Sri Lanka’s Green Power Dream

Source: Factum

Is the 70% Renewable Pledge a Goal Too Far?

Sri Lanka’s national commitment to generate 70% of its power from renewable sources by 2030 stands as one of the region’s most ambitious policy goals. It reflects both a necessary response to global climate obligations and a pragmatic strategy for national energy security, particularly given the acute vulnerability to global fuel price volatility exposed by recent economic crises. However, an analysis of the current structural impediments and implementation pace suggests that, barring immediate and decisive reforms, this target risks remaining out of reach by 2030. The challenge is multi-dimensional, stemming from a complex and interlinked web of technical deficiencies, institutional resistance, and critical geopolitical balancing acts. The energy transition is currently fragmented, with policy aspiration consistently outpacing implementation of readiness, leading to a structural challenge.  

I. The Infrastructure Paradox The most urgent challenge confronting the 70% target is a fundamental feasibility disconnect between the policy’s stated ambition and the actual capacity of the energy infrastructure to support it. The required shift demands a rapid integration of variable renewable energy (VRE) sources like solar and wind, but the essential groundwork for system stability remains critically delayed, rendering the target unattainable under current conditions.  

The Obsolete Grid and Storage Deficit: The existing national electricity grid was historically designed for centralized, one-way power transmission from large, predictable sources like fossil fuel plants and major hydroelectric facilities. It is demonstrably ill-equipped to manage the decentralized, fluctuating power flow inherent to VRE. Successfully integrating solar and wind at the required high fractions demands massive, estimated investments (in the billions of USD) in smart grid technologies, transmission and distribution upgrades, and, most crucially, large-scale energy storage solutions.  

These essential grid modernization projects, vital for system flexibility and balancing, are facing systemic delays. These delays are often rooted in insufficient financing, bureaucratic sluggishness, and internal resistance from utilities accustomed to established, less complex operations. Without immediate, substantial, and dedicated action to deploy energy storage and flexibility solutions, which currently fall under the scope of grid modernization projects, any further rapid deployment of VRE capacity risks system instability, energy curtailment, and the ultimate failure to meet the 2030 target. Technical constraints, inadequate funding, and the slow pace of decision-making have collectively stalled the modernization required to manage a VRE-dominated grid.  

A Narrow Focus on the Energy Equation: Furthermore, the national energy strategy suffers from a persistent misconception: equating the entire “energy” transition with “electricity” alone. Expert data clearly indicates that electricity accounts for only around 17% of Sri Lanka’s total energy requirement. The vast majority, 83% is derived from non-electricity sources, predominantly thermal energy used in 2 transport, household cooking, and crucial industrial processes such as drying and heating. Industries, in particular, heavily rely on thermal energy, which constitutes up to 70% of their energy use.  

The current, singular focus on the power sector overlooks the massive and often unrecorded energy consumption in vital sectors like agriculture, Small and Medium Enterprises, and household biomass use. An effective energy transition requires a holistic, cross-sectoral transformation: replacing unsustainable traditional biomass with sustainable alternatives, achieving industrial thermal efficiency through new technologies, and accelerating transport electrification. Neglecting these areas means the nation is solving only a small fraction of its total energy and decarbonization problem, despite the existence of locally developed, award-winning technologies like advanced biomass/solar dryers and biogas systems that could immediately benefit these neglected sectors.  

II. Institutional Inertia and Technology Diplomacy  

The structural capacity of the state to manage this systemic change is undermined by both crippling internal resistance to reform and a complex foreign policy dilemma that introduces friction into technology procurement.  

The Ceylon Electricity Board Reform Deadlock: A critical requirement for attracting the necessary private capital to fund the transition is the fundamental restructuring and unbundling of the leading state electricity entity, the Ceylon Electricity Board (CEB). This essential reform is intended to divide the CEB into separate, commercially viable, and transparent entities for generation, transmission, and distribution, thereby establishing the necessary competitive environment for international private investment. This division, however, faces fierce Institutional Inertia and strong internal opposition, which generates significant delays.  

This resistance, often cloaked in the public discourse of protecting national assets or safeguarding employee interests, acts as a profound bottleneck to progress. It effectively deters the influx of private capital and the technical expertise required for grid upgrades, generation projects, and comprehensive energy sector reform. Without a clear and expedited path to a modern, unbundled, and financially accountable state of utility, the required participation of the private sector, essential given the country’s lack of technology and financial resources, remains severely inhibited. Furthermore, comprehensive policies are frequently drafted but often not implemented, with continuity disrupted by constant changes in leadership and ministerial priorities.  

The Technology-Diplomacy Dilemma: The practical pursuit of VRE has placed Sri Lanka directly in the middle of a strategic dilemma involving technology and foreign policy. When selecting VRE components, particularly solar and wind, the country has consistently gravitated toward foreign partners, mainly from China, due to their demonstrated ability to offer superior technology at the lowest procurement costs. This technology and price alignment offer undeniable economic advantages, enabling rapid increases in power generation capacity while ensuring competitive pricing for VRE components.  

However, this commercial preference creates diplomatic friction. By consistently favoring the most cost-competitive source, Sri Lanka complicates its high-stakes foreign policy balancing act, making it 3 difficult to attract long-term infrastructure investments from its close neighbor, India. India, a significant regional partner promoting its own RE technology and investment frameworks, views this alignment as a competitive disadvantage, potentially dampening opportunities for diversified investment streams critical for long-term strategic resilience and partnership. This balancing act requires deft diplomacy to ensure both cost efficiency and strategic partnership.  

III. Geopolitical Autonomy and Regional Integration The most complex constraint facing the 70% target is rooted in a strategic decision concerning regional power dynamics and energy independence, specifically the issue of grid interconnection with a major regional power.  

The Energy Sovereignty Paradox: While technical studies have proven the engineering feasibility of constructing a subsea High Voltage Direct Current (HVDC) link with the Indian grid, the project remains effectively stalled. This geopolitical paralysis is not a formal rejection but is driven by the perceived risk of weakening Sri Lanka’s strategic control over its own energy system. The core conflict is the Energy Sovereignty Paradox: the nation’s pursuit of long-term energy security through stable interconnection with a larger neighbor is actively blocked by deeply entrenched national security concerns. This opposition is reinforced by legitimate observations of regulatory challenges, asymmetric power dynamics, and perceived dominance faced by other South Asian nations, such as Nepal and Bangladesh, when engaging in cross-border power trade.  

From a purely technical standpoint, interconnection offers a significant, immediate, and cost-effective solution to the VRE intermittency problem. It would provide instant access to a massive, stable regional grid, effectively serving as an immense, shared flexibility solution. However, for a nation’s intent on maintaining strategic autonomy, the economic and technical benefits are currently overridden by the political risk of dependency on a regional giant. This political stance, while understandable from a sovereign control perspective, pre-empts the adoption of a critical infrastructure solution that could otherwise rapidly stabilize and accelerate the transition toward 70% RE. The country risks being at a disadvantage due to the regional power dynamic, necessitating robust internal capacity and negotiation skills to ensure equitable terms should a future connection be pursued.  

The 70% RE goal by 2030 remains an inspirational objective, but its foundation is fundamentally challenging. Achieving it will demand more than merely installing new capacity; it requires decisively resolving the feasibility disconnect through immediate, large-scale grid investment and storage deployment; overcoming the institutional inertia through radical restructuring of the utility sector; and strategically navigating the inherent tensions between technology and price alignment and the necessary geopolitical rejection of interconnection to secure national autonomy. Without this shift from policy aspiration to integrated structural reform, the 2030 target risks becoming a testament to unfulfilled ambition, highlighting the profound gap between stated intent and structural capacity.

By Verangika Upananda, a researcher specializing in resource politics and is interested in sustainable development topics. She holds dual Master’s degrees in Development Studies from the Universities of Colombo and the University of Bayreuth, Germany and a BA in Social Sciences from the Open University of Sri Lanka. Her research spans the Democratic Republic of Congo, India, and Sri Lanka, integrating field-based insights with policy analysis. Verangika has worked in development consultancy and has served as a Visiting Lecturer in Economics at the Open University of Sri Lanka. She is currently a Research Specialist for Factum. 

Factum is an Asia-Pacific-focused think tank on International Relations, Tech Cooperation, and Strategic Communications accessible via www.factum.lk

The views expressed here are the author’s own and do not necessarily reflect the organizations.