by Priyantha D.C. Wijayatunga and Rahula A. Attalage
Infrastructure Series
At present the electricity supply industry in Sri Lanka is moving through a crucial phase in terms of its management structure, planning, particularly at generation level, and financial viability. It is very likely that even ownership issues in different sub-sectors will become important within the near future with the proposed power sector reforms gaining momentum. Further, along with greater awareness among the local community on environmental matters, the traditional expansion decisions within the generation sub-sector are being questioned. As a result, some of the contentious environmental issues have been hampering the growth in the electricity generation sub-sector, particularly in the development of coal power and major hydro plants.

The main intention of this policy paper is to examine the technical, economic and environmental implications of different thermal generation options available for the Sri Lanka electricity industry in its expansion into the next twenty years. In this process it is important to investigate the present status of the energy sector in the country, its dependence on imported fossil fuel resources, required diversity of primary energy used for electricity generation, and the availability of local technical capacity to construct, operate and maintain power plants based on different technologies.

The paper starts with a general background to the country’s energy sector and its relationship to economic growth. The present status of the electricity sector and related issues are then addressed followed by the available options for thermal generation in the Sri Lanka electricity industry. These options are analysed in detail in terms of their economic, technical and environmental impacts from the point of view of both the local and global energy markets. Based on this analysis, conclusions are drawn on the types of thermal generation options that the Sri Lanka electricity industry should accommodate.