Despite ambitious goals to achieve 70% of its total electricity needs through renewable energy by 2030, Sri Lanka has made limited progress, securing only 150 MW of renewable energy capacity so far (August 2023).
It is learnt that many of the proposed projects are still in the evaluation stage, and their timelines for commencement have been set for the coming year.
This indicates that Sri Lanka is behind schedule in reaching its renewable energy targets and concerted efforts will be needed to accelerate the transition to renewable energy sources in the country.
According to the Ceylon Electricity Board (CEB), the country needs a total of 5,766 MW of renewable energy capacity to reach its 70% target by 2030. To make substantial progress, at least 2,728 MW should be added to the grid by 2026. This includes contributions from various sources, such as 1,795 MW from solar PV, 575 MW from wind power, 90 MW from mini hydro, 80 MW from biomass, and 188 MW from major hydro projects.
The current policy for the electricity industry is given in the ‘General Policy Guidelines on the Electricity Industry’ document, as approved by the Cabinet of Ministers in November 2021 and issued by the Power Ministry in January 2022.
Planned projects
Despite recent reviews of plans by Power and Energy Minister Kanchana Wijesekera revealing that most of the proposed projects are still in the evaluation stage, the exception is the 150 MW ground-mounted solar project in Hambantota, which is being carried out by a consortium of local developers and is expected to be connected to transmission lines by December 2024. This project is also designed to attract potential investors and increase generation capacity up to 300 MW.
Among the projects awaiting implementation is a 500 MW wind project in Mannar and Pooneryn, led by Adani Green Energy, with a targeted completion date of January 2025. Achieving this goal is contingent on obtaining Government approvals and securing Power Purchase Agreements (PPAs) by the end of September this year. Additionally, the same company will be responsible for constructing a crucial 400 kV transmission line for the project.
Another 700+ MW ground-mounted solar project with battery storage in Poonakary is expected by March 2024, pending necessary approvals for transmission lines. Approximately 134 MW of this capacity will directly link to the national grid, capable of providing up to 700 MW of electricity through energy storage.
In Siyambalanduwa, a 100 MW ground-mounted solar project with battery storage is in progress, led by the consortium of Lakdhanavi Ltd., Windforce PLC, and Blue Circle (Pte) Ltd. Completion is anticipated by the end of 2025, concurrent with the construction of the required transmission line system.
Additionally, there is a 100 MW ground-mounted solar project in Batticaloa by Solar Forge, aiming for completion by 2025, subject to necessary approvals and the conclusion of the construction of a transmission line by October 2023.
Lastly, a collaborative effort between the CEB and NTPC of India is underway in Sampur, involving a 130 MW ground-mounted solar project. This project will unfold in two stages, with the first phase adding 50 MW to the national system in 2025, along with the necessary transmission line infrastructure. Financial investment for the project will be facilitated through credit facilities provided by the Asian Infrastructure Investment Bank (AIIB).
Need for renewable energy
The CEB has outlined a comprehensive plan in its ‘Report of the Way Forward of Integration of Renewable Energy Resources to the National Grid from 2023 to 2026 by means of Appropriate Business Models’. This report highlights the necessity of substantial renewable energy capacity additions to achieve Sri Lanka’s goal of generating 70% of its electricity from renewable sources by 2030.
According to CEB analysis, in order to meet the 70% target, Sri Lanka needs to add a total of 5,766 MW of renewable power capacity from various sources during the period 2023-’30. This includes 151 MW from major hydro projects, 175 MW from mini hydro, 3,805 MW from solar, 1,475 MW from wind, and 160 MW from biomass.
In line with the Long-Term Generation Expansion Plan (LTGEP), the energy mix for 2030 is projected to consist of 24.7% solar, 15.5% wind, 24.6% hydro, 4.7% biomass, 10.56% natural gas, and 20% coal. The estimated total investment required during the period 2023-’30 for renewable generation capacities, storage solutions, and associated transmission infrastructure is $ 11,200 million. Additionally, the natural gas-driven thermal generation fleet would necessitate an investment of $ 1,001 million.
To expedite progress, it is estimated that approximately 2,500 MW of additional renewable energy capacity, including rooftop solar, could be integrated into the national grid 2026.
The identified candidate projects to be implemented during the 2023-’26 timeframe encompass a wide range of initiatives, including ongoing projects awarded through competitive tendering, future projects slated for competitive tenders, projects with Standardised Power Purchase Agreements (SPPAs) signed with CEB before 2017, projects holding Sri Lanka Sustainable Energy Authority (SLSEA) energy permits, and those with SLSEA Provisional Approvals (PAs) expecting to obtain Letters of Intent (LOIs) from the CEB.
Additionally, projects with SLSEA PAs and Expressions of Interest (EOIs) for specific locations are also anticipated to gain initial CEB grid interconnection concurrence under negotiated tariffs for implementation.
Challenges
A senior CEB engineer, who wished to remain anonymous, shed light on the challenges facing Sri Lanka’s renewable energy projects.
Speaking to The Sunday Morning, the engineer emphasised that the majority of large-scale projects were still in the evaluation stage or awaiting various approvals. This situation has led to delays in the implementation of these crucial projects.
One of the key issues highlighted by the engineer was the need for significant expansion and improvement of the transmission line infrastructure to accommodate the additional renewable energy capacity required to reach the 70% target. This expansion entails not only technical considerations but also sourcing the necessary financial resources.
The engineer pointed out that while there were plans to integrate more renewable energy into the existing grid, the projects submitted to the CEB had encountered numerous challenges, primarily related to obtaining the required approvals. These delays in approvals and regulatory processes have been a significant hindrance to project execution.
The engineer also clarified that, contrary to claims that the CEB was responsible for project delays, the board’s hands were often tied because the projects submitted to it lacked the essential approvals and clearances needed for progress.
Auditor General’s recommendations
Meanwhile, a recent report issued by the Auditor General’s Department on the evaluation of the process of developing new renewable energy sources in Sri Lanka sheds light on several critical issues hindering the progress of renewable energy projects in the country.
It highlights critical issues in the development of renewable energy sources in Sri Lanka and provides valuable recommendations to address these challenges effectively, ultimately advancing the country’s renewable energy agenda.
One of the key findings of the report is the substantial delay in 1,374 projects that were licensed for electricity generation and had received LOIs for electricity purchase agreements with the CEB since January 2017. These delays have cumulatively reached up to three years by 2022, indicating a significant setback in achieving renewable energy goals.
To address these delays, the Auditor General’s Department has recommended the establishment of a mechanism to prevent approval-related delays by coordinating with relevant institutions. Streamlining the approval process is crucial to expedite project commencement.
Additionally, the report underscores the importance of long-term planning for the country’s energy generation needs. It recommends that the CEB’s 20-year Long-Term Generation Plan, updated every two years, should include measures to prevent power shortages in situations such as droughts, power plant inactivity, and increased demand.
The report also highlights issues with power transmission systems and transmission lines, which have led to delays in both large-scale and small-scale renewable energy projects. Prioritising infrastructure development activities is recommended to address these challenges effectively.
Furthermore, the report calls for the encouragement of entrepreneurs in the renewable energy sector through the introduction of tax relief and concessionary tariff rates. While there have been amendments to provide tax concessions for projects generating at least 100 MW of solar or wind power, the report emphasises the need to extend such incentives to small-scale renewable energy projects, including small-scale hydropower and biomass projects. This inclusive approach aims to motivate and support a broader spectrum of renewable energy entrepreneurs, contributing to the country’s renewable energy goals.
The CEB on renewable energy
CEB Chairman Nalinda Illangakoon emphasised that these projects were indeed making progress and that measures would be taken to expedite their implementation, aligning with the planned objectives.
He also clarified that the delays were primarily attributed to the time-consuming process of obtaining approvals from various institutions, emphasising that the CEB was actively working to mitigate these delays.
He reiterated that the CEB was not responsible for any delays in renewable energy projects while clarifying that the board was actively executing a short-term renewable energy plan aimed at adding approximately 2,500 MW of energy to the national grid by 2026. This initiative involves making minor adjustments to the transmission network to facilitate the integration of renewable energy sources.
Illangakoon emphasised the technical complexity of this endeavour, emphasising the need for careful handling.
He also highlighted the importance of meticulous planning to achieve the Government’s ambitious target of sourcing 70% of the country’s energy from renewable sources by 2030.
In a similar vein, Power and Energy Ministry Secretary M.P.D.U.K. Mapa Pathirana assured that all projects were advancing according to the established plans, and that there were no significant delays.
He expressed confidence in meeting the renewable energy targets, underscoring the commitment of the ministry to achieving these goals.