• 16 battery storage projects aimed at cutting fuel dependence, easing renewable curtailment
• 2050 fossil-free ambition rests on battery storage, grid upgrades, renewable build-out
• Govt. targets carbon-neutral power sector as battery systems enters national grid
• Battery storage network to absorb surplus solar power, curb reliance on thermal generation
• Questions raised over environmental oversight, alleged lack of EIA

The Government plans for sources of non-renewable energy to be gradually removed from the national grid by 2050 as Sri Lanka accelerates its transition towards a fully sustainable power sector. 

Deputy Minister of Energy Arkam Ilyas said that this target was part of a sweeping strategy to overhaul the national grid, eliminate structural reliance on imported fossil fuels, and establish total carbon neutrality. 

The foundational milestone of this transition is the deployment of the country’s first utility-scale Battery Energy Storage System (BESS) programme, which is designed to integrate fluctuating clean energy and safeguard national energy security against compounding global vulnerabilities.

Strategic fast-track of BESS

The National System Operator (NSO) executed a critical phase of this transition by finalising the country’s premier grid-scale standalone BESS programme. 

This initiative delivers a combined capacity of 160 MW and 640 MWh across 16 critical locations islandwide. The programme functions as an essential intervention to modernise the electricity network, enhance distribution flexibility, and displace high-cost thermal power generation during peak demand hours.

The procurement process was initiated during a period of escalating financial pressures on the domestic power sector. The international competitive bidding process was officially launched on 30 July 2025 to address volatile generation costs and strengthen systemic reliability. 

Recognising the urgent need to fortify the national grid, the NSO evaluated the incoming proposals on an expedited basis, culminating in the official award of the contracts to the lowest evaluated bidders on 14 October 2025. The formal Energy Storage Agreements (ESAs) were signed during the third week of April this year. 

The projects have now entered active implementation, with all 16 facilities scheduled to connect progressively to the national grid between September and December. By capturing surplus renewable energy generated during off-peak daytime hours and shifting it to meet the evening peak, the State aims to insulate the economy from global energy market disruptions, including the ongoing geopolitical crisis in the Gulf region.

Technical integration and grid stabilisation

The introduction of utility-scale storage addresses the technical constraints that have historically limited renewable energy absorption within the national network. Private developers are executing the 16 separate projects under three distinct corporate divisions. 

NSO Chairman Dr. Pradeep Perera detailed the structural layout of the implementation, noting: “There are 16 separate projects currently being executed across the island by three distinct companies.”

He added: “The first developer is responsible for implementing 13 of these projects, while the second company is handling two, and the final project is being managed by a third entity. Each developer was fully informed of their exact geographical assignments and grid entry points at the time the tenders were officially awarded.”

A primary concern among energy sector analysts was whether allocating grid space for these massive battery facilities would crowd out independent solar and wind developers. However, Dr. Perera dismissed these concerns, stating that storage allocations operated independently from active generation channels.

“The grid allocations designated for the battery systems and those assigned for solar generation are two entirely separate operational frameworks,” said Dr. Perera. “The implementation of a battery system does not restrict solar grid space. On the contrary, installing these batteries opens up substantial new grid capacity for solar developers. The storage network operates synergistically with generation rather than acting as a constraint upon it.”

Beyond basic capacity expansion, the storage units introduce critical power quality capabilities, including synthetic inertia and rapid system response, which are essential for managing the inherent variability of wind and solar resources.

Another senior official of the NSO, choosing to speak anonymously, told The Sunday Morning that in the event of sudden frequency drops or transient disturbances, the battery systems were engineered to respond instantaneously.

“The operational challenge stems from the fact that grid inertia directly requires real power,” the official claimed. “The battery systems are highly effective because they supply real power with an exceptionally fast response time. During a transient condition when the grid frequency begins to drop, the system can instantly inject active energy into the network.

“This intervention reduces the rate of frequency decline and stabilises the absolute frequency at a safe, predictable level based on the available capacity of the units. To ensure this level of performance, the NSO has mandated that all project inverters must be equipped with advanced grid-forming capabilities.”

Curtailing waste and shifting daytime surpluses

The core economic justification for the programme centres on mitigating daytime renewable energy curtailment, an operational inefficiency that occurs when generation outpaces consumer demand. 

This phenomenon is acute between 10 a.m. and 2 p.m., a window characterised by peak solar output and low system load. Millions of kilowatt-hours of clean energy are routinely wasted because the grid cannot absorb the excess generation.

“We are moving forward with these energy-shifting batteries specifically to resolve the ongoing issue of daytime renewable curtailment,” the senior official of the NSO said.

“Each individual battery unit features a capacity of approximately 40 MWh, combining across the 16 nodes to deliver 640 MWh of total storage. The system draws power directly from the grid during peak generation hours, meaning solar plants can operate at maximum output and pump their energy directly into the network. This stored energy is then held and systematically discharged into the grid during the high-demand evening peak.”

The current volume of curtailed energy highlights the necessity of this storage capacity. The NSO intends to expand the network to accommodate future generation projects.

“Our operational data indicates that between 300 and 400 MW of renewable energy are currently curtailed during the peak daytime hours of 10 a.m. to 2 p.m.,” the official observed. 

“To address this waste completely and prepare for future generation, we are preparing to launch a subsequent tender for an additional 250 MW system that will provide 1 GWh of storage capacity. We anticipate commissioning this expanded facility by 2027. Combined with our current programme, this will establish a total storage footprint of 410 MW and 1.6 GWh, which will reduce clean energy curtailment to an absolute minimum.”

The physical integration of these units has been planned to prevent overloading existing transmission infrastructure. The batteries will connect directly to local networks to capitalise on off-peak capacity.

“All of these battery units are being integrated at the distribution level,” the official added. “They are charged directly from the grid during the daytime and discharged when the local network experiences its night peak. Because solar generation drops off completely after dark, discharging the batteries at night utilises the existing thermal margins of our distribution lines when they are otherwise under-stressed.”

Environmental safeguards and regulatory oversights

While the clean energy benefits of the initiative are widely acknowledged, the scale of the deployment has drawn scrutiny from civil society organisations regarding long-term environmental accountability. The accumulation of thousands of industrial-scale lithium-ion cells introduces critical challenges concerning chemical degradation, lifecycle management, and final disposal.

Centre for Environmental Justice (CEJ) Co-Founder, Senior Counsel Dr. Ravindranath Dabare argued that emission reductions must not come at the cost of local ecological degradation, noting: “There are undeniable environmental benefits to reducing our reliance on thermal emissions, but these benefits cannot be evaluated in isolation from the lifecycle of the storage technology.”

He added: “We must establish a comprehensive, legally binding system governing the ultimate disposal of these battery banks. A primary concern is ensuring that the energy stored in these batteries is derived strictly from solar or other renewable resources. If we deploy large-scale storage systems simply to store energy generated by fossil fuels, the environmental justification fails entirely, and net emissions could increase. This dynamic must be studied with rigorous scientific oversight.”

Dr. Dabare also noted that public descriptions of renewable energy often ignored the distinct environmental impacts associated with different technologies. He pointed out that certain clean energy projects could cause significant local disruptions if poorly regulated.

“We must challenge the blanket assumption that all renewable projects are inherently benign,” he stated. “For example, mini-hydro developments frequently inflict severe, irreversible damage on localised aquatic ecosystems. In many instances, poorly planned mini-hydro projects cause greater long-term environmental devastation than conventional fossil fuels due to total habitat disruption, river fragmentation, and the endangerment of endemic fish species. We must apply strict, holistic metrics to every technology we introduce to the grid.”

A key regulatory concern raised by the CEJ is the potential lack of a statutory Environmental Impact Assessment (EIA) framework tailored specifically for battery storage facilities. Dr. Dabare noted that Sri Lanka’s existing laws were drafted primarily to regulate generation plants, leaving a legal ambiguity for standalone storage infrastructure.

“We have not received verification that proper, legally rigorous EIA assessments have been conducted for all 16 project locations,” he said.

“The underlying issue is whether standalone energy storage facilities are adequately covered under current statutory regulations. Our environmental laws explicitly account for generation infrastructure, but they do not clearly define or mandate assessments for large-scale storage systems. This regulatory gap is highly concerning, and we must resolve it immediately to ensure these sites are safe.”

Dr. Dabare emphasised that the distributed, islandwide nature of the projects required strict adherence to localised safety standards. Given Sri Lanka’s high humidity and sustained thermal profiles, storage facilities must incorporate robust safety mechanisms to mitigate the risk of thermal runaway or chemical contamination.

“Because these installations will be distributed across diverse ecological and climatic zones, the underlying technical specifications must be entirely transparent,” he said. “The Government must publish all technical parameters and secure active public consultation before completing these deployments. 

“This is a novel technology and an unprecedented operational concept for Sri Lanka, and we require independent expertise from both civil society and academia to evaluate the risks. We are currently reviewing the exact chemical compositions and safety mechanisms of the units slated for import, and our formal position will be articulated once these lifecycle studies are completed.”

Bureaucratic oversight and fast-track compliance

In response to concerns regarding regulatory gaps and fast-tracked approvals, Government administrators maintained that the procurement process met all necessary legal and procedural standards.

The Ministry of Energy claimed that accelerated timelines did not compromise structural oversight or environmental compliance. Ministry Secretary G.M.R.D. Aponsu emphasised that all regulatory steps were integrated into the execution phase.

“I can confidently say that all mandatory regulatory compliance steps are thoroughly completed before any project moves to execution,” he stated.

“When these international tenders are officially awarded, every required administrative and environmental step is legally finalised. Our review has revealed absolutely no procedural irregularities or omissions, and the programme has strictly adhered to the established legal framework governing national infrastructure developments.”

While assuring that preliminary authorisations were secure, Aponsu acknowledged that comprehensive, long-term policies for end-of-life battery management remained under active development.

“Regarding the specific, granular policies for long-term decommissioning, material recycling, and final disposal, those frameworks are not fully finalised at this exact moment,” he said. “Once the initial systems are fully integrated and operational, the ministry will outline the complete, long-term regulatory guidelines for asset lifecycle management.”

Economic resilience and 2030 sovereign roadmap

From a policy perspective, the State views the storage initiative as an economic intervention designed to insulate the country from external macroeconomic pressures. By deploying storage infrastructure to absorb domestic renewable energy, the Government aims to reduce its exposure to volatile international commodity markets and conserve foreign exchange reserves. 

Deputy Minister Ilyas confirmed that implementation schedules were progressing according to plan, noting: “The project developers have formally committed to completing the installation of the awarded storage systems within the next few months, and the initial shipments of hardware have already arrived at our ports.

“These storage facilities represent a critical component of our broader national strategy to achieve total energy independence and substantially reduce the outflow of foreign exchange currently consumed by fossil fuel imports.”

To complement the storage programme, the Ministry of Energy is advancing several large-scale renewable energy generation projects alongside critical transmission upgrades. These initiatives are designed to restructure the national grid from a centralised, fossil-dependent system into a decentralised, self-sustaining network.

“We have launched a series of strategic renewable generation projects, including the major wind power developments at Mullikulam and Mannar, alongside multiple utility-scale solar installations,” Ilyas stated. 

“We are also preparing to launch subsequent tenders for competitive renewable developments in Kondachchi and Pooneryn, which will include advanced floating solar arrays. To integrate this generation capacity safely, we are commencing major grid infrastructure upgrades centred on the construction of a 400 kV backbone transmission line that will fundamentally strengthen network stability and autonomy.”

In tandem with supply-side improvements, the Government is modifying consumer-side pricing mechanisms to better match demand with daytime generation profiles. The introduction of smart meters and flexible tariff structures aims to incentivise commercial and industrial consumers to shift their energy use to daytime hours.

“We are introducing comprehensive time-of-use tariffs alongside the widespread rollout of advanced smart meters for our consumers,” Ilyas said.

"These modernised digital systems will enable us to manage grid loads dynamically and encourage consumer efficiency. Our long-term strategic objective remains absolute: by 2030, Sri Lanka’s power grid will operate predominantly on indigenous energy resources, insulating our economy from geopolitical disruptions and fuel price shocks. 

“By 2050, we will achieve a 100% carbon-neutral energy network, systematically decommissioning the Norochcholai coal power plant and removing all legacy non-renewable assets from our grid.”