Fossil fuels, which primarily have been the cornerstone of industrial development and modern society for over a century, is well on its way to become the very reason for its eventual downfall. The environmental and economic costs associated with these fuels are alarming.

Fossil fuels emit Greenhouse Gases which trap heat, leading to global warming and climate change, besides of course adding to air pollution. Coal-fired power plants produce coal ash that can contaminate soil and groundwater if not properly handled. Fossil fuel power plants require substantial amounts of water and can lead to stress on local water resources. 

Then there is a societal cost as well through increased healthcare spending due to air and water pollution. Respiratory and cardiovascular diseases, asthma, lung cancer, and other health problems associated with pollution result in increased medical expenses, lost productivity, and premature deaths. A study by the International Monetary Fund (IMF) estimated that the global health costs of fossil fuel-related air pollution amount to trillions of dollars annually.

The economic costs of climate change, driven largely by fossil fuel emissions, are escalating. Extreme weather events such as hurricanes, floods, and droughts are becoming more frequent. The World Bank estimates that climate change could push an additional 100 million people into poverty by 2030. The costs of adapting to climate change, including building resilient infrastructure and disaster response systems, are immense.

Being a small economy island nation and one without fossil fuel resources, Sri Lanka is in a vulnerable position. Environmentally it will be impacted by climate change as sea level rises, and economically it can barely afford the ever-increasing fossil fuel import bill. For its long-term sustainability, it needs to pivot to renewable sources of energy. 

According to a joint study conducted by the United Nations Development Programme and the Asian Development Bank, Sri Lanka houses a potential of 16 GW solar power. The World Bank estimates Sri Lanka’s offshore wind potential is 92 GW.

The country has set an ambitious goal of achieving 70% renewable energy (RE) generation by 2030 and becoming carbon neutral by 2050. To put this in perspective, for FY24, fossil fuel-based power plants met 54% of total power generated in the country, and under 8% came from solar or wind, with hydro contributing 31%. 

In terms of installed capacity, as on 31 March, of SL’s generation capacity of 5,012 MW, ex of hydro, REs contributed barely 1093 MW, which is about a fifth of the total installed capacity. With limited scope of adding large-scale hydro projects in the future, it is the wind and solar projects which will have to do the heavy lifting for SL to meet its RE generation goals. 

Over the next 25 years, the country’s power demand is projected to grow at an annualized rate of ~5% and SL will need to add ~7,000 MW of fresh RE, mainly consisting of ~4,700 MW of solar and ~1,800 MW of wind power. 

Much of the additional capacity will need to come from the private sector as CEB won’t be able to fill the gap entirely on its own. Its own RE capacity has been rather stagnant at 100MW for years. Private sector power producers, also referred to as Independent Power Producers (IPP), have 163 MW of wind and 137 MW of solar currently. 

In terms of cost too, RE makes a lot of sense. The Government has negotiated a very competitive tariff of USC 8.26 or Rs. 24.78/ unit for a wind power project to come up in the country’s north. As per CEB data, in 2022, its own cost for thermal power (coal + fuel oil) was Rs. 26.65 per unit. It purchased power from thermal IPPS at average cost ranging from (for different IPPs) Rs. 49-130. So the alternative is clearly far more expensive, which besides draining out precious forex, also adds to GreenHouse Gas emissions. In 2022, CEB consumed 330 million litres of Fuel Oil and 2.3 million tons of coal. This money is permanently drained out of the country.

Policymakers and citizens need to look at the larger picture and set a clear roadmap to achieve the national goal of energy self-sufficiency and take all actions keeping this core objective in mind. 

(The writer is a Consultant specialised in Data Analytics with a Special Focus on Sri Lanka’s Future Direction, and in the fields of sustainable energy, investments and telecommunications)

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The views and opinions expressed in this article are those of the author, and do not necessarily reflect those of this publication