- Project suspension and rollback indicates policy inconsistency
- PUCSL points to delays in RE absorption, continued high cost of generation
- CEJ calls for thorough EIA to be conducted
Delays in critical power projects continue to exacerbate the country’s electricity cost crisis and cast a shadow over the island’s energy security as economic recovery gains traction.
The latest disruption came last week when President Anura Kumara Dissanayake ordered a temporary suspension of two wind power projects in Mannar — a 20 MW facility and a 50 MW extension — despite tenders being called and contracts already having been awarded.
The suspension, announced during a high-level meeting at the Presidential Secretariat, underscores a growing concern: repeated delays in power project implementation are directly pushing electricity bills higher for both households and industries.
The Mannar suspension illustrates the broader challenge facing Sri Lanka: the country has abundant renewable energy potential, yet administrative delays, local disputes, and regulatory bottlenecks are preventing these projects from delivering much-needed, affordable electricity.
It also casts doubt on the existing procedure to implement energy generation projects, as multiple projects have been either halted or delayed once they commenced for various reasons.
Costs and delayed projects
As highlighted in the Long-Term Generation Expansion Plan (LTGEP) 2025-2044, electricity from the Mannar wind projects could have been generated at just 4.65 US cents per kilowatt-hour (around Rs. 13), significantly lower than the 8.26 US cents per unit (around Rs. 25) proposed under stalled private initiatives such as the Adani wind farms.
It is noted that if these projects had proceeded as scheduled, Sri Lanka’s average electricity cost could have remained far more stable, preventing repeated tariff increases in recent years.
“The delay in renewable projects like Mannar translates directly into higher bills for consumers,” said a senior engineer attached to the Ceylon Electricity Board (CEB) on condition of anonymity. “Instead of tapping low-cost domestic energy, Sri Lanka is forced to rely on expensive fossil fuels, which increases generation costs and burdens households and businesses alike.”
Sri Lanka has faced persistent delays in Renewable Energy (RE) implementation for over a decade.
The Adani Group’s wind farms in Mannar and Pooneryn, which would have added nearly 484 MW to the national grid, collapsed amid prolonged tariff renegotiations, environmental clearance disputes, and local opposition. Similarly, over 100 solar projects expected to contribute approximately 500 MW remain stalled due to incomplete documentation, bureaucratic red tape, and regulatory hurdles.
The Public Utilities Commission of Sri Lanka (PUCSL) has repeatedly warned that delayed renewable and conventional energy projects have cost the country billions of rupees annually, with these losses ultimately reflected in higher electricity bills.
Suspension and implications for consumers
The recent suspension in Mannar highlights both the administrative and social complexities that contribute to project delays.
Local residents and religious leaders have raised concerns about potential environmental damage, disruption to fishing and agriculture, and flooding risks. Previous failures to implement environmental recommendations, particularly in relation to an ongoing ilmenite mining project, have also fuelled distrust.
Speaking during a meeting at the Presidential Secretariat in August, President Dissanayake stressed that energy projects must be implemented with consensus. “Energy is a national resource tied to electricity costs, industrial competitiveness, foreign investment, and overall economic growth,” he said, adding: “Development is essential, but it must also address local concerns.”
Energy Minister Kumara Jayakody announced that the Land Reclamation and Development Corporation would assess potential flooding, while the Department of Wildlife Conservation and Ministry of Land would jointly evaluate land-use issues. The suspension will last one month, during which authorities will aim to find solutions that balance energy development with social and environmental considerations.
The CEB engineer who spoke to The Sunday Morning stressed that construction delays would impact the country’s electricity bill. “Most of the projects were delayed due to weaknesses of policies and suspension of important projects.”
Environmental concerns
Commenting on the issue, Centre for Environmental Justice (CEJ) Executive Director Hemantha Withanage highlighted several critical concerns regarding the proposed project.
He stressed that the project could significantly exacerbate flooding in the surrounding areas due to potential alterations in natural water flow and drainage patterns.
Additionally, Withanage raised alarm about the potential impact on local bird populations, noting that the project could disrupt critical habitats and migratory pathways, threatening biodiversity and the ecological balance of the region.
The CEJ urged a thorough environmental assessment to ensure that these risks were properly evaluated and mitigated before any further steps were taken.
According to ‘Environmental Impact Assessment (EIA) for the Proposed 250 MW Mannar Wind Power Project (Phase II): Answers to Public Comments – May 2024,’ the project has been carefully designed to minimise environmental impacts while providing substantial local benefits.
Many turbines are located in areas prone to flooding; however, these areas are uninhabited and distant from human settlements. A comprehensive flood risk assessment was conducted using advanced 2D modelling to evaluate both project and no-project scenarios.
Mitigation measures, including the installation of culverts along access roads to prevent backwater effects, have been implemented. Notably, the density of culverts exceeds that of existing railroads and Class ‘A’ and ‘B’ roads in Mannar. The new access roads will not only facilitate project construction but also improve local mobility and enhance flood resilience in previously inaccessible areas.
In addition, the Sri Lanka Sustainable Energy Authority (SLSEA), in collaboration with the Sri Lanka Land Development Corporation, has initiated a flood risk minimisation project as part of its Corporate Social Responsibility (CSR) activities, it is stated.
Regarding vibration, potential impacts from construction activities, including piling, have been acknowledged. The nearest human settlement is approximately 258 metres from the construction site and only eight turbines are close to settlements.
Mitigation measures include the use of low-vibration construction methods near sensitive sites, pre- and post-construction building surveys, and prompt compensation for any damage. Operational vibration is expected to be minimal, with continuous monitoring and crack surveys planned, building on experience from Mannar Phase I, the report states.
The EIA process followed internationally accepted practices, integrating rapid assessment surveys, expert knowledge, literature reviews, and long-term studies on key components such as birds and bats. Public consultation was conducted over 30 working days, with most concerns addressed in the report.
Overall, the project is designed to prevent flood aggravation, manage vibration risks, and enhance local infrastructure, in full compliance with the terms of reference and best practices in environmental assessment, as stated in the report.
Renewable energy potential
Sri Lanka possesses significant RE potential, particularly in wind and solar power. According to the LTGEP 2025–2044, commercial wind power capacity reached 267 MW by the end of 2023. Solar power, including grid-connected and rooftop installations, contributed a combined 1,768 MW.
Hydropower, which remains the backbone of the national grid, generated 29% of total electricity in 2023, with CEB-owned hydro plants reaching 1,535 MW after the addition of the Uma Oya plant in 2024.
The Mannar region is particularly promising for wind energy. The 103.5 MW Thambapavani Wind Farm, the first large-scale CEB-owned offshore RE plant, began operations in 2020. Plans for a 50 MW extension were underway before the suspension. Existing transmission infrastructure would have allowed the project to be commissioned by 2026, providing a stable source of low-cost electricity.
If completed on schedule, these projects could have reduced the need for expensive fossil-fuel generation, helping stabilise electricity tariffs and alleviating the financial burden on households and industries.
How project delays drive up costs
Delays in renewable energy projects force the country to rely on more expensive alternatives. Fossil fuel-based generation, particularly from imported oil and Liquefied Natural Gas (LNG), carries significantly higher costs — often more than Rs. 25 per unit — compared to wind and solar projects. Each year of delay compounds the problem, as low-cost renewable energy is left untapped while existing thermal plants face overutilisation and higher maintenance expenses.
PUCSL reports have indicated that since 2018, delays in major projects — wind, solar, and LNG — have directly contributed to billions of rupees in annual losses. These losses translate into higher electricity tariffs, affecting everything from household budgets to industrial production costs.
The ripple effect is clear: delayed projects push up generation costs, which are passed on to consumers, creating a vicious cycle of rising electricity bills and economic strain.
Cross-border energy integration
The Mannar projects are also linked to a regional energy cooperation initiative with India, involving a High-Voltage Direct Current (HVDC) link between Madurai and Mannar. The first phase, estimated at $ 1.225 billion, involves a 2x500 MW Voltage Source Converter (VSC) system designed to stabilise the grid, facilitate cross-border power trade, and allow future capacity expansion.
Initially, the HVDC project was planned to terminate at Anuradhapura using overhead and undersea segments. Feasibility studies and joint consultations shifted the Sri Lankan termination point to Mannar, leveraging the region’s wind energy potential. VSC technology provides dynamic reactive power support, crucial for integrating intermittent renewable energy while maintaining grid stability.
However, technical complexity, environmental considerations, and cost concerns have contributed to delays, demonstrating how infrastructure bottlenecks directly affect power generation and electricity pricing.
Delays are not purely administrative; they intersect with social and environmental concerns. Residents in Mannar have highlighted the need for proper safeguards against flooding, disruption to livelihoods, and ecological degradation. Environmental assessments, land-use planning, and infrastructure projects such as the Kokilai Bridge reconstruction and the Mannar New Water Project aim to address these concerns.
The Mannar suspension reflects a recurring challenge in Sri Lanka’s energy policy: the inability to implement projects efficiently while accommodating social and environmental priorities. Every month of delay increases electricity costs, pressures the grid, and impacts households and businesses.
The broader pattern of delays
Sri Lanka’s power sector has faced persistent delays across multiple projects. Beyond Mannar, more than 100 small and medium solar initiatives remain stalled, while nearly 4,000 MW of proposed renewable capacity is awaiting approval. Large-scale fossil fuel projects, including LNG imports, are stalled due to missing storage and terminal facilities.
These delays are compounded by regulatory uncertainty, protracted negotiations, and policy inconsistencies. Weak governance and legal disputes prevent the country from harnessing low-cost domestic energy sources. Analysts warn that unless these issues are resolved, electricity bills will continue to rise, creating a long-term burden on both consumers and the national economy.
“The consequence of delays is clear – higher bills, greater reliance on imported fuel, and lost opportunities for sustainable growth,” a senior CEB engineer stressed. “Each delayed project pushes up costs for ordinary Sri Lankans.”