Private power plants and their role in the depreciation of the ruppee

Private power plants and their role in the depreciation of the ruppee

Written by Staff Writer

02 Oct, 2018 | 9:17 pm

Colombo (News1st) – The increasing outflow of US dollars for various imports had had a severe impact on the Sri Lankan economy as well as the value of the Rupee. According to the Central Bank, a major portion of Sri Lanka’s US dollars is spent on importing fuel.

The cost incurred by the state in importing fuel for power generation is also on the rise. The Norochcholai coal powerplant, which was meant-to be a low-cost power generation project, has still not been utilized at its full capacity.

The power plant’s first generator was inactive for a total of 495 days from January 2015 to the 30th April this year. This means that the generator has been inactive for nearly 41% of the time during this period.

The power plant’s second power generator was also inactive for an extended period due to renovation activities and resumed operations last month. However, the flue-gas desulfurization unit in this machine is yet to be repaired. Environmentalists state, that release of sulfur dioxide into the atmosphere, has raised concerns over the possibility of acid rainfall in the area.

This generator which has a capacity of generating a maximum of 300 megawatts daily, contributed around 270MW initially however over the past year it has only been contributing 200MW to the national grid. The Ceylon electricity board states that the reduction in power generation is due to a technical error in the generator.

The CEB further states that an additional two weeks will be required to renovate the first generator, which has been inactive since the 24th of September last month.

Due to renovation and technical faults, the coal powerplant has failed to supply its target of 900 megawatts to the national grid. Therefore, the electricity board has had to purchase electricity from private companies on a daily basis. In 2017, the electricity board incurred a cost of Rs. 8 billion to purchase electricity from the private sector. By May this year, the CEB racked up a bill of Rs 4 billion by purchasing power from the private sector.

It’s been four years since the Norochcholai coal power plant was vested in the public. However, this power plant has only contributed to the difficulties faced by the people.

The power plant operating without a license for more than a year was not only a cause for disappointment but also paved the way for many health issues in the area.

Though a case was raised against the powerplant in 2016 at the high court and was advised to identify suitable solutions through dialogue with the respective groups, it is reported that the electricity board has not taken further steps to resolve these issues.

While the government emphasizes limiting imports to the country, the highest cost incurred was to import crude oil. Since a majority of Crude oil is used for thermal power plants, the main culprit behind the depreciating rupee can be identified as diesel power plants owned by the private sector.

Should not the private sector power plants be taken over by the government to control this situation?

Ministers, officials, and educated engineers, When will these issues be addressed?

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