Sri Lanka Power Report 2015
BMI View: Sri Lanka will look to coal and renewables to meet its energy needs for the next three to fiveyears, as alternatives offered by gas-fired power generation remain too costly and the necessary pipelinelinks, LNG facilities and distribution system are still lacking. More urgently, plans for coal and renewablegeneration, as well as the cross-border energy trade with India have yet to be firmed up. That said, webelieve that oil will gradually become less significant in the Sri Lankan power generation mix, as thegovernment appears to be putting well-thought policies in place and private sector investors appear moreconfident of the country's business environment.
Sri Lanka relies most significantly on oil, hydropower and increasingly, coal, generation to meet thecountry's electricity demand, but has looked to the possibility of introducing liquidified natural gas (LNG)generation, which thus far has been excluded because of the lack of infrastructure and high cost of fuel visa-vis coal prices. In part, this reflects the country's improving economic outlook which should see electricitydemand rise as well. While state-owned Ceylon Electricity Board (CEB), has demonstrated its keenness togrow the generation pool to ensure that there is sufficient power as demand grows in its Long TermGeneration Expansion Plan, we note that it is also keen to cap the use of pollutive fuel sources.
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