The newly elected Government of President Anura Kumara Dissanayake now faces the monumental task of determining whether to continue or revise the ambitious Renewable Energy (RE) plan introduced under former President Gotabaya Rajapaksa.
The plan, which set a goal for Sri Lanka to achieve 70% of its electricity generation from renewable sources by 2030, is undoubtedly ambitious. However, there are growing concerns about its practicality and the challenges that must be overcome to realise this vision.
Sri Lanka’s energy transition plan, as laid out by the Rajapaksa Government, outlined a bold shift towards RE, aiming for the country to generate 70% of its electricity from renewable sources by the decade’s end. This target required an aggressive expansion of RE infrastructure, including solar, wind, hydro, and biomass.
However, realising this target has proven to be fraught with delays, bureaucratic roadblocks, and logistical challenges.
One of the most significant hurdles in achieving the 70% RE target is the urgent need to revamp the country’s ageing transmission grid.
A senior engineer from the Ceylon Electricity Board (CEB), speaking on condition of anonymity, pointed out that the current grid infrastructure was ill-equipped to handle the significant influx of RE that would be required.
The transformation of the grid alone is projected to cost billions of dollars. The Ministry of Power and Energy has already issued a circular mandating that licences for RE projects be granted only to those with secure land and funding, further complicating progress.
The CEB has also raised concerns about integrating more RE projects into the existing transmission network. Currently, grid concurrence has been a bottleneck, with more than half of the RE projects licensed by the Sri Lanka Sustainable Energy Authority (SLSEA) delayed due to the inability to secure land or financial backing.
Will the new President stay the course?
Solar Industries Association (SIA) President Kushan Jayasuriya is cautiously optimistic. While the newly elected Government is yet to outline its stance on the RE plan, he hopes the existing framework will be allowed to continue with minor revisions.
“We hope and pray that the plan, which is already in place and available in the public domain, is going to continue,” Jayasuriya said.
He also acknowledged that any abrupt changes to the policy could destabilise the solar industry, particularly rooftop solar installations, which have been the fastest-growing segment in the RE sector.
Jayasuriya further emphasised the importance of maintaining the current incentives for RE investments.
“We hope they will make it more practical rather than making significant changes. The incentives that prevail should not be hindered. That is the least they can do.”
A massive investment burden
According to SLSEA Chairman Ranjith Sepala, the Long-Term Generation Expansion Plan (LTGEP) has outlined a roadmap for achieving the 2030 RE targets.
However, the estimated cost for the required RE generation, storage, and transmission infrastructure is a staggering $ 11.2 billion. The LTGEP envisions a mix of solar, wind, hydro, biomass, natural gas, and coal by 2030, but the road ahead is challenging.
The National Audit Office (NAO) has also revealed that only a fraction of the approved RE projects has been integrated into the national grid. Of the 1,374 RE projects awaiting grid concurrence, only six projects, totalling 6 MW, were added to the national grid as of the end of 2019.
Experts have pointed to a lack of political will and the inefficiency of existing approval processes as the main reasons for the delays. Many developers have found it difficult to secure land and funding, and a considerable number of projects have been stalled due to disagreements over competitive bidding and price negotiations.
Further complicating matters is the controversy surrounding the Adani Green Energy wind power project in Mannar and Pooneryn; a petition challenging the project’s procurement process and environmental impact has raised concerns about transparency and inflated pricing.
The Technical Evaluation Committee (TEC) had recommended a tariff rate of $ 0.05 per kilowatt-hour (kWh), but the negotiated rate was $ 0.0826 per kWh, which critics argue will lead to significant financial losses for the country.
The project’s controversy has fuelled calls for competitive bidding and transparency in the approval of large-scale RE projects.
The CEB Engineers’ Union (CEBEU) has also expressed concerns about the integration of RE projects with private sector involvement, citing issues with cost-effectiveness and excessive profits for developers.
A critical decision
As the Dissanayake Government settles into office, it will soon face a critical decision: whether to continue the previous administration’s RE plan or make significant changes.
According to a senior Government official who wished to remain anonymous, given the substantial investment required and the logistical challenges of modernising the grid, the new Government may need to adopt a more pragmatic approach.
One option could be to slow down the transition timeline and prioritise grid upgrades, while another might be to seek international funding to fast-track RE integration. Either way, the decisions made in the coming months will determine whether Sri Lanka can meet its 2030 target or if the country will need to rethink its RE ambitions altogether.