Saturday, June 18, 2016

Energy planning Methodology of the Sri Lanka electricity sector : Where did it all go wrong?

The news relating to the Sri Lankan electricity sector is currently swamped with different ideas on what the generation mix should be. Strong lobbying groups aka 'Energy Mafia', are lobbying for different Energy options from LNG,  Coal, Wind, Solar PV, Solar Thermal to Biomass. The clashing of opinions is good, but only as long as they result in far sighted decisions that will benefits the country.

Apart from the lobbyist the political entities and stooges are also going back and forth, armed with data, presentations and publications. Some even having the temerity to wave the manifestos of the winning political leader and quoting them as policy directives, rather than the National Energy policy gazetted in the parliament. By hook or crook these people are trying to enforce their thinking and force the energy mix in to what they perceive is good.

Unfortunately these discussions are not resulting in in any decisions, whereas quick decisions are needed to avert a power crisis in 2018. With all these systems in place, it is interesting to analyze why and how things went wrong in the current Energy planning process of the Sri Lankan electricity sector, and how the energy planning process should be changed to rectify the deficiencies. 

I strongly believe that the timeline of the energy planning process is wrong. What is the point in debating how to power year 2016 at the end of the year 2015? Obviously any power plant will take at least 3 years to build! It is not possible to build large power plants in a few months time and these should be hard decisions taken way before 2015 and currently should be in the implementation stage. Now let us take a closer look at the timeline of the Sri Lanka Energy planning exercise for 2015-2034, to understand exactly what went wrong. 

In August 2015, The TSO - CEB submitted the (biannually revised) LTGEP for 2016-2034 to PUCSL for approval. The PUCSL called for comments and public hearing in September. In January 2016, PUCSL rejected the plan and asked for the TSO to revise it.  The PUCSL did not ask, nor did the TSO give, a specific timeline for the submission of the revised version. Currently, in mid-June 2016, we are yet to see any revised LTGEP, which ironically plans out how the TSO serves the energy demand of 2016!. Talking about bad planning, this method must take the cherry!

What went wrong is simply choosing the wrong time line for the energy planning process. Simply put, a long term generation plan should never have short term decisions to be a part of it. The 2016-2034 plan should never be discussed at the the end of 2015. The plan that should be discussed is the 2021-2034 one. The decisions and the plan for 2016-2020 should be fixed and currently being executed. The plan for the short and mid-term electricity supply (say 5 years) should NOT be a part of the long term generation plan. Assuming that the planning exercise is conducted in the year X, then the Long term plan, that makes sense to discuss, should be the energy supply plan for the year from X+5 to X+20. Due to the long lead time required for constructing and commissioning a power plant this is the mechanism to follow if we are to  have a stable, cheap and reliable Electricity Power Supply for Sri Lanka.

In my opinion, not requiring to agree upon a timeline for the re-submission of the LTGEP shows the weakness of PUCSL. They are a very young organization and do not have  a experienced, qualified workforce to regulate the electricity sector. In fact, it could be argued that the weakness and naivety of the regulator is exploited  by the TSO. 

The PUCSL, the Energy ministry, and CEB are  still debating (in June 2016) on whether to go for Coal or LNG. However the plans for 2016 are not being executed which is the harbinger for a another era of power cuts! The planners should discuss the 2021-2034 plan this year but only while executing the 2016-2020 plan! They should change the planning methodology to reflect this timeline for future exercises! 

It is better to take bad decisions rather than taking no decision at all, because a shortage in electricity supply will cripple the economy of our country!