• Projects issued with licences delayed due to lack of required lands and finances 
• Out of 1,374 projects, 50% submitted without securing necessary lands or funding
• Only 6 out of 144 applications received by SLSEA completed by end-2019, NAO reveals

Approval of nearly half of the Renewable Energy (RE) projects for which the Sri Lanka Sustainable Energy Authority (SLSEA) has already issued licences has been delayed for more than five years due to a lack of essential land and financial backing, The Sunday Morning learns. 

It is learnt that this shortfall has led to a substantial delay in integrating these projects into the national grid.

According to the SLSEA, out of 1,374 RE projects currently pending grid concurrence from the Ceylon Electricity Board (CEB), approximately 50% have been submitted without securing the necessary land or funding.

SLSEA Chairman Eng. Ranjith Sepala said: “We have previously issued licences for projects without secured land, but that policy has changed. Now, any RE investment must include a plot of land and proof of a funding source.”

He also said the authority had expedited the process to obtain grid concurrence for the pending RE projects that had already met the required documentation.

As he explained, in response to the growing backlog, the Power and Energy Ministry has issued a circular mandating that licences will only be granted to projects that can demonstrate both adequate land facilities and secure financial backing.

Additionally, Sepala noted there had been delays in granting grid concurrence by the CEB for RE projects. “Previously, they gave permission only for the number of projects that matched the grid capacity. However, the ministry Secretary has advised the CEB to allow additional projects to proceed, even if they exceed the grid capacity, as only a few of the initially agreed projects ultimately come to fruition,” he stressed.

“Following the land and funding screening, we have prepared a new lineup of projects,” Sepala said.

NAO revelations 

As of last year, more than 1,300 projects have been stalled for over five years since the issuance of Letters of Intent (LOIs) in 2017. Despite this, the SLSEA has expedited the process for projects that meet the necessary documentation requirements. However, progress remains limited.

Meanwhile, the National Audit Office (NAO) has revealed concerning figures regarding the progress of these projects.

According to the NAO, SLSEA had received applications from developers with funding for the construction of 144 power plants, including solar and small hydropower plants. The combined capacity of these applications had been 699.96 MW, and the SLSEA had collected Rs. 42,233,000 in application fees. Yet, by the end of 2019, only six out of 114 awarded projects, totalling 6 MW, had been added to the national grid.

The audit report further highlighted that only two wind power plants were currently under construction. Despite applications for adding 60 MW of capacity to the grid, two 20 MW solar power projects had been halted due to land acquisition difficulties. Additionally, 58 projects ranging from 0.03 MW to 10 MW had been stalled due to various reasons, resulting in a failure to add 129.75 MW to the national grid.

The audit also highlighted that 1,374 projects with a combined capacity of 4,014.85 MW had been temporarily approved by the SLSEA between 1 January 2017 and 31 December 2019. However, these projects had faced setbacks as the CEB rejected agreements due to competitive bidding. Thirty projects had been suspended at the final stage of agreement signing and 130 projects that had received temporary approval had also been halted. This disruption had stemmed from the sudden suspension of the existing system in 2017.

RE policy and plans

In September 2021, the Government set a policy to maximise the development of indigenous electricity resources. The policy, outlined in the ‘General Policy Guidelines in Respect of the Electricity Industry,’ was approved by the Cabinet in November 2021 and issued by the Power Ministry in January 2022. 

This policy envisions achieving 70% of electricity generation from renewable sources by 2030. To meet this goal, an additional 5,766 MW of renewable power capacity is required from 2023 to 2030. This includes 151 MW from major hydro, 175 MW from mini hydro, 3,805 MW from solar, 1,475 MW from wind, and 160 MW from biomass.

According to the Long-Term Generation Expansion Plan (LTGEP), the 2030 energy mix should comprise 24.7% solar, 15.5% wind, 24.6% hydro, 4.7% biomass, 10.56% natural gas, and 20% coal. The estimated investment required for renewable energy generation, storage, and transmission infrastructure from 2023 to 2030 is approximately $ 11.2 billion.

In response to the policy, the CEB has identified four short-term key projects: a 50 MW Mannar wind power project extension, a 250 MW Mannar wind power project, a 100 MW Pooneryn wind power project phase I, and a 50 MW Sampur solar project. However, there are concerns about the integration of these projects into the existing transmission network.

Concerns 

A senior CEB official, who wished to remain anonymous, alleged that the SLSEA had been issuing licences to RE developers without first consulting the CEB regarding the grid’s capacity to accommodate these new energy inputs.

This oversight has led to significant challenges in integrating many projects into the transmission network. The SLSEA is under considerable pressure from developers who have made substantial investments based on the granted licences, creating a bottleneck in the process, according to the official.

Recently, the Ceylon Electricity Board Engineers’ Union (CEBEU) raised concerns regarding the evaluation of renewable energy projects involving private sector participation. It stressed the need for these projects to align with regional standards, be cost-effective, and avoid excessive profits for developers.

The union has also claimed that the CEB was deviating from its original RE plan as outlined in the LTGEP 2023-2042, which projected a cumulative capacity of 2,553.665 MW from 333 projects during this period.