CEYLON ELECTRICITY BOARD LONG TERM GENERATION EXPANSION PLAN 2018-2037 (DRAFT) Transmission and Generation Planning Branch Transmission Division Ceylon Electricity Board Sri Lanka April 2017 CEYLON ELECTRICITY BOARD LONG TERM GENERATION EXPANSION PLAN 2018-2037 (DRAFT) Transmission and Generation Planning Branch Transmission Division Ceylon Electricity Board Sri Lanka April 2017 Long Term Generation Expansion Planning Studies 2018- 2037 Compiled and prepared by The Generation Planning Unit Transmission and Generation Planning Branch Ceylon Electricity Board, Sri Lanka Long-term generation expansion planning studies are carried out every two years by the Transmission & Generation Planning Branch of the Ceylon Electricity Board, Sri Lanka and this report is a biennial publication based on the results of the latest expansion planning studies. The data used in this study and the results of the study, which are published in this report, are intended purely for this purpose. Price Rs. 4000.00 © Ceylon Electricity Board, Sri Lanka, 2017 Note: Extracts from this book should not be reproduced without the approval of General Manager – CEB Foreword The Report on ‘Long Term Generation Expansion Planning Studies 2018-2037’, presents the results of the latest expansion planning studies conducted by the Transmission and Generation Planning Branch of the Ceylon Electricity Board for the planning period 2018-2037, and replaces the Long Term Generation Expansion Plan 2015-2034. This report, gives a comprehensive view of the existing generating system, future electricity demand and future power generation options in addition to the expansion study results. The latest available data were used in the study. The Planning Team wishes to express their gratitude to all those who have assisted in preparing the report. We would welcome suggestions, comments and criticism for the improvement of this publication. April 2017. Transmission and Generation Planning Branch Letters: 5th Floor, Head Office Bldg. Tr. and Generation Planning Branch Ceylon Electricity Board 5th Floor, Ceylon Electricity Board Sir Chittampalam A. Gardinar Mw. P.O. Box 540 Colombo 02 Colombo, Sri Lanka e-mail : [email protected] Tel : +94-11-2329812 Fax : +94-11-2434866 Prepared by: Reviewed by: M.B.S Samarasekara P.L.G. Kariyawasam Chief Engineer (Generation Planning and Design) Additional General Manager (Transmission) J Nanthakumar Electrical Engineers Deputy General Manager (Transmission & Generation Planning) T.L.B Attanayaka R.B Wijekoon D.C Hapuarachchi M.D.V Fernando K.H.A Kaushalya K.A.M.N.Pathiratne Any clarifications sought or request for copies of the report should be sent to the Deputy General Manager (Transmission and Generation Planning) at the address above. CONTENT Page Contents i Annexes v List of Tables vi List of Figures viii Acronyms x Executive Summary E-1 1 Introduction 1-1 1.1 Background 1-1 1.2 The Economy 1-1 1.2.1 Electricity and Economy 1-2 1.2.2 Economic Projections 1-2 1.3 Energy Sector 1-3 1.3.1 Energy Supply 1-3 1.3.2 Energy Demand 1-4 1.3.3 Emissions From Energy Sector 1-5 1.4 Electricity Sector 1-6 1.4.1 Ease of Doing Business 1-6 1.4.2 Access to electricity 1-7 1.4.3 Electricity Consumption 1-8 1.4.4 Capacity and Demand 1-9 1.4.5 Generation 1-11 1.5 Planning Process 1-13 1.6 Objectives 1-13 1.7 Organization of the Report 1-13 2. The Existing and Committed Generating System 2-1 2.1 Hydro and Other Renewable Power Generation 2-1 2.1.1 CEB Owned Hydro and Other Renewable Power Plants 2-1 2.1.2 Other Renewable Power Plants Owned by IPPs 2-5 2.1.3 Capability of Existing Hydropower Plants 2-5 2.2 Thermal Generation 2-7 2.2.1 CEB Thermal Plants 2-7 2.2.2 Independent Power Producers (IPPs) 2-10 3 Electricity Demand: Past and the Forecast 3-1 3.1 Past Demand 3-1 3.2 Government Policies and Future Major Developments 3-3 3.2.1 Government Policies 3-3 3.2.2 Future Major Developments 3-3 3.3 Demand Forecasting Methodology 3-4 3.3.1 Medium Term Demand Forecast (2017-2020) 3-4 3.3.2 Long Term Demand Forecast (2021-2042) 3-5 3.4 Base Demand Forecast 3-9 3.5 Development of END USER Model (MAED) for Load Projection 3-10 3.6 Demand Forecast Scenarios 3-12 Page i 3.7 Comparison with Past Forecasts 3-14 3.8 Electricity Demand Reduction and Demand Side Management 3-15 4 Thermal Power Generation Options for Future Expansions 4-1 4.1 Thermal Options 4-1 4.1.1 Available Studies for Thermal Plants 4-1 4.1.2 Thermal Power Candidates 4-2 4.1.3 Candidate Thermal Plant Details 4-2 4.2 Fuel 4-4 4.3 Screening of Generation Options 4-8 4.3.1 Thermal Plant Specific Cost Comparison 4-8 4.4 Current Status of Non Committed Thermal Projects 4-9 4.5 India-Sri Lanka Electricity Grid Interconnection 4-10 5 Renewable Generation Options for Future Expansions 5-1 5.1 Introduction 5-1 5.2 Major Renewable Energy Development 5-2 5.2.1 Available Studies on Hydro Projects 5-2 5.2.2 Committed Hydro Power Projects 5-3 5.2.3 Candidate Hydro Power Projects 5-4 5.2.4 Details of the Candidate Hydro Power 5-5 5.3 Hydro Power Capacity Extensions 5-6 5.3.1 Mahaweli Complex 5-6 5.3.2 Samanala Complex 5-8 5.3.3 Laxapana Complex 5-8 5.4 Pumped Storage Hydro Power for Peak Power Generation 5-9 5.5 Other Renewable Energy Development 5-10 5.5.1 Projected future development 5-10 5.5.2 Development Mannar wind farm project 5-14 5.5.3 Development of Rooftop Solar PV installations 5-14 5.5.4 Development of 60 x 1MW Solar PV projects 5-15 5.5.5 Renewable Energy integration Study 2018 - 2028 5-15 5.6 Renewable Energy Resource Estimation 5-16 5.6.1 Estimating Major Hydro Capacity and Energy Contribution 5-16 5.6.2 Estimating Wind Capacity and Energy Contribution 5-16 5.6.3 Estimating Solar Capacity and Energy Contribution 5-18 5.6.4 Estimating Mini Hydro Capacity and Energy Contribution 5-18 5.6.5 Estimating Biomass Capacity and Energy Contribution 5-18 5.6.6 Municipal Solid Waste Based Power Generation 5-19 5.6.7 Other forms of renewable energy technologies 5-19 6 Generation Expansion Planning Methodology and Parameters 6-1 6.1 Generation Planning Code 6-1 6.2 National Energy Policy and Strategies 6 - 1 6.3 Preliminary Screening of Generation Options 6-3 6.4 Planning Software Tools 6-3 6.4.1 SDDP and NCP Models 6-3 6.4.2 MAED Model 6-3 6.4.3 WASP Package 6-4 6.4.4 MESSAGE Software 6-4 6.4.5 OPTGEN Software 6-5 Page ii 6.5 Hydro Power Development 6-5 6.6 Assessment of Environmental Implications and Financial Scheduling 6-5 6.7 Modeling of Other Renewable Energy 6-5 6.8 Study Parameters 6-6 6.8.1 Study Period 6-6 6.8.2 Economic Ground Rules 6-6 6.8.3 Plant Commissioning and retirements 6-6 6.8.4 Cost of Energy Not Served (ENS) 6-6 6.8.5 Loss of Load Probability (LOLP) 6-6 6.8.6 Reserve Margin 6-6 6.8.7 Discount Rate 6-7 6.8.8 Plant Capital Cost Distribution among Construction Years 6-7 6.8.9 Assumptions and Constraints Applied 6-7 7 Results of Generation Expansion Planning Study 7-1 7.1 Results of the Preliminary Screening of Generation Options 7-1 7.2 Base Case Plan 7-2 7.2.1 System Capacity Distribution 7-5 7.2.2 System Energy Share 7-7 7.2.3 Fuel, Operation and Maintenance Cost 7-10 7.2.4 Reserve Margin and LOLP 7-12 7.2.5 Spinning Reserve Requirement 7-13 7.2.6 Base Case analysis using MESSAGE Energy Planning tool 7-13 7.2.7 Investment, Pricing and Environmental Implications 7-14 7.2.8 Reference Case 7-14 7.3 Fuel Diversification Scenarios 7-16 7.3.1 Future Coal Power Development Limited to 1800 MW 7-16 7.3.2 No Future Coal Power Development 7-17 7.3.3 Comparison of the Results 7-18 7.4 Impact of Demand Variation on Base Case Plan 7-19 7.5 Impact of Discount Rate Variation on Base Case Plan 7-19 7.6 Impact of Fuel Price Sensitivity on Base Case Plan 7-19 7.7 Natural Gas Breakeven Price Analysis 7-20 7.7.1 Breakeven Price of Imported Natural Gas 7-21 7.7.2 Breakeven Price of Local Natural Gas 7-21 7.8. Energy Mix with Nuclear Power Development Scenario 7-22 7.9 HVDC Interconnection Scenario 7-22 7.9.1 Possibility of Reduction of Cost 7-22 7.10 Externalities 7-23 7.10.1 Local Environmental Damage Cost 7-23 7.10.2 Global Damage Cost of GHG Emissions 7-23 7.10.3 Environmental and Social Damage Cost Estimates 7-24 7.11 Comparison of Energy Supply alternatives in 2037 7-25 7.11.1 Global Context 7-25 7.11.2 Sri Lanka Context 7-26 7.12 Summary 7-27 Page iii 8 Implementation and Investment of Generation Projects 8-1 8.1 Committed and Candidate Power Plants in the Base Case 8-1 8.1.1 Committed Plants 8-1 8.1.2 Present Status of the Committed and Candidate Power Plants 8-1 8.2 Power Plants Identified in the Base Case Plan from 2018 to 2028 8-3 8.3 Implementation Schedule 8-4 8.4 Investment Plan for Base Case Plan 2018 – 2037 and Financial Options 8-6 8.4.1 Investment Plan for Base Case Plan 2018 – 2037 8-6 8.4.2 Financial Options 8-6 8.5 Investment Plan Variation for Scenarios 8-7 8.6 Recommendations for the Base Case Plan 8-8 9 Environmental Implications 9-1 9.1 Greenhouse Gases 9-1 9.2 Country Context 9-1 9.2.1 Overview of Emissions in Sri Lanka 9-1 9.2.2 Ambient Air Quality & Stack Emission Standards 9-2 9.3 Uncontrolled Emission Factors 9-5 9.4 Emission Control Technologies 9-5 9.5 Emission Factors Used 9-6 9.6 Environmental Implications – Base Case 9-8 9.7 Environmental Implications – Other Scenarios 9-10 9.7.1 Comparison of Emissions 9-10 9.7.2 Cost Impacts of CO2 Emission Reduction 9-13 9.8 Climate Change 9-11 9.8.1 Background 9-14 9.8.2 Climate Finance 9-16 9.8.3 Sri Lankan Context 9-17 10 Revision to Previous Plan 10-1 10.1 Demand Forecast 10-1 10.1.1 Analysis of Provincial Demand Profiles 10-1 10.1.2 Base Demand