middle East. But sadly Srilanka may be the only non oil producing nation which relies on oil for power generation with a steadfast refusal for cheaper reliable fuels such as coal.

Fortunately the country has come to realize the great idioticy, and now coal power stations are being constructed with vigour . “Better late than never”

How to ensure a cheap diversified smooth flow of energy ?

Long term National policy

Though there was a long term policy on paper, called the “long term expansion plan” it was not implemented because of the half hearted approach of the policy makers and implementors due to law suits, political instability etc... They were not aware of the importance and they had shrugged off their responsibilities without thinking of the serious consequences the country will come to face in the future. Plans are, useless if they only exist in paper. They must be implemented with vigor by the relevant authorities. The plan should be rationalized as a national policy with a national consensus. This will ensure that it is carried on and implemented without hesitation, even if the governing political parties change. This is the procedure that we see in developed countries such as USA. If we have a practical long term policy then no haphazard decisions will be needed to taken in a hurry without proper protocol and procedure ( eg: for some combined cycle power plants the tender procedure was bypassed deviating from normal tender procedures). This will contribute to minimizing the corruption involved in such transactions.

Given the shortsighted way the policy implementors have worked there seems to be some hidden arm, with a hidden agenda working to instabilize our country and reap great profits, by using our energy instability. These organisations(mafia) and individuals should be identified and dealt with accordingly.

The proposed Norochcholai power plant was delayed from 1996 to 2006. According to Dr. Tilak Siyambalapitiya “ Norochcholai delay costs 84 million rupees per day , Protesters and NGO s, and perhaps some prospective power plant suppliers too, are doing their best to force further delays on these vital power plants. “ This estimate was done in 2006 now after two years this would have passed the 130 million mark. This money would have been better spent on development projects, but the country (the common peasant) will now have to pay a huge price for this, as the delay was not one day but ten long years. The monetary loss will top the 480 billion mark, but the effect it will have on our country will not be measurable using monetary terms, as the socialistic degradation will be devastating.

The path to self sufficiency in energy

Be it oil or coal we will have to rely on other countries for fuel. Given the importance of energy to a country, we must try to minimize our reliance on other countries.

That is why research is of paramount importance if we are to think of a future of self-reliance in energy. The research should be aimed at finding energy sources which are suitable to Srilanka. More money should be invested on research. The government must engage the universities and undergraduates to do research to find a viable solution from within our country rather than reaching for foreign experts, who more or less try to fool our officials to implement infeasible projects to extract huge sums of money for the so called “expertise”.

The question is that, those “experts” always propose “novel” schemes which even their countries have not implemented due to infeasibility. These hawks try to put those ideas to our officials and do their utmost to fool our officials to implement these projects, whose practicability has not even been proven in the lab. We must keep in mind, that over two thousand years ago our engineers made Dams with a technology , unimaginably sophisticated even by todays standard. That creativity of our ancestors runs deep in our blood. We must never forget the fact that we had engineers like D.J. Wimalasurendra.

The undergraduates, and alumni are willing, with fresh ideas, to help our nation find a solution and be self sufficient in our energy demands, but unfortunately the relevant authorities are not realizing the potential they have. Instead of relying on so called “foreign experts” and wasting money for totally useless feasibility surveys, they should give that money to the local engineers and universities if they are really sincere in their efforts.

Unfortunately The technical universities are underfunded with the quality of education decreasing year by year due to insufficient funds for research and education. The government as well as the private sector must understand the importance of funding the undergrads and putting up new infrastructure and facilities. That is essential for the development our energy industry. That itself is a huge investment, with great profits, contributing towards Energy self sufficiency of our country.

We must also recognize the importance of finding a solution which is suitable to our country, rather than trying to customize solutions found out in other developed countries such as USA and Japan. We being a third world poor country, do not have the same resources, capital and money, as is applied to those countries.

We must try to implement an open energy market to bring a more robust and reliable energy supply. In the long run the local investors must also be given a chance to fund the projects to keep the industry competitive and healthy.

Why coal to fuel the Thermal power stations ?

Other resources like crude oil, coal bed methane, renewable energy sources etc. are meagre and not capable of catering to our energy requirements in the long run. Gas and crude oil prices are volatile in the international market and coal import is a much cheaper option than import of oil and gas , especially in a country like Srilanka which has world class ports and coastal locations . According to experts , coal is likely to remain main fuel in the world for energy generation till 2031-32.

Though there are powerful groups lobbying against coal power in our country, coal is one of the world’s most important sources of energy, fuelling almost 40% of electricity worldwide. In many countries this figure is much higher: Poland relies on coal for over 94% of its electricity; South Africa for 92%; China for 77%; and Australia for 76%. Also coal has been the world’s fastest growing energy source in recent years – faster than gas ,nuclear, hydro and renewable or oil .

Also as minimizing the risk of disruption to our energy supplies is becoming ever more important (with ever increasing conflicts in oil producing countries , oil is becoming a risky commodity) we need to get rid of our addiction to oil as a fuel for thermal power generation.

Though coal remains the world’s most abundant, safe and secure form of energy, the public's perception of coal-fired power plant is not favorable due to misconceptions. The coal industry is much older than many other energy industries. For many, coal still conjures up belching chimney stacks and smogs. Though the industry has made considerable improvements in cleanliness, efficiency and safety over the past forty years, the public is not aware of these improvements in environmental and social performance. Even UK is reverting back to coal for power generation. They recently passed a bill to construct a large number of new coal fired power stations. They heeded the warnings of their experts.

The future

The view of the past is now blurred, but by contemplating the past and correcting the mistakes, we will be able to think about a bright future. By this time the policy makers have put in to motion, the policies that lay dormant in paper for years. This is the beginning of a new horizon in the power sector of our country, which brings a bright ray of hope to a otherwise dark sky.

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