COLOMBO – Sri Lanka is preparing to introduce a special tariff structure for solar power with battery storage, enabling electricity supply during the night-time peak hours, Energy Minister Kumara Jayakody announced in Parliament.

The move aims to attract investors and accelerate the country’s transition to renewable energy, in line with Sri Lanka’s goal of generating 70% of its electricity from renewable sources.

“It is likely to be a promotional tariff,” Minister Jayakody said, adding “We want investors to come forward, and we will ensure that it is a profitable venture for them.”

Under the proposed plan, batteries will be charged during daylight hours, and the stored energy will be dispatched to the grid at night, addressing demand fluctuations and reducing dependence on fossil fuels. A committee has been appointed to study the feasibility of the tariff, and once finalized, the proposal will be submitted to the Cabinet for approval.

Sri Lanka has seen a surge in rooftop solar installations over the past two years. However, this rapid expansion has created grid stability issues, particularly on weekends when solar power generation is high but demand is low. Recently, the country experienced a cascading power failure on a Sunday, attributed to an imbalance between solar output and conventional power plant operations.

To address these challenges, the Ceylon Electricity Board (CEB) is exploring battery energy storage systems (BESS) and pumped-storage hydroelectric plants, which can help stabilize the grid by regulating energy supply during peak hours.

The government is also considering regulations on new renewable energy projects, requiring them to include ramping mechanisms to minimize short-term fluctuations in power generation.

In some countries, net metering policies—where excess solar power is fed into the grid—are being phased out in favour of a “self-produced, self-consumed” model, where households and businesses are encouraged to store and use their own solar energy rather than relying on grid exports.

The so-called levelized cost of energy (LCOE) for renewables does not fully capture the additional costs utilities incur, such as grid upgrades, backup thermal plants, and storage solutions, making grid management more complex and costly.

Sri Lanka’s renewable energy transition comes at a time when Germany, a global leader in renewables, is grappling with high electricity prices and industrial slowdowns. The government led by Friedrich Merz is now considering cutting grid fees to counter rising costs that have driven some industries to relocate.

Germany’s energy sector has faced significant volatility, with renewable supply fluctuating between 125% and 18% of national demand in different months, highlighting the challenges of managing intermittent energy sources without sufficient backup capacity.

-ENCL