Norochcholai Coal Power Plant - In retrospect - Treading the wrong path

I believe we have reached the conclusion that coal power was a more suitable option in electricity generation for Sri Lanka through the previous article which discussed the fact comprehensively. This particular article follows it up with the discussion of initial groundwork of the Norochcholai coal power plant and irreparable mistakes occurred along the way. The sole intention is to narrate the history of the power plant, explaining the episodes as they were, preventing any political influence.

The necessity of a coal power plant

Let me take you to the power generation situation in Sri Lanka exactly 10 years back, year 1993, and compare it with the situation in year 2010.

(Source: Sri Lanka Energy Balance 2010)

It is evident that in 1993, 95% of total generation was made of hydropower and that portion has dropped to 53% by 2010, while thermal generation has increased from 5% in 1993 to 47% in 2010. This points us to the fact that by early 1990’s almost all the potential large hydro resources in the country has been utilized to produce electricity and further increase in demand caused the introduction of thermal generation in large scale. Further, to maintain the reliability and stability in an ever growing power system, thermal generation is essential. Walking back in our memory lane to the previous article, we concluded that coal power is one of the best options to maintain such status.

Funding Opportunities and Finding a site

The relevant authorities at that time have also agreed to the idea for a coal power plant as a general plan has materialized and the search for funding opportunities has begun.

The most prominent funding opportunity for the proposed coal fired power plant was provided by the Japan Bank for International Cooperation (JBIC). By early 1990’s JBIC had agreed to fund a feasibility study on the development of a coal fired power plant and fund the subsequent construction of the plant. Four potential sites for the power plant have been identified at that time, three in Puttalam area and one in Gampaha District. Trincomalee had also been a potential site, but it was rejected due to the security situation prevailed in that area. The whole southern coastal belt was rejected by then government under the convincement that building a coal power plant would cause a detrimental impact on the environment.

After studying the merits and demerits of the possible sites selected, it was decided that Narakkalli in Puttalam area as the most suitable site for the plant, mainly due to the adequate coastal area available and less density of population in that area. After official requests sent by the Sri Lankan government to Japan, feasibility study on the plant started in 1995 under the funding from JBIC, and during the study the site was moved further southwards. Even though the original name of the area is Narakkalli, the site went by the name of “Norochcholai” as it was the name of the nearby town.

Protests against project and setbacks triggered from them

The point where things started going wrong occurred in 1997 where the whole project and the ongoing study became highly politicized due to the constant upheavals from the pressure groups. The first considerable resistance on the basis of environmental impacts and resettlement issues, came from the Catholic clergy of the area with the backing of the people from the area and especially the politicians. Politicians were more concerned over there vote base of the area rather than the actual need of the whole country which lead to the situation where between 1997 and 2004, the project would have been approved by the political regime several times, and also would have been “cancelled” or “suspended” several times by the same regime, typically when elections were approaching.

Consequences of delayed implementation of the plant

Amidst this political tug of war, it was the electricity customers in the country who suffered as the government was forced to build 10 oil fired power plants within the time period in which the construction of Norochcholai power plant had been delayed. Political schemes and personal benefits outweighed the actual need of the country as politicians and powerful personnel nested in elevated positions in the hierarchy constantly backed up the construction of the oil fired power plants stating numerous justifications while the coal power plant project was shunned aside hoodwinking the general public with stories of deceit.

As a result of this the electricity customers suffered day by day in the face of ever rising price of crude oil which increased their electricity bills regularly, while the more cost effective and sustainable option of the coal power plant was neglected. This is evident clearly when the crude oil prices and coal prices in that time frame are considered, as the crude oil prices increased dramatically, the coal prices were relatively stable.

Commissioning of the plant

While general electricity customers suffered from the poor decision making triggered by political schemes, the whole power system of the country was setback several years as the coal power plant was to produce electricity from 2004, although luckily in 2004 the project was resurfaced under a new government and people with clear vision up in the hierarchy. But unfortunately at that time funding from Japan was not possible due to various reasons hence government turned to China and a deal was struck to build the plant under Chinese funding which was to produce electricity from 2011, almost exactly 7 years behind the schedule.

Up to now the background of the Norochcholai power plant was discussed and more details of the actual project will be discussed in the next article.

(This article is based on “Norochcholai Power plant: A postscript” by Dr Tilak Siyambalapitiya which was published in The Sunday Times on Sunday March 20, 2011 http://sundaytimes.lk/110320/BusinessTimes/bt09.html)

Article By: Asith Kaushalya

Posted in: Power System