SL should prepare implementable electricity generation plans: Nishan de Mel

Oct 15, 2019 (LBO) – Sri Lanka should prepare implementable and consistent electricity generation plans incorporating PESTAL factors, global trends and policy changes, without focusing only on the technical mix of the electricity generation, an economist said.

“I think we misunderstand the problem of planning. We think that planning is simply an act of getting the technology mix right. But that’s not planning. That’s a stone age planning,” Dr. Nishan de Mel, Executive Director and Head of Research of Verité Research & Commissioner of Public Utilities Commission of Sri Lanka voiced at the Energy Forum 2019, organized by the Public Utilities Commission of Sri Lanka.

The electricity generation plan or the least cost long term generation expansion plan prepared by the state utility Ceylon Electricity Board (CEB) for 10 years which revised in every 02 years. The electricity sector regulator, Public Utilities Commission of Sri Lanka has the powers to approve the power plans of the country.

Dr de Mel, said factors like political, ecological, social, technological, economical and legal (PESTEL) should be studied in-depth in the planning level to prepare implementable generation plan for the country which also can attract foreign and local investments.

“We consider technology and economics to some extent but you also have to consider the political feasibility, the ecological viability and the socio-cultural consequences. The planning that done in Sri Lanka today, is simply financial and economical. The cost of pollution, the other cost that enter into society through the use of that technology is not planned,” Dr de Mel said.

“There is no demand elasticity-based estimation how demand will grow which means we are not doing real economic planning either. It is simply the technology that we are planning, but I think we need to revamp planning. Make it a modern sensible planning activity.” Dr De Mel added.

“Let’s take a hypothetical example, suppose you want to have a coal power plant in Sri Lanka. There are three places in the country where you can build a coal power station. In Norochcholai, in Sampur or in Hambantota. Whatever you agree about the technology, Norochcholai people, societies and churches will never let you to build another power plant there. You got to go to Norochcholai and see the pollutions and health consequences and the calamity that the society is experiencing. There is no way. We have come out of a peace process, war and the Sampur is off the table for sure. The consequences of building anther coal power plant in Sampur is a war of another magnitude that we cannot sustain politically or socially and which political leaders are going to allow you to build in Hambantota. There you have it,”

“If you say that is someone else’s problem and I don’t care, I have the technology and let someone else figure out it, that is not planning. We need to take planning as a far more serios activity which we are not doing. We need to stop thinking only about the financial cost and we need to start thinking about the economic cost,”

“When you set a plan that is going to fail, then we pay the consequences to the investors, to the economy and to everybody.”

Even though the country had electricity generation plans for years which has scheduled power plant adding for every year, there was no power plant added to national grid after the construction of Norochcholai Coal Power Plant in year 2014.

However, since the demand is electricity increasing, the country had been supplying the need through high cost emergency power bought through private power players. This has been highly criticised by the experts attached to the sector and also had become a white-collar crime questioned by the Committee on Public Enterprises (COPE). Auditor General also has pointed out that out of the capacity addition of 2000 MW during 2015-2019 less than 400MW has been added while more than 1600MW has been delayed for more than 5 years. 

“There is no point in justifying having done our job if the outcome is a failure,” Dr De Mel said.

“So, informing the public on who is responsible for what and plan considering all the PESTAL factors will be one of the solutions.”