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Steps to ensure low-cost 24/7 electricity on both sides of the Palk Strait

In all network industries,the core problem is the peak. Peak is what drives investment and costs. But in Sri Lanka, even the valley is becoming a problem. The laws of physics require every electron that is produced and distributed over the grid to be also consumed. We lack adequate demand in the middle of the night.

We talked about the problem, in passing, in our submission to the PUCSL last year. We talked about it in more detail when we taught the intro course this year. In the belief that a policy window has opened with the new government in New Delhi, I wrote it up.

Sri Lanka currently has a peak power demand of around 2,150 MW and a minimum demand of at most 900 MW at night. When the three stages of the Puttalam coal plant are completed, the country will have 900 MW of baseload power. Coal-powered plants cannot be started up and shut down easily, which is why they are designed for baseload generation. Even without Sampur, the country faces a problem about how to incorporate 900 MW from Puttalam into the system when minimum demand at night is in the same range.

Even if we assume robust growth in electricity demand and that it will take five years to commission the India-Sri Lanka joint venture, it will be very difficult to accommodate a 500 MW baseload plant within Sri Lanka’s small system. Parallel to expediting Sampur, it will be necessary to work on a solution to the problem of creating adequate night-time demand.

Guest column in Financial Times.

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