Sri Lanka has an enormous renewable energy potential. The country has an ambitious target of meeting 70 per cent of its electricity needs through renewables by 2030 and 100 per cent of its electricity needs through renewable energy by 2050. As of 2020, the contribution by renewable energy power plants amounted to 36.8 per cent of the total generation. The major hydropower plants contributed 24.9 per cent, while non-conventional renewable energy (NCRE) plants contributed 11.9 per cent.
Towards increasing the renewable energy share in its electricity mix, the country is taking a number of initiatives. Solar energy is being seen as the most promising energy source towards its goal of 100 per cent generation from renewables. Accordingly, one of the key steps that the country undertook for scaling up the country’s solar capacity was the launch of a tender for a 100 MW solar park in the country. The 100 MW solar park project is going to be implemented in Monaragala district. The Sri Lanka Sustainable Energy Authority and the Ceylon Electricity Board (CEB) are implementing this project. The wind energy segment also saw significant activity in 2022 in Sri Lanka.
A look at the key developments in Sri Lanka’s renewable energy segment…
The case of solar energy is promising in Sri Lanka. According to a recent joint study conducted by the United Nations Development Programme and the Asian Development Bank, Sri Lanka houses a potential of 16 GW solar power. Sri Lanka had 434 MW of installed solar power as per International Renewable Energy Agency figures by the end of 2021. Sri Lanka seeks to add 1 GW of solar power by the end of 2025.
In August, 2022, the CEB launched a tender to develop a 100 MW solar park in Siyambalanduwa in Monaragala district of Uva province. The total estimated cost of the project is LKR 17 billion. It will deliver 180 GWh of clean energy annually at a 20 per cent plant factor. The project will reduce the annual fossil fuel imports bill by LKR 56.5 billion during 20 years of the project’s life, at LKR 19 per kWh average cost of fuel used for power generation.
Besides the solar park tender, in September 2022, the CEB launched another tender pertaining to the establishment of 30 MW of solar capacity in the country. The project aims to install five ground-mounted and floating solar projects ranging between 2 MW and 10 MW in capacity, to be allotted on a build-own-operate basis.
Meanwhile, in March 2022, India and Sri Lanka signed an agreement to develop a 100 MW solar power plant in the eastern port district of Trincomalee, Sri Lanka. The task shall be carried out via a joint venture and shareholders’ agreement for Trincomalee Power Company Limited, which is a joint venture between India’s NTPC Limited and the CEB.
In 2019, the World Bank estimated Sri Lanka’s technical offshore wind potential to be 92 GW, of which 55 GW is for bottom-fixed and 37 GW for floating technology.
In March 2022, India agreed to develop three wind projects in the Palk Strait, which had been abandoned by Chinese investors.
In August 2022, the Indian major, Adani Green Energy Limited was issued provisional approvals for two wind projects in Sri Lanka in the towns of Mannar (286 MW) and Pooneryn (234 MW). These projects are expected to entail an investment of over $500 million.
In November 2022, it was announced that the Offshore Wind Development Roadmap for Sri Lanka is being finalised and is due to be published in 2023. Sri Lanka houses offshore wind resources that far exceed its energy demand, which implies that by 2030 the country can easily achieve its target of 70 per cent and replace fuel imports. Reportedly, Sri Lanka seeks to establish its first offshore project in the Gulf of Mannar, with nearly 252 MW of capacity.
Challenges and outlook
While the country still relies heavily on hydro, thermal and coal power, there has been a constant effort to encourage green energy generation. Solar and wind energy are gaining ground. Sri Lanka has already raised the price of rooftop solar to encourage generation and is actively allotting tenders for solar plants. Further, Sri Lanka is considering hiking competitive tariffs offered to renewable power producers to complete projects at the previously competitively tendered rate after a currency crisis, which is a welcome move for international investors. With these strategic moves, a lot of changes are expected in the renewable energy segment in Sri Lanka.