Mr Patali Ranawaka power minister of Sri Lanka said that government will start testing its first 300 MW coal power plant in September with plans to connect it to the national distribution grid by January 2011.

Sri Lanka's state run Ceylon Electricity Board is building 900 MW Chinese financed coal power plant on a design build transfer contract in Norochcholai in the north western coast of the island. The Phase I of the project is 300 MW.

Mr Ranawaka said that "We will start testing the first phase in September. We hope to commission it and connect to the grid by January 2011."

Mr MMC Ferdinandez power secretary said that the state power utility had made the first purchase of coal from Indonesia at a price of about USD 70 per tonne. Sri Lanka Shipping Corporation has been engaged for transport and with freight and insurance costs, the landed cost will be about USD 10 higher.

Mr Ferdinandez said that Sri Lanka is buying low sulphur, low moisture coal which generate lower volumes of ash when burned, which was available from Indonesia, Australia and South Africa. The coal plant will be a base load plant which will operate throughout the day. Sri Lanka has been running expensive liquid fuel plants including gas turbines for base load making the CEB run large losses. Coal is expected to reduce the costs of power generation. The CEB is expecting to lose about INR 40 billion in 2010.

(Sourced from www.lankabusinessonline.com)