Renewable and Sustainable Energy Development in Sri Lanka

2025-11-24

Sri Lanka leads the way in renewable transformation from an island beauty to an energy green powerhouse.

Sri Lanka focuses on an energy transition, with national targets and significant renewable energy potential driving the country toward a sustainable future. The island nation has set a goal of achieving 70% electricity generation from renewable sources by 2030 and carbon neutrality by 2050, positioning itself as a regional leader in clean energy transformation.

The Sri Lankan government has recognised that renewable resources are now treated as national assets. The Sri Lanka Sustainable Energy Authority (SLSEA) serves as the apex institution with absolute ownership of all renewable energy resources under Section 15 of the SLSEA Act, while the Ceylon Electricity Board (CEB) manages system planning and grid integration. The Public Utilities Commission of Sri Lanka (PUCSL) provides regulatory oversight, ensuring quality standards and environmental compliance in the renewable energy sector.

Past Milestones and Progress

Sri Lanka's renewable energy journey has always been a progress towards its goal of being a nation using 100% renewable energy.

• Achieved 10% renewable energy generation ahead of the 2016 target, reaching the milestone in 2015 through rapid expansion in mini-hydro, wind, and solar projects.
• Sri Lanka's renewable energy share grew from around 47% in 2015 to over 63% by early 2024, supported by steady investment and grid modernisation.
• In June 2025, the Ceylon Electricity Board (CEB) recorded an average of 70% electricity generation from renewable sources for the first time since the early 1990s—a milestone driven by upgraded hydro, solar, and wind infrastructure.
• Early reliance on 100% hydro before diversifying with thermal and modern renewables to build resilience and meet rising demand.
• Initial feed-in tariff schemes under 10 MW paved the way for competitive bidding and larger utility-scale renewable projects in recent years.
• Major hydro remains the largest contributor, with mini-hydro, wind, solar PV, and biomass now integrated into the national grid at increasing efficiency.
• Recent milestones include the commissioning of the 100 MW Siyambalanduwa Solar Power Park (expected in 2026), expansion of rooftop solar (3943 installations, 82 MW added in 2023), and new mini-hydro and agri-waste biomass capacity.
• Strategic grid upgrades and supportive policy frameworks have enabled broader and more decentralised renewable energy deployment while reducing fossil fuel dependence.

Major Renewable Resources Used in Sri Lanka

Renewable energy sources in Sri Lanka are diversified across multiple technology types.

Let's see how each technology type contributes to the country's energy security and sustainability goals.

• Large and Mini-Hydro Power Projects
  Large and Mini-Hydro Power Projects remain the backbone of Sri Lanka's renewable energy infrastructure. Large hydro facilities provide 1,535 MW of capacity, while mini-hydro projects contribute an added 422 MW. These resources are particularly valuable for grid stability and seasonal energy storage, though they are subject to monsoon variability.
• Solar Energy Projects
  Solar Energy in Sri Lanka has experienced rapid growth, with both utility-scale ground-mounted installations and distributed rooftop systems. The technical resource potential for solar power generation is estimated at 6,000 MW, with current installations including 137.4 MW of ground-mounted solar PV and 930 MW of rooftop solar systems. The average annual solar radiation ranges from 4.5 to 6.0 kWh/sq./day, providing excellent conditions for solar energy development.
• Wind Power
  Wind Power in Sri Lanka has its potential, with onshore wind capacity estimated at 5,600 MW, of which approximately 267 MW has been developed. The Mannar wind power plant corridor and coastal areas demonstrate strong wind resources, with average speeds of 8-9 m/s in prime locations. Notably, offshore wind potential is estimated at an impressive 56 GW, with 27 GW suitable for fixed-bottom foundations and 29 GW for floating wind technologies.
• Biomass and Municipal Solid Waste
  Biomass and Municipal Solid Waste technologies contribute 44.1 MW and 10 MW, respectively, utilising agricultural residues and urban waste streams to provide dispatchable renewable/ bio energy solutions that complement variable solar and wind generation.

Technical, Economic, and Environmental Challenges in Scaling Renewable Energy

Despite significant progress, Sri Lanka faces several challenges in achieving its ambitious renewable energy targets.

• Grid Integration and Transmission Infrastructure present the most immediate technical challenges. The intermittent nature of solar and wind power requires substantial upgrades to transmission networks, reactive power management, voltage control systems, and energy storage solutions. The Ceylon Electricity Board's Long-Term Generation Expansion Plan 2025-2044 addresses these requirements through systematic grid modernisation. Current estimates suggest that without proper ancillary services, the grid can accommodate wind capacity only up to 7% of peak load, highlighting the need for advanced balancing mechanisms.
• Economic Competitiveness is still a critical factor, though improving rapidly. Solar energy costs are expected to reach grid parity by 2025, with levelized costs dropping to LKR 7-9/kWh, comparable to coal-based generation. The transition from feed-in tariffs to competitive auctions has already proven significant cost reductions, with recent wind and solar bids coming in below 5 cents per unit.
• Environmental and Land-Use Constraints require careful navigation. Site development must consider forest reserves, wildlife conservation areas, archaeological sites, coastal conservation zones, and urban development boundaries. The weighted overlay model used in resource planning helps identify optimal locations while minimising environmental impact.
• Digital Innovation and Smart Grid Technologies are essential for managing high renewable energy penetration. Advanced forecasting systems, automated distribution networks, Internet of Things (IoT) applications, and smart metering infrastructure are necessary for the successful integration of variable renewable sources.

Investments and International Support

Sri Lanka's renewable energy transition is supported by significant international financing and technical aid from multilateral development banks and bilateral partners.

• Asian Development Bank (ADB) has emerged as a key partner, approving multiple facilities totalling over $430 million. This includes a $200 million loan for the Power System Strengthening and Renewable Energy Integration Project, a $30 million Small Expenditure Financing Facility for operational sustainability, and $200 million for wind power development, including Sri Lanka's first 100 MW wind park in Mannar.
• The World Bank Group has approved a comprehensive $150 million program titled "Secure, Affordable, and Sustainable Energy for Sri Lanka." This initiative includes $40 million in guarantees to de-risk private investment, particularly addressing payment obligations from the Ceylon Electricity Board. The program is expected to mobilise over $800 million in private investment and add 1 GW of clean electricity to the national grid.
• The World Bank has also developed the Offshore Wind Roadmap for Sri Lanka, which identifies 56 GW of offshore wind potential and provided detailed scenarios for development. Two deployment pathways are outlined: a Low Growth Scenario reaching 2 GW by 2050, and a High Growth Scenario achieving 4 GW by 2050, with the possibility of regional interconnection for electricity export.
• Government Incentive Mechanisms include streamlined application procedures through SLSEA, competitive procurement processes, and periodic awareness programs for developers and line agencies. The Project Approving Committee helps coordination among multiple government agencies to speed up project approvals.

Sri Lanka's Energy Exports

While Sri Lanka is still in the early stages of exporting electricity or green hydrogen, its impact as an exporter of renewable energy expertise is steadily growing across Africa and South Asia. Several pioneering Sri Lankan companies have successfully leveraged their domestic experience in small and medium-scale hydropower to undertake international projects and offer valuable sector knowledge abroad.

Hydropower Investments in Africa and South Asia:

• Companies like Vidullanka PLC have set up flagship hydropower operations in Uganda, owning and operating the 6.5 MW Muvumbe and 6.5 MW Bukinda plants under long-term agreements.
• WindForce PLC and ENCO Pvt Ltd have also entered new frontiers, with ENCO contributing to hydropower development in Liberia and WindForce expanding into Zambia.
• Lanka Ventures PLC holds a 45% stake in the 10 MW Makari Gad Hydropower Project in Nepal, underlining increasing Sri Lankan presence in South Asian renewables.

Engineering and Capacity-Building Services:

• Eco Power Holdings Ltd and South Asia Energy Management Systems (SAEMS) have exported both run-of-the-river mini-hydro development models and operations & maintenance expertise to Uganda, Kenya, and Nepal.
• These ventures often involve collaborations with local workforces, building skills and contributing to host country infrastructure and energy access.

Broader Industry Footprint:

• Sri Lankan firms now provide engineering, procurement, and construction (EPC) services for hydropower and occasionally supply technology components, such as turbines and control systems, to projects abroad.
• These indirect "energy exports" create foreign exchange earnings, international brand visibility, and networks for future large-scale green project opportunities.

Future of Exports:

• With the development of regional power grid connections (such as the forthcoming India–Sri Lanka HVDC link) and rising demand for clean energy in neighbouring regions, Sri Lanka is positioned to transition from a knowledge and technology exporter to a future provider of electrons, supplying renewable energy directly to the South Asian market.
• As experience accumulates in international green hydrogen, wind, and solar deployment, further export-driven opportunities are likely to arise across both power and technology value chains.

Sri Lanka's as a regional contributor to renewable energy is a testament to its domestic achievements and strategic extension of its expertise. Sri Lanka is dedicated to fostering sustainable development beyond its borders and establishing dominance throughout the Global South.

Future Outlook

Sri Lanka's renewable energy future is characterised by ambitious targets and comprehensive planning for full decarbonisation of the electricity sector.

• Vision for 2050 encompasses achieving 100% renewable electricity generation, as outlined in various scenario analyses. The ADB-funded study "100% Electricity Generation through Renewable Energy by 2050" provides detailed pathways showing how Sri Lanka can meet the projected demand of 70,000 GWh by 2050 through a combination of 16,000 MW solar capacity, 15,000 MW wind power, and complementary hydro and biomass resources.
• Energy Security and Economic Benefits from renewable energy deployment are expected to be substantial. The transition could potentially save $18-19 billion in avoided fuel costs by 2050 compared to a coal-heavy scenario. Beyond cost savings, renewable energy development will reduce exposure to volatile fossil fuel prices, improve trade balance through reduced imports, and create significant employment opportunities in green industries.
• Grid Modernisation and Storage will be critical enablers of the renewable energy future. Peak demand is projected to reach 12,000 MW by 2050, requiring sophisticated demand management and energy storage systems. By 2050, the evening peak deficit could reach 3,600 MW, needing approximately 15,000 MWh of storage capacity through combinations of pumped hydro, battery storage, and other advanced technologies.
• Research, Development, and Innovation priorities include floating solar pilots, offshore wind development, wave energy assessments, green hydrogen demonstrations, and advanced grid management systems. The integration of artificial intelligence and digital technologies will be essential for managing complex renewable energy systems.

Conclusion

Sri Lanka is committed to adapting to renewable energy, progressing from early mini-hydro initiatives to large-scale projects supported by strong grid expansion and institutional frameworks. By 2024, the country had achieved 63.2% renewable electricity capacity, laying a firm foundation for its 70% target by 2030 and long-term vision of 100% renewable power by 2050. This progress reflects a clear national commitment strengthened by international partnerships and forward-thinking energy policies.

The next milestones will be challenging yet possible with close collaboration among policymakers, investors, researchers, and citizens. Stable regulations, transparent auctions, and modern grid infrastructure will be essential to sustaining growth. Developers must align with SLSEA procedures and utilise global financing opportunities, while academia advances innovations in storage, hydrogen, and marine energy.

At the same time, businesses and households can accelerate change through solar adoption and energy efficiency. Together, these efforts will drive Sri Lanka toward lasting energy independence and environmental sustainability.