With the increasing demand for energy to provide for the Sri Lanka’s economic and social  development,  total  primary  energy  demand  is  expected  to  increase  to  about  15,000 kTOE  by the year 2020 at an average annual growth rate of  about 3%. Electricity  and petroleum  sub-sectors are  likely  to  record higher annual growth  rates of about 7- 8%.   Hydro  electricity  production  and  biomass-based  energy  supplies, which  are  the  only  large-scale  indigenous  primary  energy  resources  available  in  Sri  Lanka,  are  expected  to  increase  only  marginally  in  the  near  future.    This  is  mainly  due  to  limitations  in  further hydropower development owing  to  lower  economic viability  of  exploiting  the  remaining  large  hydropower  sites  and  limited  use  of  biomass  with  gradually increasing standard of living of the population.  This means that the country’s  incremental  primary  energy  requirements  need  to  be  supplied  mainly  by  imported  fossil fuels in the medium term. In the longer term, possible development of indigenous  petroleum  resources  and  accelerated  development  of  non-conventional  renewable  energy  are  likely  to make  a  significant  change  in  Sri  Lanka’s mix  of  primary  energy  resources.

Challenges faced by Sri Lanka’s Energy Sector are many. While ensuring a continuous supply of  electricity  and  petroleum  products,  the  growing  economy  has  to  manage  a  strategic  balance  between  indigenous  energy  resources  and  imported  fossil  fuels. Electricity  supply  to household  needs is yet to reach a quarter of Sri Lanka’s population. Commercial energy utilities are required  to  be  further  strengthened  to  improve  their  financial  viability  and  service  quality.  The  involvement of the country’s population in the investment, operation, regulation, and delivery of  energy services needs to be increased.   

By end 2015, Sri Lanka’s major hydropower installed capacity was 1,377 MW while fuel oil, coal and nonconventional renewable energy (NCRE) installed capacities were 1,115 MW, 900 MW and 458 MW, respectively. NCRE comprised 306.7 MW of mini-hydropower, 126.9 MW of wind power, 13.1 MW of biomass power, 10.5 MW of dendro power and 1.4 MW of solar power.

Sales to the ‘Domestic’ category, which accounted power plant, coal power generation increased substantially by 38.8 per cent to 4,443 GWh during the year. The cumulative effect of increased hydro and coal power generation helped to lower fuel oil generation by 47.1 per cent to 2,276 GWh during the year. Meanwhile, the generation of electricity through nonconventional renewable energy (NCRE) sources, including mini-hydro generation, increased by 20.4 per cent to 1,466 GWh. Accordingly, of total generation, the share of hydro, fuel oil, coal and NCRE power generation was 37 per cent, 17 per cent, 34 per cent and 11 per cent, respectively. The share of power generated by the CEB within total power generation increased to 79 per cent in 2015, compared to 69 per cent in 2014, while the remainder was purchased from Independent Power Producers (IPPs). The overall transmission and distribution loss, as a percentage of total power generation reduced to 10.0 per cent in 2015, from 10.5 per cent in the previous year and from 17 per cent in 2005. Meanwhile, coal power generation continued to face issues in relation to storage capacity limitations during the periods with rough sea conditions and frequent interruptions, and these issues need to be addressed on a priority basis.

During the year, the total NCRE installed capacity increased by 18 MW and accordingly, by the end of 2015, the country had installed capacity of 306.7 MW of minihydro power, 126.9 MW of wind power, 13.1 MW of biomass power, 10.5 MW of dendro power and 1.4 MW of solar power connected to the national grid. In addition, the CEB signed contracts for 26 NCRE projects, with a collective capacity of 41 MW, during 2015. A target of 20 per cent of total electricity generation has been set for NCRE generation by 2020, which requires increased efforts to harness the potential of untapped resources. Mini-hydro potential, wind power potential particularly in Mannar, Puttalam and Jaffna, and biomass resources are often left untapped, while solar power is also being increasingly recognised as one of the most appropriate renewable energy sources for a tropical country like Sri Lanka. Meanwhile, the Sri  Lanka Sustainable Energy Authority (SLSEA), which has been engaged actively in promoting energy conservation and assessing indigenous renewable energy sources, was instrumental in saving around 100 GWh by promoting the implementation of energy efficient activities in industrial and commercial sectors.

Non – Renewable

As of 2015, 1,464 MW of the total thermal installed capacity was from state-owned fossil fuel power stations: 900 MW from Lakvijaya, 380 MW from the state-owned portion of Kelanitissa, 160 MW from Sapugaskanda, and 24 MW from Uthuru Janani. An additional 500 MW will be added to the total state-owned capacity after the late 2017 completion of the Sampur Power Station, which is being built with provisions to add a further 500 MW in the future. The remaining 641 MW of the installed thermal capacity are from six privately owned power stations. All thermal power stations run on fuel oil, except Lakvijaya and Sampur, which run on coal.