Public Sector

CEB, Corruption and Renewable Energy -

The politicians & their policies are responsible for most of the hardships we face today. But when it comes to the power crisis, surprisingly the politicians had good policies but failed to implement them due to bureaucracy and unbelievable level of corruption at CEB.

CEB Corruption

11 June, 2022 | 03:06 a.m. Team

The politicians & their policies are responsible for most of the hardships we face today. But when it comes to the power crisis, surprisingly the politicians had good policies but failed to implement them due to bureaucracy and unbelievable level of corruption at CEB.

The ongoing power cuts are not a result of a capacity shortage, In fact, right now we have idling thermal power capacity because of dollar unavailability. The problem is having too much capacity in the wrong types of powerplants and too little in the right types.

It's an open secret that the CEB is not fond of renewable energy. They like coal, and love diesel but hate NCPE. (Non-Convertable Renewable Energy - solar, mini-hydro, biomass, wind). Major Hydro is out of the equation because there are no more viable steams to build them.

Despite being clean and cheap, solar and wind bring their own problems to the grid, The top issue is their unreliability. Large fluctuations make it harder to balance the grid and may require 6x -10x expensive thermal oil plants to maintain the balance. Ultimately this means caretaking renewable energy could become more expensive than generating electricity from Coal or LNG (Liquefied natural gas).

But, Sri Lanka are not there yet. Sri Lanka still has plenty of room for Solar and Wind. We only have around 7% of RE in the grid (excluding major hydro). We are far from the critical limit that could possibly considerably impact the grid from the fluctuating nature of renewable sources.

CEB wants to convince people that the unreliable nature of RE is the reason why they oppose it. But The real reason is, They can't maintain their infamous tri-mafias mini-hydro, coal & diesel when there is an abundance of REpower in the system. Mini hydro has become a family business for CEB Engineers. The proposal of others won’t get accepted even though the offered rate was lower. The tender process of Coal purchases is demonstrably corrupt. But the diesel mafia is the biggest one of them all.

The commissions that they get from the emergency power purchase business must be unbelievably high when you consider the profit Independent Power Plants make due to CEB allowing Emergency power purchases (EPP) at 2x-3x times the average tariff.

The best example is the ACE Embilipitiya. In COPE it was revealed that Aiken Spence, the company that owns the Ace Embilipitiya plant (1 of 3 Individual Power Plants in SL at the time) has posted a profit of Rs. ~1.1 BILLION in 2016/17 through the sale of electricity to CEB.

EPPs are going on for ages, In the early 2000's CEB allegedly drained the reservoirs by systematically releasing more water than it needs to for agriculture in coordination with the Water Management Sec. (consist of CEB, Water B, Irrigation & Mahaweli.)

In 2018 CEB handed over a 3-year contract to ACE power without cabinet approval. They even didn't follow the tender process. When the Public Utilities Commission of Sri Lanka (PUCSL) was taking steps to put a stop to these corrupt activities the Engineers Union of the CEB demanded that officials of the commission be changed.

The tender process associated with IPP is just a formality anyway. There are only 5 IPPs in SL, Allegedly the owners of these power plants discuss among themselves and come up with a sky-high price per unit and CEB accepts it. In 2018 CEB purchases a unit of electricity at Rs. 28 and sold it for 16.

This Emergency Power purchase business is corrupt to the core, According to  2017 figures, IPPs provided approximately 670 GWh of energy to the grid annually. The CEB's wish is to continue purchasing the above amount or possibly more as EPP in the coming years.

There won't be major hydro plants anymore, Japanese LNG plants were chased away. (Until Basil sold it to New Fortness in a midnight deal), The only obstacle they faced now is the growing Renewable energy industry.

 In the last two years, while purchasing emergency power at a rate of over Rs.40 per unit, the CEB has blocked over 4,000 MW of new NCRE: Non-conventional Renewable Energy (mini-hydro, wind, solar & biomass) projects.

 Had those projects been approved by CEB and built, they could have supplied electricity at the prevailing Rs.16.07 to 25.09 per kWh tariff, far less than the cost of diesel electricity today.

 Rooftop solar is another industry that CEB attempted to kill, Initially, they ignore the ADB's $ 50m loan as long as possible, and then they start to delay the approvals, But even then Rooftop solar has risen to the point where they are starting to supply 500MW to the grid.

Corrupt Engineers suddenly come to realise that If the trend continues this is going to be a threat to their emergency power purchase business because CEB might not need to purchase emergency power anymore in the dry season.

 So They started the "Gamata Balagarayak" project claiming they are going to build medium-scale solar plants by attracting investors using a tender mechanism. They reserve 8000 transformers for the project, effectively blocking thousands of customers who had plans to invest in a rooftop solar system.

 CEB floated 800 tenders but it was a failure, forcing CEB to extend deadlines & revise the ceiling prices multiple times. Even then CEB didn’t receive bids for even 25% of the transformers.

 It may have been done intentionally because the offered ceiling prices were abysmal. In some cases, the offered price was Rs. 6. per unit.  This 8000 transformer project has blocked the customers who had a dream of connecting rooftop solar to the grid.

PUCSL says the country's economy loses Rs. 156 per unit due to the ongoing power cuts. It could be higher than that, A 2004 research suggests on avg, losses to the economy due to planned and unplanned outages were US$ 0.66 and US$ 1.08 (Rs. 236 & 387 today) per kWh in 2001.

It’s hard to fathom the unbelievable level of corruption & bureaucracy at CEB. Despite the popular belief about RMV, Customs, and the Police, CEB could be the most corrupt institution in the country considering the impact they are having in each and every sector.



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