By: Staff Writer
Colombo (LNW): Indian businessman Gautam Adani’s wind energy project is to offer the lowest energy unit price in Sri Lanka.
Sri Lanka is grappling with rising electricity generation costs, lacking the benefits seen in neighbouring countries with Independent Power Producers (IPPs).
Inadequate transmission planning revealed by grid failures contrasts with advanced private setups in India, emphasizing technology-driven customer empowerment. To advance, Sri Lanka’s CEB-dominated sector requires reforms, inviting private players under robust oversight to balance growth and consumer needs.
Internal sources close to the project revealed, IPPs like Adanifor example could offer a substantial 30% cost reduction, dropping unit costs below $0.10 giving a much-required relief to the public at large.
The wind power project alone promises annual savings of USD 50 million to the Sri Lankan economy according to internal project contrary to the costs the country has to pay an extra Rs. 20 billion in non-renewable energy costs annually sources say.
However, utility-scale renewable projects are stalled due to opposition from certain CEB officials, causing a loss of 3,200 GWh annually coined as a ‘mafia’ within the CEB, posing a threat to both economic growth and renewable energy targetssources close to the project reveal. The recent grid failure emphasizes the urgency for change to encourage competition and enhance reliability in the power sector.
Companies have unveiled intentions to invest a total of $25 billion in the renewable energy sector in the country by 2030, as disclosed by the Board of Investment.
Over the next 3-4 years, potential private investments via Foreign Direct Investment (FDI) could reach up to $3 billion, earmarked for utility-scale wind, solar, and battery storage projects.
Sun Power is set to lead with a commitment of $1.5 billion, followed by Adani Green with $900 million, Orbital Energy with $200 million, WindForce PLC with $150 million, and the remaining portion covered by a consortium of private developers, according to recent news reports.
The government has already explored the offshore wind power potential in the country especially in the North and East, expediting two mega wind power projects of 286 MW in Mannar and 234 MW in Pooneryn undertaken by India’s Adani Green Energy Ltd for an investment of over US$ 500 million.
Adani has requested the government to include their claim for carbon credit in their project contract under Sri Lanka Carbon Crediting Scheme (SLCCS) established for supporting local clean projects to benefit from climate finance for the Greenhouse Gas emission (GHG) reduction, official sources said.
It has also demanded a government guarantee for their investment in the two projects or to keep shares of another state owned business enterprise as a surety for their money dumped in those projects.
Power and Energy Minister Kanchana Wijesekera disclosed that Adani Green Energy has been given approval to implement the projects in August and it has expressed commitment to complete the projects by December 2024.
A cabinet paper on the same projects, dated August 14, 2023, noted that it should be considered as a government-to-government arrangement.
