January 22, Colombo (LNW): Sri Lanka’s renewable energy industry is facing mounting financial strain as repeated restrictions on power generation by the Ceylon Electricity Board (CEB) are estimated to have caused losses approaching Rs. 2 billion, according to industry representatives.
The Grid Connected Solar Power Association (GCSPA) says large-scale renewable energy facilities have been routinely instructed to scale back or halt production since February 2025, particularly during weekends and public holidays between mid-morning and mid-afternoon. The situation has reportedly worsened in recent days, with similar instructions now being issued even on weekdays.
GCSPA President Prabath Wickramasinghe said the curtailments have been justified by authorities on the grounds of an oversupply of solar power during daylight hours. However, he argued that this highlights the urgent need for modern energy storage solutions, noting that many countries with high renewable penetration have already adopted battery storage systems to manage surplus generation.
Industry officials point out that approvals for battery energy storage systems have stalled, despite Cabinet clearance granted last June for a pricing structure and subsequent tax concessions approved by the Finance Ministry. Although the Ministry of Power and Energy directed the CEB several months ago to move forward with implementation, developers say there has been little progress.
The absence of storage facilities means that excess daytime electricity cannot be saved for evening peak demand, typically between 6.30 p.m. and 10.30 p.m. As a result, the sector estimates daily losses of around four million units of electricity, while owners of ground-mounted solar plants report an average drop of about 15 per cent in monthly income compared to last year.
Former GCSPA committee member Kishan Nanayakkara stressed that renewable energy plants are contractually designated as “must-run” facilities under their power purchase agreements. Unlike thermal power stations, which receive capacity payments even when idle, renewable producers are paid only for energy dispatched to the grid. He warned that recent curtailments effectively amount to unilateral breaches of these contracts.
The association is calling on the CEB and the Power and Energy Ministry to introduce interim compensation mechanisms to offset losses, noting that longer-term solutions such as battery storage will take years to materialise due to procurement and implementation timelines. Despite repeated discussions, industry representatives say no compensation has yet been forthcoming, raising concerns about investor confidence and the future pace of Sri Lanka’s renewable energy transition.
