Sri Lanka - Power system loss reduction study

Joint UNDP/World Bank Energy Sector Management Program Activity Completion Report No. 007/83 Country: sRi L^AN Activity: POWER SYSTEM LOSS REDUCTION STUDY July 1983 Report of the Joint UNDP/Ubdd Bank Energy Sector Management Progran This document has a restricted distribution. Its contents may not be disclosed without authorization fron the Government, the UNDP or the World Bank.  Energy Sector Management Program The Joint UNDP/World Bank Energy Sector Management Program is designed to provide a rapid and flexible response to governments who request assistance in implementing the policy, planning and institutional recommendations of the Energy Assessment Reports produced under another Joinr UNDP/World Bank Program, or in carrying out prefeasibility studies for euergy investments identified in these reports. The Energy Sector Management Program can provide the following types of assistance for countries which have had assessments: o assistance to improve a government's ability to manage its energy sector, for example by defining staffing and work programs, evaluating management information needs, identifying sources of public and private finance, develiping a medium-term investment plan; o prefeasibility work on priority investment plans, especially those which will improve the efficiency of energy use, bring about economic fuel substitution, or provide enough affordable energy to rural areas; o specific short-term assistance in institutional and manpower development, both at the sectoral and agency levels. The Progr-.A aims to supplement, advance and strengthen the impact of bilateral or multilateral resources already av.iilable for technical assistance in the energy sector. * ** * ** Funding of the Program The Program is a major international effort and, while the core finance has been provided jointly by the UNDP and the World Bank, important financial contributions to the Program have been made by the Governments of the United Kingdom, the Netherlands, Denmark, Finland, Norway, Sweden, Australia and New Zealand.  -w SRI LANKA POWR SYSTEX LOSS REDUCTION STUDY JULY 1983  CURRENCY EQUIVALENTS Currency Unit - Rupee US$ 1.00 - Rs 22.9 UNITS Thousand circular mills (kcmil) - 1.94 sq.mm. 1 mile - 1.6903 kilometer 1 meter (m) - 3.28 feet 1 kilometer (km) a 1,000 meters 1 kilovolt (kV) - 1,000 volts 1 kilowatt (kW) = 1,000 volts 1 megawatt (MW) - 1,000,000 watts 1 kilovolt ampere (kVA) - 1,000 volt amperes 1 megavolt-amp. (IVA) = 1,000 kilovolt-amperes I kilovolt-ampere reactive (kVAR) - 1,000 volt-amperes reactive I mega volt-ampere reactive (KVAR) - 1,000 kilo-volts ampere reactive (kVAR) 1 Gigawatt-hour (GNh) - 1,000,000 kilowatt-hours (kWh) GLOSSARY AND ABBREVIATIONS CEB Ceylon Electricity Board OA Self-cooled transformer rating FA Fan-cooled transformer rating AAC All aluminum conductor ACSR Aluminum conductor, steel-reinforced  TABLE OF CONTENTS Page No. FOREWORD AND SUMMARX OF CONCLUSIONS AND RECOMMENDATIONS .......... i Foreyord .......................oooo.................. i Summary of Conclusions............................ ii Summary of Recommendations.........o................................... lii SECTION I - TRANSMISSION AND DISTRIBUTION SYSTEM REVIEW, CIRGUIT ANALYSIS AND LOSS REDUCTION ............... ........ .................... *............ ....... 1 System Losses ........... ... 1 Long Run Marginal 2................................ . 2 System Voltage Levelvo.el.......................... 3 Transmission System........ ... ............. ...... 4 Distribution Circuit Anyiysis 4 Distribution System Rehabilitation Project...e...... 6 Local Authorities and Small Power Entities.......o.. 7 SECTION II - GENERATING PLANT RRHABIITATION.ooI.............oo. 7 The Kelanitissa Steam Plant (KSP)o S P)............ 8 Gas Turbine and Diesel Plant Maintenance.**4,....... 9 LIST OF TABLES IN TEXT 1.1 Component of Losses................................. 2 1.2 Long Run Marginal Costs at Various Points in the System oo....o.... o ...o....o.o......ooo...o. 3 3.1 3stimated Costs and Benefits in Rehabilitation of KSP...SP........................ 8 ANNEXES 1 Terms of Referencef - Distribution System Rehabi3itation Erogram....... o.... o..... ooo....... 10 2 Terms of Reference - Kelanitissa Steam Plant Rehabilitation............................. 16  SRI LANKA UNITED NATIONS DEVELOPMENT PROGRAMME POWER SYSTEM EFFICIENCY STUDY PROJECT IDENTIFICATION REPORT FOREWORD AND bUMM&RY OF CONCLUS'.ONS AND RECOMMENDATIONS Foreword i. Power system efficiency improvement and loss reduction have been pin- pointed as issues in almost all the country en. Uy assessment reports completed under the joint UNDP/World Bank Energy Assessment Program. Sn response to these findings the UNDP agreed to support a preparatory project (INT/82/009) to develop methodology which could be used to identify improve- ments in electric power systems of the countries studied to reduce technical losses and thereby conserve energy. This report is one of the case studies completed under that preparatory project. ii. In Sri Lanka, the principal power entity is the government-owned Ceylon Electricity Board (CEB) wbich supplies consumers in its own service area and sells power in bulk to 218 "local authqrities" and small entities which, in turn, serve customers in their respective service areas. CEB's sales to the local authorities amount to about 25% of its total sales. This report deals in detail with CEB and makes a recommendation for future review of the local authorities. The report is presented in three sections: (a) The Project Identlfication Report (b) The Generation Technical Supplement (c) The Transmission and Distribution Technical Supplement iii. The study recommends the following: (a) A Distribution System Rehabilitation Project which involves short-term improvements to correct the most urgent needs to improve efficiency, and consultant's studies to prepare a longer-term Distribution System Betterment Program. The proposed Phase I investment required would be $24.7 million, and the Phase II Program would require $56.5 million. The savings in distribution system losses would repay the investment cost in about 3 years. About 25% of these costs would be In local currency. These estimates do not make any provision for work in the local authorities' systems. This would add about 35% to the cost estimates.  - ii - (b) A Steam Plant Rehabilitation Program to restore the principal thetmal plant to normal efficiency, operating reliability and capacity. The cost of this rehabilitation program would be about $2 million and fuel savings in 1 year would repay the cost. Summary of Conclusions iv. The CEB power system and its administrative organizatiou have suffered considerable deterioration during recent years because of a severe flight of senior and experienced personnel from the entity due to an inade- quate salary scale. The management structure and technical staff in place today has been so depleted that they are unable to handle the problems they face without outside help. CEB has management consultants reviewing the management organization. v. The distribution system and the principal steam plant have deterio- rated to the point where quality of service is poor and severe power shortages are being experienced. The new and planned future additions to generating capacity will alleviate the power shortage in about 2 years' time and last until about 1987-89, depending on future growth in demand. But major rehabilitation of the existing steam plant is required and appropriate mainte- nance programs must be put in place to prevent the new plant from quickly deteriorating. The transmission and distribution networks are in need of major rehabilitation and expansion, both on the CEB system and even more so on the local authorities' systems. Neither the organization nor the trained personnel needed to deal with these problems is available. vi. The principal oil fired steam plant, Kelanitissa (50 MW), has deteriorated so that it has been derated to 35 MW and its heat rate has increased from 11,000 Btu/kWh, which would normally be expected from a plant of this age, to 14,250 Btu/kWh. The direct cost of rehabilitating this plant would be about $1.5 million and the annual savings in fuel cost would be about $2.8 million. vii. The hydro plants, which supply about 80% of CEB's power requirements, are generally satisfactorily maintained. However, due to the annual dry and wet seasonal rainfall cycle, these hydro plants depend on a thermal plant backup to compensate for low water periods. Opportunities appear to exist for cost-effective modification and improvements to the hydro plants, consisting of retrofitted turbine runners, improvements to trash racks and penstocks, and possible civil work modification, such as tail-race realignment. The Phase I Program includes an engineering survey of these prospects. viii. Sri Lanka has been suffering from an unasually severe drought since 1981 which reduced hydro plant reservoirs to such low levels that the thermal plants were unable to supply the deficit in energy and power supply had to be restricted. This situation and the deteriorated physical condition of the generation, transmission and distribution systems created unacceptable low voltage conditions throughout the transmission and distrilution network. The addition of new hydro and thermal capacity now scheduled will alleviate this  - iii - situation in about 2 years' time. However, there remains the need to review all system planning criteria to avoid a repetition of this situation. The long-range geueration expaasion program to supply forecast demand about 1990- 1992 has still not been adequately defined, so that less-than-optimum- solutions may have to be adopted. In turn, the uncertainty of the generation program makes it difficult to plan transmission facilities, where needed reinforcements are late in being carried out. ix. The existing transmission system is loaded beyond its capacity in sections and has higher losses than would normally be expected. Total losses on the CEB system in 1982 were about 18.1% of gross generation; the non- technical portion of these losses - those due to billing errors and illegal diversion of current -- were estimated at about 3.5% of total losses. In other words, total system losses could be reduced to about 14.6% by eliminating non-technical losses. If technical losses could be reduced by 30% by 1990, total system losses could be reduced to about 10.2%. This would seem to be an attainable target and would represent an average annual fuel savings of about $11 million from 1985 to 1990. X. Distribution and transmission system computer-based loss analysis has not been done by CIB so far, but an engineer has recently been assigned to this task along with other duties. Proposals for the acquisition of computer programs for loss reduction analysis and system design are being reviewed by CEB. The analysis made by the team on selected test circuits to show the effect of simulating the addition of capacitors gave benefit to cost ratios of 10:1 or more. The average benefit to cost ratio when reconductoring and adding capacitors was 3:1 because of the much higher cost of reconductoring. The use of a computer-based analysis substantially enhances results obtained by using traditional design methods. xi. The Distribution System engineering, planning and construction are separated under several departments and regions so that coordination is lacking. The design criteria needs revision to bring practices into line with today's system requirements and economic conditions. xii. The quickest means of accomplishing the restoration of CEB and initiating the loss reduction activities would be to engage outside consul- tants and contractors for about 3 years to plan, organize and start the activities while, at the same time, training CEB personnel to take over and continue the activities into the future. In parallel with this program to restore the system to adequate operating efficiency, steps should be taken to correct the salary and manpower problems. The government is aware of this and is reviewing its options to find a solution. xiii. Summary of Recommendations a (1) In order to provide coordination for distribution activity and to improve system efficiency in the area where the highest percentage of system losses occur, it is recom- mended that a Distribution Engineering Department be created.  - iv - (2) A computer-based distribution circuit analysis program is needed as a permanent, continuing activity to identify distribution system losses and keep them at acceptable levels and optimize circuit performance to meet changing system conditions. In order to ensure a satisfactory computer analysis, it is essential to establish an adequate data base. For example, distribution system maps should be completed and kept up-to-date; substation feeder metering should be improved and data should be recorded and analyzed on a systematic basis. CEB has invited offers from consul- tants to supply computer programs but additions to those programs may be needed to accommodate the rehabilitation program recommended in this report. (3) Transmission and distributiun system design criteria and standards should be revised to reflect current economic costs. (4) Metering, billing and collection practices should be reviewed to ensure that all appropriate measures are being taken to reduce losses and unaccounted-for usage. (5) A Distribution System Long Range Program should be developed under the proposed new Distribution Engineering Department when this is formed. (6) The Kelanitissa Steam Plant should be rehabilitated to improve heat rate, extend the plant's life expectancy and increase firm capacity. (7) A comprehensive maintenance program for all thermal plants should be organized and implemented. (8) The dispatch system for generating facilities should be improved to ensure adequate system voltage control, optimize maintenance and maximize the economic usage of each type of plant to achieve the lowest cost of power generation for the system as a whole. (9) In view ot the technological advances made in hydro turbine design in recent years, it is recommended that CEB should contract a qualified consultant to make a comprehensive audit of the operating efficiency and maintenance proce- dures of its hydro plants to ascertain whether significant improvements in efficiency can be identified and justified.  (10) While the local authorities' and other small entities' systems were not examined in detail, it was concluded, from some on-site inspection and discusrions, that losses are probably high and the physical installations have deteriorated. Therefore, a review should be made of this situation to determine the best proce-dure to improve performance on these small systems. This matter is being reviewed by the govermnent.  SRI LANKA POWER SYSTEM EFFICIENCY STUDY PROJECT IDENTIFICATION REPORT SECTION I TRANSMISSION AND DISTRIBUTION SYSTEM REVIEW, CIRCUIT ANALYSIS AND LOSS REDUCTION General 1.01 This section of the report reviews the condition and problems of the Transmission and Distribution System, describes briefly the Loss Reduction Study and presents recommendations for the rehabilitation of the CEB system. Further deteil on the transmission and distribution system is given in the Transmission and Distribution System Technical Supplement. System Losses 1.02 Before examining the loss situation, it is important to understand that all information on system performance such as sales, gross generation, substation circuit load data, power factor, etc., -is to varying degrees inac- curate and in a number of instances missing altogether. Some of the problem is due to a lack of instrumentation and in other cases because of poor mainte- nance of equipment and a lack of systematic supervision. Thus, while the conclusions reached in this report are reasonably good indicators of the problems, it was not possible to comp.ete a >recise analysis. 1.03. A review of system losses shows thai: during the 1970's average losses were about 15% of gross generation. It appears that those losses were practically all technical losses. In 1981 and 1982, losses jumped to 18.8% and 18.1 % of gross generation. The only plausible explanation for this sudden increase is the deterioration of the system and a substantial increase in non-technical losses. In view of this background, it is the team's opinion that non-technical losses could be substantially reduced or eliminiated by applying a vigorous campaign to remove the causes of these losses, e.g., billing and meter reading errors, Improperly metered or unmetered customers ard illegal usage. It is also evident, as shown by the circuit analysis, that t,achnical losses can be reduced substantially by rehabilitating the distribu- tion system and improving transmission system design. 1.04 A rough analysis of total system losses gives the following propor- tions, as a percentage of gross generation, for the principal components of losses for the year 1982:  2- TPble 1.1 Percentage of Coar-onent of Losses Gross Generation Transdission system losses 3.4% Substation power transformer losses 4.6% Distribution system technical losses 6.6% Distribution system non-technical losses 3.5% Total system 1 qses, both technical and non-technicall' 18.1% 1/ As a point of reference, it might be interesting to note that in industrialized countries, total power system losses average about 7.5%. 1.05 The conclusions to be drawn from the above are: (a) Transmission system and power transformer losses are consider- ably higher than would be expected for 'he CEB system, indicating that the transmission system design and loss levels should be carefully reviewed. (b) Distribution system losses could be reduced materially. (c) Non-technical losses could be reduced very substantially or practically eliminated. (d) Total system losses in 1982 cost CEB about $41 million based on gas turbine fuel cost, or $38 million if calculated on the long run marginal cost of energy. Long Run Marginal Costs 1.06 The long run marginal cost (LRMC) may be defined as the present value of the economic cost of supplying an incremental unit of demand on the power system. 1.07 For the purposes of valuing technical losses in the electrical net- work, the long run marginal cost is estimated as a two-part cost, an incremental capacity related cost and an incremental energy cost. A 1.08 The peak kilowatt charge is based on the investment and fixed opera- tion and maintenance cost of the incremental capacity related facilities that the system planners would adopt as the least cost means of providing the  - 3 - incremental peak demand kilowatt. These facilities are the powerhouse and associated eloctro-mechanical equipment of the Rantembe/Randenigala hydro scheme and the incremental additions to the network included in the least cost investment program from 1983 to 1993. 1.09 The marginal energy cost is derived on the basis of incremental fuel and variable operation and maintenance costs of the generating facilities that would be used to provide the incremental kilowatt-hour. The marginal energy cost is calculated as a weighted average incremental cost of peak and off-peak energy. The generating system simulation indicates that the existing gas turbines would be needed to provide the energy at peak times in the dry season and heavy oil-fired diesels in the wet season. Off-peak energy in the wet and dry seasons would respectively be provided by hydro and steam plants. 1.10 Table 1.2 shows the estimated LRMC's at 11Z discount rate, as the opportunity cost of capital to Sri Lanka, and at the international border price of fuel at Rs 5.76/litre for diesel 2 and Rs 3.88/litre for furnace oil. Table 1.2: Long Run Marginal Costs at Various Points in the System I. Marginal Capacity Cost US $/kW/Year At High Voltage Sub. At Medium Voltage At Low Voltage Generation at Bus (132-66 kV) (33 - 11 kV) (400 V) (Distribution Transfer) (Customrr SVC) 57 93 124 136 II. Marginal Energy Cost US S/WH At High Voltage Sub. At Medium Voltage At Low Voltage Generation at Bus (132 - 66 kV) (33 - 11 kV) (400 V) (Distribution Transfer) (Customer SVC) 0.0550 0.0594 0.0624 0.0633 System Voltage Levels 1.11 The late completion of new hydro and thermal generating plants, the derating of existing thermal plants (Section II), and the unusually severe drought added to the deterioration of the transmission and distribution systems have resulted in unacceptably low voltage conditions throughout the system in varying degrees. The normally accepted voltage variation of *6% has long been exceeded and now is frequently 10% on the low voltage system with areas where, during peak hours, because voltage on the 33 kV system drops to 24 kV, domestic lighting is reduced to a reddish glow. This condition not only gives extremely poor quality service but substantially increases system  losses and represents an ecouomic loss to the community. In many hotels and industries, standby diesel units, aggregating 22 MW, have been installed by the owners to assure electrical supply when the CEB system provides inadequate service. Transmission System 1.12 Transmission system losses are higher than expected. The following points were noted by the team: (a) Existing transmission system conductor size has been selected on the basis of using a standard conductor size rather than on the most economic size. Size for line now under construction was selected on the conductor thermal rating. These design criteria should be reviewed since substantial loss reduction could be achieved by accelerating construction of planned transmission lines or reconductoring existing lines where feasible. (b) Transmission system losses could also be reduced by operating lines in parallel instead of the present radial pattern. This also would improve voltage levels. (c) The 66 kV system is old and has high losses in both the lines and transformers. A study should be made to determine the best procedure for upgrading or eliminating this voltage level. 1.13 The Transmission and Distribution Technical Supplement gives details of the above. Distribution Circuit Analysis 1.14 The analysis of distribution circuits was made by the team by using a computer-based program which, on the basis of the physical and electrical characteristics of the circuit, is able to calculate the technical losses and can then calculate the reduction in losses resulting from the addition of capacitors or changing conductor size. It can also give the optimum location of capacitors. 1.15 The limitation to this analysis is the quality of the data base from which the input to the computer is derived. Unfortunately, as already stated, in Sri Lanka the data base is not good. 1.16 In order to obtain a representative cross section of the system, two 11-kV underground cable circuits in Colombo and four 33-kV rural overhead line circuits were chosen as the test circuits. The results showed that losses could be reduced economically by adding capacitors and/or increasing conductor sizes. The average reduction in losses derived from the proposed improvements to the circuits, when translated into fuel savings, gave benefit to cost ratios of 3 to 1, which clearly shows that a loss reduction program is urgently needed and would pay excellent dividends. Where reconductoring was not essential and only capacitors were added, the benefit to cost ratios were  - 5 - above 10 to 1, because of the comparatively low cost of capacitors. Computer- based analysis of distribution circuits is not being made by CEB at the present time. However, offers have been invited for the supply of computer equipment, programs and consulting assistance to establish a distribution circuit analysis program. Changes and extensions to the system have been made using traditional design procedures based on past standards and criteria. In general, these results can be substantially enhanced by using a computer-based circuit analysis. It is urgently necessary for CEB to acquire the equipment to institute a distribution system circuit analysis program on a continuing basis but to make such a program fully effective, a parallel project should be organized to bring the data base up to the required level to facilitate mean- ingful analysis of operating data. These recommendations have been included in the Terms of Reference for the distribution consultant (Annex 1). Distribution System Organization 1.17 The operations, maintenance and construction of the Distribution System has recently been divided into two geographic regions. CEB's manage- ment consultants are now proposing that standards and material specifications be transferred to the jurisdiction of the Commercial Department. There are apparently compelling reasons for these changes, however, the team feels that some other important factors are being left unaddressed. 1.18 The first factor is that this fragmentation of control over distri- bution activity must be coordinated at some point in the organization by a group that specializes in and which understands distribution engineering. At one time, distribution was a secondary activity and a relatively simple func- tion compared to generating plant and transmission lines. This is no longer true. Today, the Distribution System, in most cases, accounts for over 50% of total system losses and 25% or more of the power entity's annual capital investment. It is a major activity. In addition, distribution engineering now involves specialized techniques; design standards and criteria have changed radically in response to changed economic conditions. These new factors impact forcefully on the investment, maintenance and operating costs of the system. It is estimated that CEB could easily reduce distribution system losses to save the equivalent of $11 million annually in fuel costs by applying modern techniques and design criteria. 1.19 It is therefore recommended that a Distribution Engineering Depart- ment be created to coordinate distribution activity; establish uniform criteria, standards and procedures for distribution work; utilize modern computer-based analytical techniques; centralize distribution system overall planning and engineering procedures; collect and analyze system information to monitor performance and identify needed changes. Details are given in Annex 1. The revised organizational arrangements should provide for extending these services and design criteria to the local authorities and independent systems. Consideration should also be given to coordinating procurement and stores to ensure that uniform materials and criteria are used throughout the country.  - 6- Distribution System Rehabilitation Project 1.20 In order to rehabilitate the Distribution S-stem and implement the various recommendations made in this report, it is proposed that CEB should consider undertaking a two-phase Distribution System Rehabilitation Program described below. 1.21 In order to introduce new techniques, methods and criteria, it is recommended that consultants be engaged to organize and implement the project and train CEB personnel to take over the activity when it has been established. 1.22 The first phase of the Program would be a 3-year Distribution System Rehabilitation Project which would include the following: (a) Organize and place in operation a Distribution Engineering Department which would include the responsibilities detailed In Annex 1, Terms of Reference for the Consultant. (b) Organize and initiate a Distribution Rehabilitation Project to make physical changes and improvements to the Distribution System to correct the most urgent deficiencies, reduce losses and improve service quality as quickly as possible. Where possible and with CEB's approval, parts of the project, such as installing capacitors, should be implemented while the full study of the system is being completed. (c) The making of various studies, such as: -i) Benefits and costs of converting the existing 33-kv overhead distribution system from 3-phase, 3-wire or 4- wire with a common primary and secondary neutral. This would include the use of single-phase transformers and 230/460 volt secondary, a review of existing substation grounding (now Petersen coil), and upgrading switchgear interrupting capacity; (ii) benefits and costs of converting existing 11-kV overhead to 33-kV as part of system rehabilitation: (iii) other detailed studies as given in the Distribution Technical Supplement. 1.23 The estimated work under the Project (Phase I) will consist of engineering the installation of 233 MVAR of capacitors, reconductoring/rebuilding 189 km of 33 and II-kV line, 1,700 km of new line, and miscellaneous materials. 1.24 The second phase will cover the next 2-year period and will be a continuation of Phase I. It would include completion of the loss reduction and rehabilitation project and include the requirements for materials and  - 7 - equipment needed for normal expansion to meet forecast demand and such modifi- cations to the transmission system determined by studies made in Phase I. This should then become part of the permanent function of the Distribution Engineering Department's permanent activities. It may be necessary to engage further consulting assistance beyond that suggested for Phase I. That decision would be taken by CEB in due course, after the results of Phase I can be judged. 1.25 As part of Phase II, the estimated requirements are 152 MVAR of capacitors, reconductoring an additional 78 km of line, 1,350 km of new line, 280 MVA of diatribution transformers and 190 MVA of additional asubstation capacity. Local Authorities and Small Power Entities 1.26 In making the Sri Lanka study, the CEB system was studied in detail while the other power entities were only given a relatively brief visual inspection. The complexity and magnitude of CEB's problems as well as the fact that it alone represents about 75% of the power sector, were the reasons for this decision. It was considered more productive to concentrate on the major entity first. 1.27 The brief visit to some of the local authorities resulted in the following observations and recommendations: (a) In general, these smaller entities tend to copy CEB procedures and standards but frequently are less well managed, suffer higher system losses and are in need of more assistance. (b) The basic problem is that the multiplicity of entities, some very small, needs restructuring so that a single entity could direct the engineering, planning and construction for these entities. (c) It would be useful to have a study made to ascertain the condi- tion of the small entities and the approximate cost to rehabilitate their systems. The consultant's Terms of Reference include this as part of the Phase I work. SECTION II GENERATING PLANT REHABILITATIION Overview 2.01 This section of the report reviews the condition of the generating plants and presents a rehabilitation project for the Kelanitissa Steam Plant and comments on other matters associated with the generation system.  - 8 - 2.02 In general, the hydro plants are satisfactorily maintained. On the other hand, the principal steam plant needs major rehabilitation, and mainte- nance procedures need improvement to avoid future problems. System operations and planning should be reviewed to avoid a further recurrence of present difficulties. Further detail on the generating system is given in the Generating Plant Technical Supplement. The Kelanitissa Steam Plant (1SP) 2.03 The steam plant contains two 25 MW units which are about 20 years old. In 1979, the units had become so deteriorated that they were derated to 40 MW and CEB called in consultants and the manufacturers of the boiler and turbine-generator to recommend a project to restore the plant to acceptable efficiency and reliability. The recommendations have still only been partially carried out and the plant is in even worse condition than it was in 1979. It is now rated at 35 MW capacity. The plant heat rate is about 30% higher than it would be if it were in good working order. 2.04 The rehabilitation of KSP would be very attractive because the needed improvements, if properly handled, could be completed in 12-18 months at a cost of about $1.5 million and would give fuel savings of about $2.8 million annually. In addition, by restoring the plant to rated capacity, the system would gain 10 MW of reliable capacity. 2.05 Table 2.1 shows the estimated costs and. benefits of the principal items involved in the rehabilitation of KSP. These are foreign exchange costs. Local costs would add about 10%. However, it is to be noted that this does not include the cost or benefits which would result from completing the repair work recommended in 1979, which has been budgeted separately by CEB. This work is, however, included in the terms of reference for the consultant recommended for the KSP rehabilitation. Table 2.1 Item Cost S Benefit S/Yr 1. Consulting Services 250,000 2. Contractors 150,000 - 3. Burner Replacement 270,000 200,000 4. Control Rehabilitation 210,000 110,000 5. Chlorination System 60,000 250,000 6. Fuel Oil Analyzer 25,000 - 7. Air Preheater/ I.D. Fan Repair 26,000 66,000 8. Variable Speed Fan Drives 175,000 60,000 9. Valve and Line Replacement 60,000 - 10. Various Improvements 30,000 - 11. Restoration of Unit to Rated Capacity and Efficiency - 2,125,000 12. Contingencies 144,000 - TOTAL 1,400,000 2,811,000  -9- 2.06 The rehabilltation of KSP involves specialized work which is usually performed by the equlpment manufacturer or contractors who are specialized in the work. In CEB'a case, the KSP maintenance and operations crew are not sufficiently experienced to handle this work which should be done under the management of a qualified outside consultant. 2.07 In addition to the work summarized in Table 2.1, the consultant would have to do the following, which have not been included in the costs irn Table 2.1 because they are not directly related to the improvement in efficiency of the units: (a) Prepare instructions and detailed procedures for placing KSP in cold standby during the annual wet season. This is very important because of the need to maintain all thermal plants constantly in good condition to back up the hydro plants. (b) Describe and organize a maintenance program to keep KSP in good condition after it has been rehabilitated. (c) Train CEB personnel in the performance of items (a) and (b). 2.08 Terms of Reference for the consultant are gi',n in Annex 2. Gas Turbine and Diesel Plant Maintenance 2.09 CEB haw 120 MW of gas turbines and 12.5 MW of diesel plant in service. It is also installing 80 MW of new diesel units and plans a further addition of 40 MW of diesel units in 1988. These units all burn diesel oil and all are susceptible to damage from contaminants in the fuel. CEB should immediately purchase a fuel oil analyzer and establish a procedure to make sure that oil quality is within acceptable limits at all times. The manufacturers of generating plants usually stipulate the acceptable levels of various fuel contaminants and recommend corrective action should the limits be exceeded. 2.10 It is also essential to institute proper maintenance procedures to ensure that this equipment is kept in good condition. 2.11 In the case of the gas turbines, which require attention by experienced and trained specialists, CEB should consider giving a maintenance and inspection contract to the manufacturer. This procedure is followed by many power entities and is considered mDre efficient than doing the work with in-house personnel. 2.12 In the case of the diesel units, the manufacturer could also be contracted to supervise scheduled overhaul and maintenance or train CEB staff to do it. In any case, complete manufacturer's manuals should be available and carefully followed. It is false economy to neglect maintenance as should be realized after the KSP experience.  - 10 - Annex I Page 1 of 5 ANNEX 1 TERMS OF REFERENCE DISTRIBUTION SYSTEM REHABILITATION PROGRAM CEYLON ELECTRICITY BOARD Foreword 1. This project has as its purpose the rehabilitation of the Distribution System, the reduction of losses in the Distribution and Transmission System, improvements in the overall efficiency of the system, and the establishment of a proposed Department of Distribution Engineering and the training of staff. It is the intent that the work will be organized and managed by consultants. The work is proposed in two phases, Phase I, to last for a 3-year period, to cover initial rehabilitation and loss reduction, department organization and several studies, and Phase II, to cover a 2-year period to complete rehabilitation and loss reduction projects, and preparation of a long-ra4ge distribution and transmission system plan. The following are proposed Terms of Reference and principal activities of the consultants. Phase I 2. The consultant shall: (a) Aid in the establishment of a new Distribution Engineering Department which will be responsible for overadl distribution system planning, design standards and engineering. The Consultant will recommend a new organizational structure for the proposed department for CEB's approval. Preliminary organiza- tion and functions are shown in Attachment 1. In agreement with CEB, the Consultant will provide key personnel where requested to establish the new department and train local counterpart staff to take over the various responsibilities when the new organization is functioning. (b) In parallel with the establishment of the new department, the Consultant should start a preliminary analysis of the distribution system to make a feasibility report for a first- phase distribution system rehabilitation and loss reduction program. This would include a project description, cost estimate in foreign and local currency, construction schedule, benefit-to-cost ratio and justification. The purpose of this project would be to correct the worst deficiencies in voltage level, service quality and loss levels as quickly as possible. The study shall consider both distribution and transmission.  - ll - Annex 1 -~~~~~ ~Page 2 of 5 The project would have to be coordinated with and be complimentary to any distribution system expansion planned by CEB. The report should cover a three-year period and be submitted in two stages--a preliminary recommendation in two months and a final report in four months. (c) Where possible, with CEB's approval, some elements of the projects, such as the engineering and purchase of materials for the installation and capacitors on a limited basis could be started before the full study is completed. This would be an important feature of the implementation of the Consultant's recommendations, so that improvements to CEB's organization and system performance would not have to wait a final report but that partial implementation could be initiated as the full scheme was being developed by the Consultant. (d) A second feasibility study shall be made of the distribution systems owned and operated by the local authorities. The study shall review the need for loss reduction and rehabilitation in order to improve voltage levels, reduce losses, and generally improve the efficiency of operation of the local authority systems. The work would include project descriptions, cost estimates in local and foreign currency ratios, schedules and justifications. The report shall be submitted in two steps, the first in preliminary form for review .and comment in three months after reviews are completed. Although this report is to be prepared under the auspices of CEB, the report shall be directed to the Government of Sri Lanka. (e) Implement plan formulated in Phase (b) and (c) above. (i) Note the work shall be coordinated with current CEB projects. Work shall be separated into that which can and should be done by construction contractors and work which must be done by CEB. The work shall take into account the results of studies in (f). (ii) Prepare specifications, including drawings, for work that can be done by contract, and specifications for material to be purchased and quantity estimates. (iii) Assist CEB in issuing requests for proposals, evaluation and award for contractors and materials. (iv) Establish mutually agreeable long-run marginal costs for the economic evaluation of improvements. (v) Provide a Construction Manager and Inspector(s) to coordinate construction and insure that work is built in accordance with proper standards, drawings and specifications.  -12- Annex 1 (f) Make studies as follows: (i) Advantages, disadvantages and benefits, if any, of converting the existing 33-kV, 3-wire system with Petersen coil grounding to a grounded neutral system, utilizing a common primary and secondary neutral. The study shall consider the possibility of utilizing 125- to 150-kV BIL equipment using single-phase distribution, and the optimum transformer sizes and secondary distribution circuit length and conductor size for the three-phase and single-phase circuits. (ii) Advantages, disadvantages and benefits of expanding or replacing the existing 11-kV overhead system with a 33-kV system. (iii) Review 66-kV transmission system with respect to losses, age and capacity and whether or not system should be retained or replaced with 132-kV. (iv) Distribution system protection, including use of reclosers, relay modifications, and switchgear replacement, if necessary. (v) Permissible minimum and maximum voltages and regulation under normal and emergency system operations for low and medium voltage customers. The study shall include an analysis of effective energy savings that may be obtained by using a narrow band of voltage regulation, recommended transformer secondary voltage and whether or not distribution transformer taps can be eliminated. The study shall consider the use of heavier line conductors that may be required for circuit loss reduction. (vi) Application guides for economic selection of primary and secondary conductor sizes. (viii) Improvements in existing transmission system operation that will minimize losses and maintain proper voltage levels. (ix) Application guide for transformers, including initial size for given and forecasted loads and optimum loading. (g) Prepare a complete set of distribution system construction standards, both overhead and underground. New standards shall 4 incorporate any recommendations above. New standards shall include the use of current state-of-the-art materials, where economically justified and adaptable to local conditions. Standards shall cover general line construction, transformers, switches, capacitors, regulators, street lighting where installed on CEB's poles, services and meters.  Annex 1 - 13 - Page 4 of 5 (h) Provide, through lectures, seminars and on-the-job training, instruction in distribution system design. It is the intent that all CEB engineers, both in the new Distribution Department and in the districts, shall be provided this training. (i) Utilize computer programs and equipment now being purchased by CEB for load flow studies and distribution system analysis. If these are not available or if they are inadequate, the Consultant shall provide recommendations regarding improvements that CEB should make, including additional programs that may be useful. Phase II 3. Consultant shall: (a) Continue with work necessary to complete system rehabilitation and loss reduction. It is the intent that all detail work would be accomplished by CEB and the Consultant shall review proposed work. (b) Continue with training and advice as necessary to the Distribution Engineering Department. (c) Prepare a system-wide expansion and rehabilitation plan as a continuation of the above for the Distribution and Transmission System. The plan shall provide a minimum cost system adequate to handle several stages of load growth, such as a 500-MW, 750 MW and a 1,000-MW system or other mutually agreed values. The plan shall take into account the results and recommendations of special studies in other parts of the Terms of Reference. The plan shall provide an orderly program for expansion and rehabilitation, improvements in distribution system protection, modifications to existing substations and general requirements and tentative locations of future substations. (d) Review and make recommendations for a uniform mapping procedure for transmission and distribution system, including secondary distribution and customer services. Establish procedures for maintaining maps either at the district engineer's office or at CEB's central engineering office. Maps shall be prepared in such a way that they can be used for a computerized circuit analysis and for transformer load management. (e) Review and make recommendations for improvements in transmission and distribution system operating and maintenance methods and safety procedures. (f) Establish a material identification system and suitable computer programs to improve material purchasing, forecast materials, inventory control and material distribution for all distribution  Annex 1 - 14 - Page 5 of 5 systems, substation, transmission construction materials and general maintenance materials for distribution, substations, transmission, power plants and offices. (g) Review and make recommendations for space requirements and equipment for stores, operation and maintenance to cover the needs of the next 10 years. Miscellaneous 4. (a) It is the intent of the Terms of Reference for the Consultant to establish a local office duaring the life of the project. Key personnel shall preferably stay with the project during its life. (b) Consultant will submit monthly reports, outline work accomplished, work to be done and problems. (c) Consultant will prepare a schedule of his activities. (d) CEB will make available to the consultant all available data, records and drawings. (e) Consultant will be given access to all CEB facilities subject to safety and operating requirements. (f) CEB will appoint specific individuals to be responsible for liaison between CEB and the Consultant.  ATTACHMENT 1 Page 1 of 1 - 15 - ATTACHMENT 1 SRI LANKA PROPOSED DISTRIBUTION ENGINEERING DEPARTMENT The Chief Distribution Engineer 1.0 Responsible for standards, operating procedures, performance, special trojects. To head four departments. (a) Design Engineer Responsible for: o Line Construction Standards, up to 33-kV, and including undergound * Equipment Installation Standards (transformers, capacitors, regulators, reclosers, switches) 3 Service and Meter Standards o Material Specifications (for Distribution System materials) (b) Performance (Ouality Control) Engineer Responsible for: * Analysis of outages and equipment failures to provide recommendations for corrective action where outage or failure rates are excessive