Sri Lanka’s electricity demand is projected to increase by 36% between 2015 and 2020. In order to meet this demand, the state-run utility Ceylon Electricity Board (CEB) has set out a detailed long-term generation plan that commits to another 960MW of renewable projects in its base case scenario. This capacity will be achieved with state funding through the CEB as well as via a system of competitive open bidding for on-grid projects, which replaces the retired feed-in tariff.
In 2008, the country set a target of 20% of total generation from renewables by 2020 and, so far, the country is ahead of schedule with 11% of total generation coming from renewables in 2015. This progress, along with significant government support, has led to a request from the Public Utilities Commission (PUCSL) to the CEB for a revised power plan that would exceed the current base case renewable generation target.
Total installed capacity in 2015 was 3.8GW with large hydro (1.4GW), small hydro (307MW), wind (116MW), biomass (20MW) and solar (1MW) making up 48%. However, the phased construction of the 900MW Puttalam coal plant since 2011 has contributed to an increase in fossil fuels (including oil and diesel generation) to 2GW, or 52% of total capacity. The country has been attempting to phase out its dependence on expensive oil and diesel generation. However, negotiations on power purchase agreements (PPAs) with these generators stalled in 2016 after a severe drought in the Central Highlands led to a lack of dispatchable electricity from its hydro plants. The CEB has since been renewing PPAs to reinstate decommissioned backup generators, and has switched its focus from coal to more flexible and cleaner gas-fired generation in its long-term plans.
The CEB has also been expanding its grid (which is currently at 98% electrification) to exploit rich wind resources in the northern Mannar Basin. This will result in a three-phase development of a 375MW wind project: the first 100MW will be developed by the CEB, and requests for proposals (RFPs) will be offered to private sector developers in 25MW increments for the remaining 275MW. This project alone will more than triple the country’s current 127MW of installed wind capacity.
With only 1.3MW of capacity, solar has been somewhat overshadowed by the other renewable sources as developers opt for cheaper wind and small hydro projects instead. However, in March 2016, Laugfs Power announced a 20MW PV plant in the southern Hambantota province, which will be the first significant utility-scale solar project in the country.
The power sector in Sri Lanka is somewhat monopolistic, with the transmission and distribution companies completely state-owned. There is a significant independent power producer presence in generation. However, development permits have proved difficult to obtain as authorisation is required from a number of relevant land and environmental agencies, as well as from the CEB itself. The Sustainable Energy Authority is tasked with trying and mitigate these barriers by helping developers identify sites, carry out feasibility and technical studies and, ultimately, obtain permits.
Sri Lanka scored 1.38 in Climatescope 2016, a slight improvement on its score the previous year. Nevertheless, it dropped two places to 27th on the list of countries overall. Its strongest performance was on Low-Carbon Business & Clean Energy Value Chains Parameter III.
On Enabling Framework Parameter I, Sri Lanka’s score increased and it gained two places to rank 38th. The score was supported by its clean energy policies, such as net metering, but limited by the lack of a clean energy rural electrification programme and energy access policies.
Sri Lanka’s score on Clean Energy Investment and Climate Financing Parameter II fell and it dropped fourteen places down the order to rank 25th. This chiefly reflected the absence of any new investment, loans or grants in the sector in 2015.
On Parameter III, the country’s score was marginally lower than in 2015, unchanged at 12th place. The relatively high number of value chains and service providers was offset by a lack of activity in the distributed energy sector.
On Greenhouse Gas Management Activities Parameter IV, Sri Lanka’s score increased sharply and it climbed seventeen places to rank 28th. Its solid performance was largely due to the introduction of a raft of carbon policies, including a GHG emissions reduction target.
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