October 25, Colombo (LNW): Sri Lanka is considering an even more ambitious shift towards renewable electricity, with Energy Minister Anura Karunathilaka indicating that the country could surpass its existing goal of generating 70 per cent of electricity from clean sources by 2030.
The government’s renewed focus comes as the country grapples with the financial consequences of relying heavily on imported fossil fuels. Speaking to AFP, Karunathilaka said rising international energy prices had reinforced the need to accelerate the transition to domestic renewable resources.
The Minister described the current situation as a wake-up call for policymakers, stressing that expanding renewable generation would be a central priority in the years ahead.
Sri Lanka imports all the oil and gas it requires, leaving the economy vulnerable to international price fluctuations and disruptions to global supply routes. Recent instability linked to the US-Israeli conflict with Iran, together with interruptions to shipping through the strategically important Strait of Hormuz, has added to concerns over the cost and reliability of fuel supplies.
Higher energy costs have placed additional pressure on households, businesses and public finances, with increases in fuel, gas and electricity prices contributing to the wider cost-of-living burden. These difficulties have emerged as Sri Lanka continues its recovery from the severe economic crisis of 2022.
According to the Energy Ministry, spending on imported fossil fuels has at times consumed as much as 30 per cent of the country’s foreign exchange reserves in a single month. The figure illustrates the scale of the challenge facing an economy seeking to reduce its exposure to costly external energy supplies.
Under the existing national policy, renewable sources are expected to account for 70 per cent of electricity generation by 2030, compared with approximately 60 per cent at present. Hydropower remains a major contributor, supplying around 40 per cent of the country’s electricity.
Karunathilaka suggested that the government might need to aim higher than its current benchmark, reflecting the growing economic and strategic importance of locally generated renewable power.
However, achieving that ambition will require more than installing additional solar panels and wind turbines. Sri Lanka must also strengthen its transmission network, improve the management of fluctuating electricity supplies and secure substantial investment in supporting infrastructure.
The Energy Ministry plans to introduce five major transmission lines from 2027 to increase the capacity of the national grid and improve its ability to accommodate expanding renewable generation.
The rapid spread of rooftop solar systems has already exposed weaknesses in the existing network. At certain times of the day, particularly when sunlight is abundant and electricity demand is relatively low, solar generation can exceed the amount the grid can readily absorb.
A nationwide power outage lasting six hours earlier this month followed a disruption to the electricity network, with excessive solar generation identified as a possible contributing factor.
The Minister said some solar facilities occasionally had to reduce or suspend their output temporarily to protect the stability of the system. He maintained that these restrictions should not be interpreted as a retreat from renewable energy, but rather as a reflection of the need to balance growing generation capacity with the grid’s operational limits.
The government is targeting solar generation capacity of nearly 4,400 megawatts by 2029, which Karunathilaka said would represent a 388 per cent increase from 2024 levels.
Alongside expanding generation, officials are examining changes to the financial arrangements governing electricity supplied by private solar producers.
Under certain existing schemes, producers can feed surplus daytime electricity into the national grid and draw an equivalent quantity at night without paying an additional energy charge, subject to the applicable agreement. However, the Minister argued that this arrangement had become increasingly costly for the state because electricity supplied during periods of lower demand could offset consumption during the evening, when power generation is often more expensive.
The government is therefore considering a revised pricing framework intended to distribute costs more fairly between solar producers, electricity consumers and the state. Karunathilaka said any new arrangement would need to account for the economic realities of the electricity system while continuing to encourage private investment in clean energy.
Battery storage is also expected to play a growing role in the transition. By storing surplus electricity generated during sunny periods and releasing it when demand rises, large-scale storage facilities could help reduce waste, ease pressure on the grid and improve the consistency of renewable power supplies.
Despite the technical and financial obstacles, the government has set its sights on a longer-term renewable electricity share of between 90 and 95 per cent.
Karunathilaka acknowledged that Sri Lanka’s existing infrastructure, investment capacity and electricity system were not yet ready to eliminate coal and naphtha entirely. Nevertheless, he expressed confidence that the country could substantially reduce its dependence on these fuels over the next decade to 15 years.
The proposed transition represents both an energy policy challenge and an economic opportunity. Greater use of domestic renewable resources could help conserve foreign exchange, reduce exposure to volatile international fuel markets and strengthen the country’s long-term energy security.
Whether Sri Lanka can turn its ambitions into reality will depend on how quickly it upgrades its electricity network, attracts investment and introduces workable solutions for storing and distributing clean power. The government’s immediate task will be to ensure that the expansion of renewable generation is matched by a reliable grid capable of delivering electricity when households and industries need it most.
