By P.K.Balachandran

The governments of Sri Lanka and India will begin discussions on replacing coal by Liquefied Natural Gas (LNG) in the 500 MW Indo-Lankan power plant to be set up at Sampoor in Eastern Sri Lanka, the Lankan Power Secretary, Dr.Suren Batagoda, told Express on Tuesday.

“ At the moment, the changeover to LNG is only an idea to be discussed. No decision has yet been taken to replace coal by LNG,” Batagoda added in clarification.

The Lankan High Commissioner in India, Esala Weerakoon, confirmed to Express that President Maithripala Sirisena had requested Indian Prime Minister Narendra Modi to replace coal by LNG in view of objections from environmentalists. Weerakoon also said and that, as per the assurance of the Indian PM, his officials will discuss the changeover with their Lankan counterparts.

Changeover Not Easy

Lankan Power Secretary Batagoda said that the matter would have to be looked at from various angles and that the views of the Joint Venture Company, Trincomalee Power Company Ltd. (TPCL), which had been set up to build and run the plant, would have to be taken into account.

“One of the most crucial aspects to be considered is the fact that much time and money has already been spent in doing the ground work for the coal fired power plant in the last three years, Batagoda pointed out.

The Power Purchase Agreement had been signed. An environmental study was made and approval on environmental safety was secured. The global tender has been finalized and is to be floated in June. All this will have to be set aside and a beginning has to be made from scratch, the Lankan official pointed out.

A source in the Indian power sector said that a terminal has to be built to receive imported LNG and that cannot be in Eastern Sri Lanka but on the Western coast because the source of LNG is in West Asia. The power plant will then have to be shifted to the Western coast.

Power from LNG will also be costlier as compared to coal. Will the Lankan consumer be willing to pay more? The cost of LNG will also vary with the price of oil in the international market. Can the Lankan consumer be made to bear the rise in prices? If not, what would be cost of subsidizing the utility, are some of the questions to be answered.

Setting up a plant using LNG will take time as the entire process of setting up a plant will have to be gone through again, from scratch. The idea of having a plant at Sampoor was first mooted in 2006 but the first agreements were signed only in 2013 after tough negotiations plagued by doubts of all kinds, technical as well financial. This indicates that any future negotiations will not be a smooth ride.

However, if the government feels that it has to respond to the objections of the local environmental groups and the Tamil National Alliance, coal will have to be replaced by LNG irrespective of the cost and other difficulties, Batagoda said.

Though the Lankan government is divided between the anti-coal lobby headed by President Sirisena and the pro-coal lobby led by Prime Minister Ranil Wickremesinghe, it is the President’s view which will prevail because Lanka has a Presidential form of government.

NTPC Willing

The National Thermal Power Corporation (NTPC), which is the Indian partner in the TPCL Joint Venture, prefers a coal plant, but it is willing to changeover to LNG if the two governments want it and has the experience to set up an LNG plant. The NTPC has built LNG driven plants generating over 6000 MWs in India.

Courtesy:New Indian Express