By Eng Parakrama Jayasinghe
It was in February of this year that I pointed out that the Sri Lankan energy sector is a headless chicken.
Looking at the long queues for all forms of energy, gasoline, diesel, kerosene and LPG, where citizens waste their lives and in some cases lose their lives, it is quite clear that the situation has even worsened since then. When the above article was written, there were no such queues except for the shortage of LPG. But the writing was on the wall, leading Sri Lanka to the current abyss we had never known before.
The tragedy being that even now there is absolutely no solution offered by the government except going all over the world begging for dollars and oil. In these circumstances, it is very important to look back on past actions, not on the years and decades, when the seeds of this tragedy were sown, but on the completely senseless decisions of recent months, which have totally ruined the Sri Lankan economy. as well as the social fabric covering the full range of citizens. The current actions of the government, which is limited to looking for ways to survive day to day, inspire no confidence that Sri Lanka can emerge from this ruinous mess if ever.
What will happen tomorrow?
I raised this issue in February of this year.
Quote “Against this backdrop, people are appalled to witness the unfolding drama, ministers blaming each other and the Central Bank insisting that there is no problem releasing the dollars needed to import the oil. The fact remains that there have already been power cuts. It is a question of when rather than if there would be more power cuts. A lot of hope rests on the restart of the generation with the third unit at Norochcholai. There is no guarantee on how long the three units will operate given the past history of this power plant, which brings us back to square one.” quote
The reality as it turned out was much worse. Not only will two of the coal-fired plants be out of service one after the other for approximately three months, but we are eager to know to what extent we can rely on the two units in operation to supply us with electricity without falling outage, even at the current huge cost. The onset of monsoons helped alleviate the problem to some extent until the first of the units was closed for maintenance. So far, there have been happy days in May when Sri Lanka has been able to do without private oil-based power plants and minimal use of CEB-owned ones.
Unfortunately, those days were minimal and we reverted to the disastrous oil-based generation, as shown in the two charts below, downloaded from the CEB web portal. (See figures 1 and 2)
This brings me to the point at issue. What has caused the current impossible situation regarding transport fuels, leaving aside for a minute the question of LPG and kerosene?
The main problem is of course the indiscriminate reliance on imported fossil fuels for our energy needs. While there were no viable alternatives for transportation fuels in the past, this is certainly not the case in the case of power generation. However, this has been the subject of many previous articles both mine and many other well-meaning people of all skill levels. What is needed now is to examine past immediate and ill-conceived decisions and actions and hopefully try to avoid their continuation, if we are to regain some semblance of order in the energy sector of the transport, which is paralyzing the whole country.
After suffering repeated economic disasters caused by the CEB year after year, by manipulating the excessive dependence on oil-based energy, during the dry months of January to April, they literally put the country on its feet. knees this year. This is by siphoning off what little oil is available as well as the dollars spent to import it during those months, as shown below. (See table)
*Estimated based on 0.28 litres/kWh
** Loads of 6000 liters
Assessed based on CEB statistics
The number of oil barrel shipments issued by the CCP is mentioned to be around 800 per day, in various press conferences. We see that in some months, the CEB has mopped up more than 75% of this scarce resource, just to pretend that it is capable of minimizing power cuts on its own initiative. Even if the quantity of oil partly includes heating oil and heavy fuel oil, they also consume dollars which could have been used for the import of essential diesel, particularly for transport.
While the ministers and the government in general are also to blame for this situation, leaving the decision-making to the CEB, which has absolutely no qualms about driving the country into bankruptcy, they have already done so by registering a lost over Rs. One trillion over the past decade and are on track to add another trillion this year and next alone. The net effect has been the disaster we are currently experiencing. Under these circumstances, it is inevitable that the CEB needs immediate restructuring with strict liability conditions and adequate competition which has proven to be of immeasurable value in the telecommunications sector. The worst aspect of the current total insane wastefulness is that it mainly impacts the balance of payments due to the immense amount spent on importing oil and coal for power generation. Without this lopsided decision to try to keep the lights on, without any consideration of the significant impact it would have on the transport sector, the current crisis would have been much milder.
This once again underscores the point I made in my last article that Sri Lanka’s energy sector is really a ‘headless chicken’ without any vision or direction and, what is the most damaging, without liability. No one seems to be able to critically assess which sectors should be prioritized for the allocation of dwindling foreign exchange. It only takes a minimum of intelligence to decide that priority should go to sectors that have a chance of recovering the currencies spent. Obviously, even this level of intelligence cannot be expected of our leaders, as is also seen in the management of all other sectors. Under these conditions, it would be exaggerated to expect that they even looked at the electricity consumption by the different sectors, as shown below.
Fig 3. Share of electricity consumption between sectors (CEB statistics)
One would expect that only a portion of industrial sector consumption and perhaps a fraction of bulk sales would meet these criteria.
Household + General sectors consuming more than 60% of electricity do not contribute directly to the economy or export earnings
But the interest of the government may have been to provide enlightenment at all costs to other sectors out of political expediency, ignoring the havoc it would create, had they even thought about it.
With that in mind, it was a breath of fresh air to note that Sri Lanka was successful even for a few days with very little oil-based production in May. However, this euphoria was short-lived and as the second chart shows, where the generation reverted to unfathomable and insane behavior, with the oil-based generation contributing over 33% of the total. The damage is compounded by the fact that the cost of generation using oil and coal has reached such high levels that any sane admiration would immediately shut down these plants and look for any sustainable way to close the gap.
Luckily for Sri Lanka, we have ample means to do this, which does not result in a continuous drain of dollars and enjoys many other economic benefits. More details of these options were submitted to officials who would hopefully inform their political masters of the absence of any other alternative.
On the other hand, depriving the transport sector of the only fuels on which it is 100% dependent is completely inexcusable and has already caused irreversible damage. This failure seems to be the most damaging cause of the total loss of trust in government by all segments of the population, as evidenced by a recent survey by a research group.
The purpose of this article is to draw the attention of the new Minister for Electricity and Energy, who fortunately has responsibility for the supply of electricity as well as the supply of transport fuels, to examine critically the above situation and trying to stop and hopefully turn the tide. disaster, as soon as possible and save what little we can of the economy and the well-being of the population.
Thus, the following realities are evident and we hope the Minister will make the urgent choices based on them, however difficult they may be if we are to see a resolution to the transportation fuel crisis.
The limited oil supplies should be directed to the transport sector as a priority, the absence of which has a direct negative impact on the production as well as on the transport of essential goods directly affecting social life and well-being.
The use of 82% of oil by private vehicles is unsustainable
Buses and trains carrying 50% of passengers using only 5% oil must be supplied without shortage.
Clear priority should be given to industries and other sectors that earn foreign exchange
CEB engineers were kind enough to warn us that there will be more hours of power cuts if enough diesel and fuel oil are supplied so that they can add a few billion more to the loss. We can only hope that they will condescend to making a living at least now, by facilitating the accelerated development of renewable energy sources for power generation, instead of coming up with lame excuses.
May the minister have the courage to say that Sri Lanka will no longer operate oil-fired power stations, except perhaps those that can run on fuel oil and naphtha, produced by our own refinery, for which the Crude oil supply should be treated as a priority for several reasons.
Say no to LPG!
In the total energy scenario, or should I say today ‘polite’ culture, the LPG queues take on much more importance than the relative percentage of the energy mix. Being naturally so close to daily cooking energy needs, emotions run high. Fortunately, a ready alternative is available and has been discussed in a different article accessible at https://www.bioenergysrilanka.lk/an-opportunity-behind-the-lpg-crisis/ It only requires minimal intervention from the State by promoting the offer alternatives to long queues without any guarantee of receiving a bottle of LPG.