Sri Lanka is grappling with rising electricity generation costs, without the benefits seen in neighboring countries with Independent Power Producers (IPPs).
Inadequate transmission planning revealed by network failures contrasts with advanced private settings in India, emphasizing technology-driven customer empowerment. To move forward, Sri Lanka’s CEB-dominated sector requires reforms, inviting private players under strong supervision to balance growth and consumer needs.
Internal sources close to the project revealed that IPPs like Adani, for example, could offer a substantial cost reduction of 30%, bringing unit costs below $0.10, providing much-needed relief to the general public.
The wind energy project alone promises annual savings of $50 million to the Sri Lankan economy, according to the internal project, as opposed to costs the country has to pay Rs. 20 billion in non-renewable energy costs annually, sources say. However, large-scale renewable projects are stalled due to opposition from certain CEB officials, causing a loss of 3,200 GWh annually, described as a “mafia” within the CEB, posing a threat to both economic growth as well as for renewable energy objectives, reveal sources close to the project. . The recent grid failure emphasizes the urgency of making changes to foster competition and improve reliability in the electricity sector.
Companies have revealed intentions to invest a total of $25 billion in the country’s renewable energy sector by 2030, as reported by the Board of Investment.
Over the next 3-4 years, potential private investments through Foreign Direct Investment (FDI) could reach up to $3 billion, earmarked for utility-scale wind, solar, and battery storage projects.
Sun Power will lead with a $1.5 billion commitment, followed by Adani Green with $900 million, Orbital Energy with $200 million, WindForce PLC with $150 million and the remaining portion covered by a consortium of private developers, according to recent press reports.
By Chanaka de Silva