Sri Lanka’s electricity demand is projected to increase considerably by 30% between 2015 and 2020 and double by 2030. In order to meet this demand, the state run utility Ceylon Electricity Board (CEB) has set out a detailed long-term generation plan, recently approved by the regulator, which commits to another 1,672MW of renewable projects in its base case scenario by 2030. This capacity will be achieved with state funding through the CEB as well as via a system of competitive open bidding for on-grid projects, and a recently launched program to incentivize small scale solar PV via a feed-in tariff.
In its NDCs, the country set a target of 60% of total generation from renewables (including large hydro) by 2020. The country also set out specific capacity targets for wind, solar, biomass and mini hydro, as well as the introduction of demand side management. Furthermore, it stated that it aims to convert fuel oil and diesel plants to run on LNG and vowed to eliminate the introduction of additional planned coal capacity.
Total installed capacity in 2016 was 4.0 GW with large hydro (1.4GW) and ‘non-conventional’ renewables (597MW) making up 49%. However, the phased construction of the 900MW Puttalam coal plant since 2011 has contributed to an increase in fossil fuels (including oil and diesel generation) to 2GW, or 51% of total capacity.
The country has been attempting to phase out its dependence on expensive imported oil and diesel generation. However, cuts to PPA agreements with these generators were stalled in 2016 after a severe drought in the central highlands led to a lack of dispatchable electricity generation available from its hydro reserves. The CEB has since been renewing PPAs to re-instate decommissioned backup generators, and has switched its focus from coal to more flexible and cleaner gas-fired generation in its long-term plans.
The CEB has also been expanding its grid (which is currently at 98% electrification) to exploit rich wind resources in the Northern Mannar basin. This will result in a three-phase development of a 375MW wind project: the first 100MW will be developed by the CEB, and requests for proposals (RFPs) will be offered to private sector developers in 25MW increments for the remaining 275MW. This project alone will more than triple the country’s current 127MW of installed wind capacity. 2016 saw important growth for solar PV in Sri Lanka, with 40 MW of grid-scale additions and an estimated 50 MW of rooftop mounted systems throughout the country. The government has set forth its ‘Battle for Solar’ program, which offers different schemes, including an attractive feed-in tariff for rooftop solar systems. 60 additional 1MW projects are currently being tendered by the CEB, although is unclear if the relative small scale of the projects will attract competitive offers.
The power sector in Sri Lanka is somewhat monopolistic, with the transmission and distribution companies completely state-owned. There is a significant presence of private players in generation, however, development permits have proved difficult to obtain due to authorization that is required from a number of relevant land and environmental agencies as well as from the CEB itself, which has cited concerns regarding system balancing and stability. The Sustainable Energy Authority is currently tasked with mitigating these barriers by helping developers identify sites, carry out feasibility and technical studies and ultimately obtain permits.