Compiled by:
Ms. Sandini Dheerarathna, Manager Communications and Marketing, Janathakshan GTE Ltd.
Overview:
South Asia Energy Transition Platform aims to capture a multi-stakeholder perspective on the renewable energy transition in the South Asia region and energy cooperation in the region. In this interview focus is made on the challenges in absorbing variable renewable energy, financing and policy barriers, and immediate steps required to accelerate Sri Lanka’s national energy goals and to benefit from regional energy cooperation.
Interview:
- Being engaged in solar energy generation as a private entrepreneur, I represent the Solar Engineering Procurement and Construction Association (SEPCA) of Sri Lanka.
- Sri Lanka’s 2030 target of achieving 70% renewable energy generation and long-term carbon neutrality commitments are strong policy motivators. However, realizing these goals requires modernizing the national grid, integrating storage systems, and strengthening institutional coordination across the energy sector.
- The biggest drivers for energy transformation within the country are energy security, cost efficiency, and climate commitments. Reducing dependence on imported fossil fuels has become a national priority due to rising global prices and currency depreciation. The transition to renewable energy, therefore, serves both environmental and economic purposes.
- There are three national level actions to keep the energy transition on track.
- First, the country’s grid infrastructure requires urgent upgrades, including relay protection systems and Supervisory Control and Data Acquisition system (SCADA) enhancements, to accommodate increasing renewable inputs.
- Secondly, large-scale and distributed battery installations are essential to stabilize supply and balance variability from solar and wind.
- Thirdly, promotion of domestic production of solar components and training local technicians to reduce reliance on imports and enhance national capacity.
- There are few barriers at policy level that hinder broader cooperation efforts. Frequent policy changes and delays in implementing the Electricity Act discourage investor confidence. Secondly, High interest rates (10–12%) and limited concessional financing options make renewable projects costly. The approval process for projects, sometimes involving up to 11 agencies, is inefficient and time-consuming.
- Further, outdated grid systems and lack of automation hinder large-scale renewable integration while absence of sufficient energy storage and inadequate distribution-system protection settings have led to system instability (as evidenced by recent blackouts).
- To address these challenges; modernizing grid infrastructure, deploying battery storage systems, and streamlining project approvals through a single-window mechanism is essential.
- There is also a great need for collaboration between the Ceylon Electricity Board (CEB), PUCSL, and the private sector representatives such as SEPCA to expedite Sri Lanka’s renewable integration and grid stability which leads to achieving energy transition targets.
- Sri Lanka currently has limited operational partnerships with neighboring countries in the energy sector. Discussions on establishing an electricity link with India have been ongoing for years, but no concrete progress has been made due to technical, economic, and political constraints.
- The most relevant form of partnership at present lies in technical collaboration, investment facilitation, and knowledge exchange rather than direct power sharing. Foreign investor interest, particularly in renewable projects and grid modernization, remains high, but bureaucratic complexity, policy uncertainty, and lack of follow-through have restricted effective collaboration.
- Organizations such as the Asian Development Bank (ADB) and World Bank have supported large-scale renewable and transmission projects in Sri Lanka, but engagement with small and medium-scale rooftop solar has declined since 2022.
- I recommend that Sri Lanka broaden funding portfolios to include distributed renewable projects, microgrids, and energy storage, support grid modernization and smart-grid technology upgrades, and provide technical assistance and concessional finance for private sector developers and SMEs in the renewable sector.
- Platforms such as SAARC and BIMSTEC have had minimal impact on Sri Lanka’s energy sector in practical terms. While such platforms promote dialogue and policy-level engagement, they have not resulted in tangible projects or direct support for national implementation.
- Instead of relying on high-level intergovernmental platforms, Sri Lanka should focus on developing national-level technical cooperation frameworks, especially involving engineers, regulators, and private sector actors, to foster local innovation and operational readiness.
- There is a need for continuous capacity building and technical exchange among professionals in the energy ecosystem. Creating a technical cooperation network that connects policymakers, engineers, regulators, and private sector experts will certainly promote regional cooperation.
- Peer learning and on-the-job technical training, especially in areas like grid operations, storage management, and distributed generation, are more effective than one-time workshop. Such platforms could later be scaled up to foster collaboration with regional and international partners.
- Focusing on the Sri Lankan context, the country needs a stable and transparent investment environment to attract both local and foreign financing including from the regional countries. Although investor interest in renewable projects is strong, policy inconsistency and procedural bottlenecks prevent project execution.
- Sri Lanka should work on developing a national climate finance framework that aligns with its renewable energy targets and includes provisions for public–private partnerships, concessional credit lines, and blended finance mechanisms. Further, simplifying approval processes and ensuring regulatory predictability are critical for encouraging sustainable private investment.
- I believe initiatives such as the South Asia Energy Transition Platform can play a critical role in facilitating technical dialogue, policy feedback, and evidence-based recommendations to strengthen regional cooperation to strengthen Sri Lanka’s renewable energy ecosystem.