The state-owned utility, Ceylon Electricity Board (CEB), operates most of the country’s hydropower stations and is planning new investments in its Long Term Generation Expansion Plan (2018-2037). To meet rising electricity demand, growing at around 6 per cent annually and expected to reach almost 17 TWh by 2020, the CEB is aiming to increase overall power capacity from 4 GW currently to almost 7 GW by 2025. In addition to hydropower, this includes ramping up solar and wind capacity, alongside added thermal plants.
As a member of the Climate Vulnerable Forum, an international partnership of countries, Sri Lanka has pledged to achieve carbon neutrality by 2050, demonstrating the country’s longer term ambitions.
Hydropower output has been impacted by variability in monsoon patterns, which has significantly increased over recent decades due to climate change. Water use for domestic and irrigation purposes also takes precedence over hydropower affecting availability. At the beginning of 2017, reservoir storage recordings across six major dams were below the five previous years, but picked up at the end of the year finishing higher compared to December 2016.
Over the coming years, water management plans and dam rehabilitation will need to consider the potential for heavier rainfall and flood situations due to a changing climate.
Operating as a multi-purpose system, the Mahaweli cascade was mostly developed in the 1980s and totals just over 800 MW including the country’s three largest hydropower plants. A recent addition is the new Moragahakanda reservoir, comprising a 25 MW plant with its first generating unit now under commissioning. The 120 MW Uma Oya project is also under construction, as a trans-basin project planned for 2020.
The 360 MW Laxapana complex on the Kelani river-basin was developed between 1950 and 1975. Now due for modernisation, works at the Polpitiya, New and Old Laxapana and Wimalasurendra stations are expected to increase efficiency. The 35 MW run-of-river Broadlands project is currently under construction, and will be the first hydropower plant developed under the Carbon Development Mechanism. Ground and tunnelling issues have caused delays and completion is expected by 2020.
Other projects on the horizon include Thalpitigala (15 MW), Moragolla (30 MW), Seethawaka (20 MW), Gin Ganga (20 MW) and a potential 600 MW pumped storage project which could help balance wind and solar power. In addition, 16 new small hydropower plants totalling 27 MW were brought online in 2017, supporting a total of 353 MW of small hydropower projects already commissioned as independent power projects (IPPs).
Recent sector reforms have included the National Energy Policy and Energy Sector Development Plan for a Knowledge-Based Economy (2015- 2025). Policies focus on promoting the island’s indigenous energy resources, developing competitive pricing, improving the quality of power supply (now regulated by the Public Utilities Commission of Sri Lanka), and notably rehabilitating outdated hydropower plants.
Sri Lanka is moving away from feed-in tariffs to competitive bidding for renewables, which will impact the returns expected by project investors. Hydropower plants developed by independent power producers in 1996 and after are also either at or nearing expiry of their 20 year power purchase agreements. Applicable tariff and ownership arrangements are yet to be established with relevant authorities to ensure continuity of operations. Observers have made calls for further reforms, including outreach efforts for national and international funding and the establishment of ancillary markets to reward balancing services.
This country profile is featured in the 2018 Hydropower Status Report. Download the full report here.
This profile was last updated in June 2018.