Sri Lanka is currently facing its worst drought in 50 years. The dry weather has led to a 'power crisis' yet surprisingly without the gruelling power cuts, an often occurrence in this island nation. But yet it has left the country's state owned electricity supplier with a soaring financial bill due to excessive use of thermal power plants.
The state owned Ceylon Electricity Board (CEB) is currently battling hard to provide uninterrupted electricity to the nation. Sri Lanka depends a lot on hydropower, and the dry weather forced the CEB to operate more than 75 percent thermal based power plants. The CEB is currently facing an overdraft of nearly Rs. 17 billion, mainly due to the excessive use of oil fired plants. Under normal circumstances, Sri Lanka uses only about 30 percent thermal power, while the balance is hydropower.
The Ministry of Power and Energy has been appealing to the public to conserve electricity as much as possible, while also requesting all industries to generate their own power with private generators so that a considerable load could be taken off the country's power grid. The CEB has also agreed to pay Rs. 3/- (US 3 cents) per unit of electricity to industries who generate their own power.
The Minister of Power and Energy Karu Jayasuriya has assured the nation that during the drought there will be no dreaded power cuts, which often occurs in Sri Lanka.
In 2001, Sri Lanka experienced massive power disruptions; two successive monsoon failures were the culprit. The nation suffered eight-hour power cuts everyday. However when the government changed in December 2001, the newly appointed Minister of Power, Karu Jayasuriya, promised never to impose power cuts again.
Analysts say, in view of the current 'crisis', power cuts have to be imposed but this has not been done as the Minister is unwilling to go back on his words, mainly because of the general elections scheduled for April 2 this year. They point out that if the Minister resort to power cuts, it would mean a severe drop in votes for his party, which is led by Prime Minister Ranil Wickremesinghe.
Further, in their bid to get a considerable financial load off their backs due to the excessive use of thermal plants, the Sri Lankan government and the CEB agreed in early February to impose an electricity surcharge on all domestic, commercial and industrial sectors. However this decision was retracted due to the upcoming polls. But sources attached to the Ministry claim that there is a possibility for the newly formed government to either impose power cuts or a huge electricity surcharge, soon after the conclusion of the April elections.
The electricity peak demand in Sri Lanka is currently within 1500MW range. Authorities are trying hard to reduce the demand to around 1400MW; they say that if they are successful in this endeavour, then there would be no necessity to impose either power cuts or a surcharge.
The CEB's national power grid currently has only around 1600MW. The authorities are afraid that if a vital power plant with a capacity of about 100MW breaks down, they may have no option but to resort to power cuts; that is why they have been continuously requesting the public to conserve energy.


SAARC Workshop on Energy Cooperation

A two-day SAARC workshop held in New Delhi recently made recommendations for future studies and cooperation in various areas of energy sector among the member countries. The workshop identified areas for studies and cooperation including evaluation of energy efficiency policies and measures and implementation of energy efficiency program. This also includes institutional development, development of codes, standards and labeling for electrical appliances, energy audits and fiscal incentives. Another important recommendation has been made in respect of sharing of information in public domain through website.
Inaugurating the workshop, Indian Power Secretary RB Shahi outlined the common challenges faced by the common countries such as electrification of a large number of households, shortage of power, losses in the process, scarcity of resources and improvement in quality of services. He underlined the importance of regional cooperation in energy sector and of sharing experiences by the SAARC member countries.
The workshop deliberated upon legal and policy framework for development of power supply industry and the status of the development of electricity industries. Policy measures to attract the investment with special reference to FDI were also discussed along with the framework for tariff determination and subsidy related issue. The Transmission Grid Management System and related issues were also deliberated during the workshop.
The workshop identified main challenges faced by the SAARC countries in power sector. These include providing access to large uncovered population, high technical and commercial losses, need for improvement in quality and reliability of supply, appropriate policy framework, encouraging private sector involvement, environment friendly development, rationalization of tariff, efficient delivery of subsidy and efficient grid management.
Besides the host country, the workshop was attended by representatives of SAARC member countries -- Bangladesh, Bhutan, the Maldives, Nepal and Sri Lanka. The SAARC Secretariat was represented by its Director CAHM Wijeratne. The Workshop was organized in the backdrop of the discussions during the 2nd meeting of the SAARC Technical Committee on Energy held in Dhaka on December 7-8, 2003 in which it was agreed in principle to discuss on harmonizing with technical standards and codes of practices amongst the member countries. EP Desk


Pakistan
Pak Power Sector Failed to Perform Despite Reforms: ADB

Marshuk Ali Shah, Country Director of Asian Development Bank (ADB) in Pakistan has said the Pak power sector is one area which has failed to perform despite efforts over many years by the government to initiate reform.
He made the statement while addressing at the National Defense College on the topic “Pakistan's Economy and Donor Agencies: Advising, Financing, and Conditionalities.”
Shah said while reforms in the financial sector had given exemplary results, on the other hand, the case of the power sector is such, where despite considerable effort, the reform program is still to meet success and achieve its set goals.
He said the power sector in Pakistan is characterized historically by huge operating losses. In 2003, public sector utilities including WAPDA and KESC suffered operating losses of a total of Rs 57 billion.
“This is a large sum of money which can otherwise be re-channeled to the social sectors to increase pro-poor expenditure,” he said.
According to Shah, the ADB through its energy sector restructuring loan, and the World Bank provided support for power sector reforms to improve operational efficiency and financial viability of WAPDA and KESC and restructure the institutions. However, even after several years of the commencement of the reform program, operating losses of these institutions remain very high on account of major governance issues.
He said while WAPDA has been unbundled, the successor generation and distribution companies do not have the necessary autonomy to effectively carry out their mandate. KESC is still to be privatized, although the government has now solicited bids for its privatization. He said overall the reform effort has remained slow.
This situation, Shah said, highlights that badly needed reforms are not carried out in a timely manner, and problems have accumulated and vested interests have become entrenched. He said the donors had supported the government's commitment to the reform effort and Pakistan's development partners substantially increased their assistance to the country.
The ADB endorsed the government's reform program and provided an assistance of US$ 3.2 billion during 1999-2002 in support of the reform effort and investments for poverty reduction and economic growth.
A further $ 871 million were committed in lending assistance in 2003, and the ADB program for the next three years to 2007 envisages a level of assistance of $ 2.7 billion.
Under its assistance program, Shah said ADB in recent years supported the government's reform effort through 10 major interventions at macro level, in the areas of capital and financial markets; trade and industry; micro-finance; energy; agriculture; access to justice, program support for devolution and decentralization; rural finance; and SME development.
Touching upon the word 'conditionalities,' he said considerable controversy has been generated in Pakistan on the use of such measures or “conditionalities” in the assistance operations of donors.
“However, such measures are included not for the benefit of institutions such as ADB, but in the interest of improving efficiency and promoting progress,” he said.


Pak Wapda Plans to Reduce Power Losses

The Pak Water and Power Development Authority (Wapda) has decided to undertake an extensive Rs 4.1 billion three-year program to cut power and energy losses in the country.
According to official sources, Wapda has submitted a new "distribution rehabilitation project" for approval to the Planning Commission. The primary objective of the project is to reduce system's technical losses, resulting from power failure in the distribution conductors and equipment including losses due to additional current flowing in the system on account of poor power factor of customer loads. Wapda's distribution and line losses are still over 24 percent while KESC's such losses have been estimated at 40 percent.
The Pak Planning Commission was informed that the "distribution rehabilitation measures" would aim at energy loss reduction, improvement in quality of power supply, improvement in reliability, improvement in safety, transmission and distribution capacity, improve customer service and reduce complaints, reduce cost of operation and maintenance and improve length of life of equipment.
Wapda informed the federal government authorities that a three-year program would provide adequate distribution facilities in the system to fulfill the targets fixed in the industrial, agricultural and social sectors of the economy. This can be achieved by increasing transmission and distribution capability and that the considerable additional power can be released by rehabilitating the existing power state of the distribution system. The release of capacity will decrease in feeding the distribution system technical losses.
The secondary objectives of the program is the reduction of administrative energy losses (pilferage of electricity), introduction of sound planning and engineering techniques for technical energy loss reduction, development of necessary data base for distribution of load forecasting, analysis, planning and engineering, improve operation and maintenance of the distribution system and improve customer service function.
The reduction in losses will release additional power to the distribution system. Simultaneously the different rehabilitation measures will contribute in improving the distribution system supply voltage, continuity of supply, system stability reliability and safety, which are the mandatory responsible of the power utility.
In order to identify the potential of technical losses, which yield the best return on capital investment, it is necessary to prepare a database of technical losses, occurring on all feeders.


Pak Emerges as Investment Ground

Direct and keen participation of local and international companies in the recently held Second Pakistan Oil Gas Energy Exhibition, POGEE-2004, was a clear sign that Pakistan is emerging as prolific investment ground for the energy sector players.
This in turn, experts said, would result in better business prospects for their products and services in onshore and offshore exploration, development and production.
Officials from Motor Sich and Progress Design Bureau, two engine and power generation manufacturing companies from Ukraine said that it was their first-ever participation in any fair in Pakistan. They expected to obtain lucrative business as a result of the expo.
Another company from Russia, Stroytransgaz JSC expressed deep satisfaction over its contacts with the government authorities at the show and said that they expected to work in gas sector in collaboration with the government and private sector organizations.
More than 100 companies from 28 countries are participating at POGEE-2004. The exhibition was held in Karachi with promising opportunities for lucrative investment in the highly productive and thinly competitive fields and basins of Pakistan's oil and gas sector.
The third exhibition of POGEE sequel has been scheduled in 2005, which is expected to draw even greater turnout from international participants, the organizers said.