Powering Sri Lanka’s Clean Energy Transition - Priyantha Wijayatunga and Jaimes Kolantharaj

Op-Ed / Opinion | 18 June 2021

Sri Lanka is considered one of the world’s most vulnerable countries with regard to climate change. Besides environmental impacts, climate change has major implications for the country’s agriculture, tourism, society, health, and energy production. It is vital for Sri Lanka to secure its energy supply by focussing on renewable energy investment.

As a developing country, Sri Lanka will continue to see rising demand for electricity. Luckily, the country has abundant renewable energy potential. Transitioning to renewables presents an opportunity to reduce fuel imports that are placing a burden on government finances, to create jobs, including for women, and to rebuild the economy based on clean and affordable energy. This transition will create multiple gains for the economy, the energy industry, and the environment:

A green economic future. Rising energy demand and slow progress on renewable energy projects are exacerbating the country’s dependence on fossil fuel imports. This situation is aggravated by climate change impacts on hydropower output which has become more uncertain. Thermal power (petroleum and coal) made up about 54% of Sri Lanka’s primary energy supply in 2017. High generation costs resulting from the increasing share of fossil fuel in the generation mix, together with end-user tariff subsidies, add to the country’s fiscal burden. Transitioning to renewables will diversify the country’s energy mix, reducing the dependency on fossil fuel imports. The COVID-19 crisis is an opportunity to reframe the economic recovery through cleaner and more sustainable investments that will raise economic productivity and spur local job creation.

The high share of oil-fired thermal generation makes electricity more expensive and threatens the country’s energy security. Diversifying by shifting to renewable sources such as wind, solar, and others can reduce the security threat. Meanwhile, the falling cost of renewable energy and storage technologies presents opportunities for Sri Lanka to leapfrog renewable energy investments and take advantage of competitive clean-energy technologies.

Sustainable development. Investment decisions on renewable energy should be justified through a holistic approach that goes beyond economic benefits. The approach should prioritize the development of sustainable infrastructure and take into account environmental and social well-being. Transitioning to clean energy is expected to support Sri Lanka in achieving its strategic priorities of generating affordable electricity, enhancing energy security, and meeting Nationally Determined Contributions commitments under the Paris Agreement with regard to the environment and sustainable development as envisioned in the country’s national energy policy and strategies.

Enabling energy transition. Addressing the health and economic impacts of COVID-19 is a clear priority. At the same time, the recovery from the pandemic is an opportunity for governments to reset their immediate, medium, and long-term targets for clean energy. A more comprehensive policy and action-based framework is essential to attract private sector participation in the renewable and energy efficiency business. Clearing regulatory uncertainties, improving grid capacity to allow more renewable energy, and making land acquisition easier are among the measures that will boost private investors’ confidence. With coordinated efforts and greater collaboration from both the public and private sectors, Sri Lanka can tap into the immense potential of renewable energy development to realize economic, sectoral, environmental, and social benefits. While deploying mature renewable technologies through the private sector, it is also important to incentivize new technologies that are in the early phases of adoption.

The Asian Development Bank (ADB) is one of Sri Lanka’s largest multilateral development partners in the power sector, providing holistic support to its transformation. The bank’s assistance to the sector continues to focus on increasing renewable energy deployment, improving energy efficiency, expanding the transmission and distribution system to absorb more renewable energy, and improving the reliability and quality of the power supply.

Some recent interventions include the 30.5-megawatt Moragolla hydropower plant and its associated infrastructure; the systematic development of the 100-megawatt Mannar wind power generation project; a credit line facility to install about 60 megawatts of solar rooftop capacity; and developing prospective renewable parks at Siyambalanduwa, Pooneryn and Mannar phase 2. These are in addition to many ADB projects in the past enabling clean energy development.

To mitigate its climate change vulnerability, Sri Lanka needs to continue its transition to clean energy and develop a more sustainable and resilient future.