The Environment Appeal Tribunal has at long last delivered its findings on the case of C.T. Power against the Minister of Environment not to grant an EIA license for the construction and operation of a 2X55 MW coal fired power station at Pointe-aux-Caves.
The determination of the Tribunal is assorted with a slew of additional conditions designed to address the concerns of the Ministry of Environment. In reply to Parliamentary Question B 500 on 10th July, the Minister of Public Utilities indicated that as a result of the possible coming into operation of C.T. Power, ‘‘CEB will have to review its power sector expansion plan to cater for this project.’’ It is essential that the debate on the expansion plan of our electricity generation capacity should henceforth be refocused on its economics making abstraction of social and cultural lobbies and other pressure groups as they are irrelevant to the issues at stake.
In a previous piece (Coal Power : the politics of Indecision), I argued that the current profile of the Central Electricity Board (CEB) production and purchases of electricity for its base and semi base load is skewed asymmetrically in favour of heavy fuel oil. The marginal cost of a unit of electricity (kwh) produced from coal is Rs 2.30, compared to Rs 5.00 from heavy fuel oil. As a result, the five IndependentPower Producers export electricity with all costs taken into account at an average price of Rs 3.65. Belle Vue Power plant, as announced by the Minister of Public Utilities, has reduced its price as per its Power Purchase Agreement by 20 % as from 1st July 2012, allowing a yearly saving of Rs 200 million to CEB. If CEB had generated base load requirement from coal, it could have saved Rs 1.5 billion last year. Over 5 years, it could have hypothetically economized enough to build its own coal power plant!
The uncertainty surrounding the C.T. Power project over the past 5 years has resulted in CEB investing in 6X15MW heavy fuel oil run engines at Fort Victoria station to meet its demand growth in both base and semi base load. The verdict of the Environment Appeal Tribunal places our policy makers in an uncomfortable dilemma.
Government, through the Ministry of Finance, has issued a request for Expressionof Interests for the recruitment of a Transactional Advisor (TA) for a 2X50 MW coal power plant. The selected TA will advise government on the preparation of the tender documents for the launching of a Request For Proposals by CEB for the construction, commissioning and operation of the power plant.
The lead time for the conclusion of a Purchasing Power Agreement with the successful bidder could be at least 9 months. This time constraint could press CEB to invest in a new 2X15 MW power plant at St Louis to meet its capacity demand for the horizon 2015. The demand could have been met by one 50 MW unit of the coal power plant, had the current tendering procedure for the appointment of the TA been initiated last year.
Government indecision and the delay in determining the appeal of the C.T. Power case confront CEB with a difficult choice: either to proceed with C.T. Power, as the Tribunal has granted the appellant an EIA licence, or wait for the successful conclusion of the present exercise initiated by the Ministry of Finance, but carry on with the installation of another 2X15MW engines at St-Louis.