Powering the way forward

Friday, 21 April 2023 00:00 -     - {{hitsCtrl.values.hits}}

With rising energy demand, limited domestic energy supplies, and a heavy reliance on fossil fuel imports, Sri Lanka’s energy industry has faced considerable problems in recent years. Just yesterday, Power and Energy Minister Kanchana Wijesekera revealed that the highest daily energy demand in Sri Lanka in recent times was recorded. 

In response to these issues, the Sri Lankan Government has implemented a number of reforms and measures aimed at diversifying the country’s energy mix and reducing dependency on imported fossil fuels. To comprehend this, a thorough understanding of the Sri Lankan energy industry, including its structure, policies, and development plans, is essential.

The thermal power industry dominates the Sri Lankan energy sector, accounting for around 75% of total energy consumption in the nation. Power plants predominantly supply the sector, which is fuelled by imported fossil fuels, mostly coal and oil. Hydro and non-conventional renewable energy sources provide for the remainder about 25% of energy usage.

To address the country’s energy difficulties, the Sri Lankan Government has developed a number of energy policies and development programs. The Government intends to generate 70% of the country’s power from renewable sources by 2030, essentially flipping the current renewable to the non-renewable power mix. 

While this is largely in line with supranational agreements on commitments to sustainable energy and conservation efforts, it also proves to be cost-effective. With the rapid development of renewable energy technology, the effective yield on such a source is more efficient and almost two-thirds as cost- effective than fossil fuel in comparison. 

In addition, the Government has set a goal of attaining 2000 MW of installed renewable energy capacity by 2025, which will comprise 1,000 MW of solar, 500 MW of wind, 400 MW of mini-hydro, and 100 MW of biomass. With just under 2 years to go, many public-private partnerships need to be underway to realise this objective.

To meet these goals, the Government has put in place a number of initiatives, including the launch of a net metering scheme to encourage rooftop solar installations, the establishment of a feed-in-tariff system to encourage the development of small-scale renewable energy projects, and the implementation of a competitive bidding process for large-scale renewable energy projects. 

In addition to boosting renewable energy, the Sri Lankan Government is working to minimise energy consumption through energy efficiency initiatives. Several energy efficiency measures have been initiated by the Government, including the application of construction regulations and standards, the promotion of energy-efficient lighting and appliances, and the installation of energy management systems in industrial and commercial buildings.

Despite the Government’s attempts to encourage renewable energy and energy efficiency, the Sri Lankan energy industry still faces a number of issues. The high cost of renewable energy in comparison to fossil fuels is one of the major issues. It is attributed to a number of problems, including a lack of economies of scale, insufficient regulatory frameworks, and a scarcity of funding choices.

Another issue confronting the Sri Lankan energy sector is the country’s limited domestic energy supplies. Sri Lanka has little hydroelectric production capability, while the country’s wind and solar resources have yet to be completely used. Furthermore, the country’s geothermal and biomass resources are generally underutilised.

Despite these obstacles, the Sri Lankan energy sector offers numerous potential for investment and expansion. The Government’s emphasis on renewable energy and energy efficiency has produced an atmosphere conducive to renewable energy investment, notably in the solar and wind industries. The Government of Sri Lanka has also opened the hydrocarbons industry.