Colombo, September 16 (NIA): India, which was to partner the now abandoned coal-fired power project in Sampur in Eastern Sri Lanka, has told the Sri Lankan authorities that while it can help put up a Liquefied Natural Gas (LNG )-fired plant as desired by Sri Lanka, it will be in Sri Lanka’s interest to think through the gamut of issues relating to a switch over to LNG.
This is what the Indians will convey to their Sri Lankan counterparts, at a meeting of the Joint Working Group (JWG) which is likely to be held in October either here or in New Delhi.
When President Maithripal Sirisena met Indian Prime Minister Narendra Modi at Ujjain in Central India on the sidelines of a religious function in May, Sirisena requested Modi to call off the coal-fired power project citing environmental issues. Modi did not give a definitive answer but said that he would ask his officials to go into the matter.
Subsequently, a Joint Working Group (JWG) was set up for bilateral discussions on the matter. But the JWG has not met to date. But earlier this week, the Sri Lankan government told the Supreme Court in a case filed by environmentalists, that it has decided not to go for a coal-fired plant in Sampur.
This unilateral decision shook the Indians a bit. However, they have been telling the Sri Lankans that they are ready to help set up an LNG-fired plant despite reservations about LNG’s suitability for Sri Lanka. These reservations would be conveyed to the Sri Lanka at the proposed meeting of the JWG.
But keen to be a player in the energy field in Sri Lanka, the Indians had sent a team from the public sector PetronetLNG Ltd.,to discuss the witch over to LNG with the Sri Lankans. PetronetLNG is a major player in LNG in India and it can supply Sri Lanka from its terminal in Kochi.
But an issue that the Sri Lankans will have to think deeply about is that LNG has to be imported and stored in terminals and conveyed to the power plant through a pipelines. If LNG is to be brought from Qatar or Kochi, Kerawelapitiya in the Western Province would be a better location for the power plant rather than Sampur in the Eastern Province.
It is also felt that to set up one terminal for one plant will not be economical. Sri Lanka would therefore have to have a larger plan to use LNG, not only in power plants, but in industries and in households to gain from the economy of scale.
Then there is the question price fluctuations. Today LNG prices are low, but there is no guarantee that it will always be so as oil prices fluctuate greatly. Coal, on the other hand, is guaranteed to be cheaper and world production, which had gone down, is picking up.
Setting up an LNG fired plant will also take time. According to the Indian Power Ministry and the National Thermal Power Corporation, it could take anywhere from three to seven years to set up a plant with the all necessary agreements.
No Clarity In Policy Yet
But Sri Lanka is likely to face power shortage from 2018 onwards if some power plants are not put up quickly. According to power rights activist, Bandula Chandrasekara, as it is, there is an 8 percent rise in the demand annually. This will gallop if the multi-billion dollar Colombo Financial City, the Western Province Megapolis, the Hambantota Economic Zone and the Sampur Economic Zone projects come up.
Nervous about imposing power cuts, Ceylon Electricity Board engineers are urging the government to stick to coal in the Sampur project and have a mix of coal and other fuels in future projects.
The government itself is divided, with one section dead set against coal and the other willing to go for a mix of fuels including coal. The Minister of Power, Ranjith Siymbalapitiya, told the media on Thursday, that coal would remain an option. According to the Public Utilities Commission, Sri Lanka’s long time power plans would have to be finalized by April 2017 if grievous shortages are to be avoided.