By Maheesha Mudugamuwa
Uncertainty looms over the future of the country’s renewable energy sector as local developers move away from investing in new projects following the introduction of a new tariff mechanism, The Sunday Morning learns.
Renewable energy expert and Solar Industries Association (SIA) Secretary Lakmal Fernando claimed that developers were afraid the projects would incur losses given the extremely volatile economic situation the country was currently experiencing.
Fernando expressed concern that the renewable energy sector would face a serious setback in the near future due to not having enough projects added to the grid and that the existing energy crisis could become more severe in the near future.
Sri Lanka is currently facing a severe power crisis with a shortage of around 300 MW of energy in the national grid due to the failures of successive governments to construct scheduled power plants to meet the ever-increasing energy requirement of the country.
Shifting to renewable energy
As construction of the already-delayed, scheduled power plants takes time, public discussion has been underway on shifting to renewable energy resources, mainly solar power. The Government has amended the existing Electricity Act to enable a smooth transition by adding more small-scale power projects too.
However, as learnt by The Sunday Morning, the renewable energy sector is yet to achieve considerable development since Electricity Act amendments, as only around three small-scale projects have been given permission to go ahead, out of the 42 project proposals sent to the Ceylon Electricity Board (CEB).
Warning of serious setbacks
According to Fernando, the tariffs the Government intends to fix will not attract new investors and as a result, the sector will face serious setbacks in the future. “Now they are going to take this tariff of Rs. 34.50 and Rs. 37 forward. About 40 MW has already been done and they are awaiting a tariff hike to connect it to get the advantage of the new tariff. Only these 40 MW will be connected and there won’t be anything connected to the grid thereafter,” he said.
Sri Lanka could lose opportunities in the renewable energy sector and as a result the CEB would continue to incur huge losses in the future as well, Fernando warned.
“No one can irrationally say something and take it to the Cabinet and make it the law. As a country we will lose; the CEB will lose in the short, medium, and long term. They are going to replace this with fossil fuel-based energy which is around Rs. 100 per kWh,” he said.
Elaborating further, Fernando stressed that in spite of the situation, if authorities took forward the newly-introduced unviable tariff, it would show that they were not committed to establish a renewable energy based future for the country.
“If you look at the overall perspective of the renewable energy behaviour in Sri Lanka over the last six to seven years, out of the 1,300 MW NCREs connected to the grid, 630 MW has been connected from rooftop solar and out of this over 50% comprises net plus. If somebody thinks that they can take this renewable development ahead without rooftop solar, they are in their own fantasy world,” Fernando said.
“We are trying to forget what has happened in the past and trying to give a different dimension to the industry and the business. This is not going to happen,” he stressed.
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Three-tier tariff options suggested by the committee
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The Renewable Energy Resource Development Plan
The Renewable Energy Resource Development Plan 2021-2026 developed by the Sri Lanka Sustainable Energy Authority (SLSEA) focuses on the implementation of large-scale renewable energy projects.
The projects that have been developed in the past periods, i.e. through a feed-in tariff scheme at the initial stage and through competitive bidding at later stages, are of the capacities up to 10 MW connected to the national electricity grid at the medium voltage (33 kV) level. The Renewable Energy Resource Development Plan has mainly focused on projects in the range of 100 MW capacities, which are to be connected to the grid at high voltage levels (132 kV, 220 kV).
In addition to the land-based large-scale projects, offshore wind power potential and floating solar power potential have also been included in the plan. Wave energy resource potential has been focused on as an emerging energy source in the country. Planned Energy Park projects for the project development period of 2021-2026 have been included in the plan. The plan is expected to be reviewed and updated once every three years.
However, when contacted by The Sunday Morning, CEB Chairman N.S. Ilangakoon said the CEB had already signed three projects out of 42 project proposals. “Yet another 23 are still pending and require documentation in place. They have been sent after granting energy permits for 42 projects. Out of that we have signed three while 23 are pending required documents from the developer’s side. Out of that 23, nine had partially completed their papers. The rest of the people have to complete their papers and there are about 17 or 18. We still couldn’t do anything because they are very old and we are still looking into their history; no sooner that is done we will sign 42,” he said.
Ilangakoon also noted that the CEB was finalising 157 projects right now. “They are all small-scale projects of around 1 MW,” he said.
When asked about mega investments, the Chairman said the big developers like Indian-based Adani were given provisional approval and they were engaged in preliminary work.
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| Tier 1 (year 1-8) | Tier 2 (year 9-15) | Tier 3 (year 16-20) | |
| Mini hydro | Rs. 32.28 | Rs. 17.52 | Rs. 11.95 |
| Wind | Rs. 29.79 | Rs. 14.99 | Rs. 9.89 |
| Solar | Rs. 33.74 | Rs. 16.98 | Rs. 11.21 |
| Biomass | Rs. 17.92 | Rs. 9.02 | Rs. 5.95 |
| Agricultural and industrial waste | Rs. 17.92 | Rs. 9.02 | Rs. 5.95 |
| Municipal solid waste | Rs. 57.02 | Rs. 28.69 | Rs. 18.94 |
| Excess power from agri/industrial waste of same industry | Rs. 13.44 | Rs. 6.76 | Rs. 4.46 |