Govt backtracks on anti-coal policy Two 600MW coal plants coming up

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By 2017-12-17

By Ishara Gamage

The Government has decided to introduce a less environmental impact 'clean coal technology' to construct a new 600MW coal power plant in the area of the Lakvijaya Power Station in Norochcholai and another 600MW high efficient coal power plant in the Foul Point area in Trincomalee, a top government official told Ceylon FT.

"The relevant proposal has already been submitted to the Government for approval but final approval might be delayed due to objections made by a Minister", he said. The official said there was a government policy to maintain a proper electricity generation capacity mix with 30% from Natural Gas, 30% from coal, 25% from hydro and 15% from oil. "Despite the protest, it is vital to include environmentally-friendly clean coal power in the mix and it will reduce electricity generation costs", he said.

However, anti coal energy experts in Sri Lanka have warned against these projects and said 'Clean coal' was the coal industry's marketing term, designed to mislead the public into believing that coal can be clean. They also said the proposed energy mix contradicts electricity self-sufficiency targets by 2030.

"Coal is never going to be clean, compared to other forms of energy such as renewable energy and gas. The phrase 'Clean Coal' refers to pollutant reducing technologies and Carbon Capture and Sequestration (CCS) technology. Even though the amount of pollutants is reduced, it still pollutes and this pollution creates significant problems for countries such as Sri Lanka due to its geography and wind patterns," they told Ceylon FT.

According to them, Sri Lanka's present off-peak (night) electricity demand is about 1,000 MW and the Norochcholai plant has to be de-loaded to operate during that period, resulting in lower efficiency and higher costs.
"If such 1,200MW new coal plants are built, another pump storage hydro plant will also have to be built to accommodate them during off-peak time (to store excess generation)," they told to Ceylon FT.

They also said that it will further increase costs. According to them, the annual cost increase due to building a 1,200 MW coal plants instead of Natural Gas Power plants would be Rs 30.3 Billion.
"Nonetheless, recent tender for 300 MW Natural Gas fired combine cycle plant (which are flexible in operation than coal plants) costs Rs 14.99/kWh while the Norochcholai coal plants costs Rs 18.60/kWh, which is higher even without the Pumped Storage Hydro plant cost", they said.

However, the government statement as seen by Ceylon FT, relating to proposed coal plants stated that the Government will assure that high priority will be given to environmental security in electricity generation.
It said it is important to maintain an energy mix of firm energy sources to uplift the economy of the country and to ensure energy security.

"Further it is necessary for Sri Lanka to maintain the cost of electricity for one unit of the GDP at a lower level to compete with the world economy. Therefore it is essential to diversify electricity generation to the maximum possibility to maintain the cost of electricity generation at a possible low level and to ensure national energy security", it stated.

It also stated that adopting the strategic utilization of all energy sources that can be practically developed for electricity generation as a policy and utilization of the petroleum sources such as natural gas, coal and fuel oil as well as utilization of renewable energy sources such as wind power solar power biomass, geo thermal energy wave power and solid waste and atomic energy as and when required for the generation of electricity as energy sources are essential.

According to experts, 'Clean coal' begins with very high efficient plants, reaching over 45% efficiency, such as Ultra-Supercritical (USC) plants and Advanced Ultra Supercritical plants (A-USC). "Assuming a 600 MW USC plant, capital costs would be approx USD 2.1 Billion even without CCS. Similar sized Natural Gas based power plant would cost approx USD 660 Million", they said.
The current generation plan approved by the Public Utilities Commission of Sri Lanka (PUCSL) after detailed review and public consultation does not have these coal power plants. "The Government overriding the process will create additional uncertainty, on top of flip-flopping on the coal decision taken in 2016. This will erode public trust along with the trust of investors and business community", they said.

According to them, Foul Point neighbours, Shell Bay one of the most unique ecosystems of Sri Lanka home to twelve types of giant clams (not found elsewhere in Sri Lanka) and also species of unknown genetic diversity. It is not possible to build a coal power plant in Foul Point without destroying Shell Bay, experts say.

"Norochcholai is already highly polluted – land and well water, through coal dust and fly ash, marine eco system through water withdrawal, hot water and pollutant discharge and coal spillage. Even if pollution can be reduced (costly retrofits), it will take decades for it to recover. Adding additional pollution to the area will compound the problem", they said.

People in Sampur launched a sustained protest against the previous power plant, which created condemnation of the coal power plant among local politicians. People in Norachcholai are heavily affected from the existing power plant. Approval of these proposed projects might create protests and anger against the Government (and promises given) close to an election, is the view held by many.



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