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Playing blind man’s bluff with tariff man

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President Trump unleashing the tariff tsunami

While the whole world was waiting anxiously for President Donald J. Trump, a self- proclaimed “tariff man”, to present his plan for “reciprocal tariffs” on his “Liberation Day”, an American commentator Jon Stewart declared on “The Weekly Show” podcast that he knew what “Donald Trump’s whole plan” was. Since Trump was elected, I have been closely following the developments in Washington but didn’t come across any other such claims. Yet, I was not surprised by Jon Stewart’s claim because he is a highly paid comedian and his podcast was recorded on the day before President Trump unveiled his plan. But now I know Jon Stewart was not the only person who knew how Trump’s plan for “reciprocal tariffs” would unfold. Most of our politicians (other than those in the government) had known what the plan was, much in advance of the official announcement. Now they are on our evening TV news blaming the government for not taking measures to pre-empt Trump’s move and providing their expert advice on how the government should engage with the US!

Tariff Tsunami

Unlike these politicians and their advisers, I did not expect President Trump to slap punitive tariffs of 44 percent on our exports. Our garment exports to the United States expanded from the early 1980s to December 2004, due to a very generous textile and apparel quota extended by the United States under the now-defunct Agreement on Textiles and Clothing. It was a clear and very successful example of providing trading opportunities as development aid by a development partner. However, we were also paying high tariffs for these exports but remained competitive in the US market as quotas ensured a reasonable market share. But after 2004, with the end of the quotas, the Sri Lankan exporters started to face strong competition in the US market, particularly from countries that had duty-free market access. So, in December 2004, Sri Lanka was hit by two tsunamis, the Asian Tsunami and the Tariff Tsunami.

On 06 January 2005, The Wall Street Journal published on its op-ed page an opinion piece titled, “Tariff Tsunami,” highlighting this: “… some eye-popping statistics showing how U.S. tariffs discriminate against world’s poor, including in particular those in Sri Lanka. The duties paid on Sri Lankan garment exports to the US in 2003 were $238.5 million – which was more than the total duties ($227 million) paid that same year on every product exported to the U.S. from all six countries of Scandinavia. That’s despite the fact that Scandinavia exports roughly 12 times more to the US than does Sri Lanka – $23.8 billion versus $1.8 billion in 2003. The average US duty rate from products from those rich nations of Northern Europe is about 1%, while the average rate on Sri Lankan goods is 13.8% and 16.6% on the bulk of its exports, which happens to be clothing.”

Twenty-one years later, if one checks the US Customs data for 2024 a similar pattern will be observed, as our exports’ basket to the US and the import duties in the US have not changed much. Though, some of our exports, like tea, gem stones and rubber products, have duty free access. for some apparel products we pay 25% tariff resulting in very high average tariff.

When Trump promised, during his campaign for the White House, a 10 percent tariff on all imports from all countries and a higher tariff on China, I expected Sri Lanka to improve her competitiveness and anticipated a shift in sourcing from China to other Asian countries. I also believed that the “slow surge in orders” received by Sri Lankan apparel exporters after the US elections, as well as the investment by an American engineering technology group at Wathupitiwala, could have resulted from this discreet shift of sourcing. (Please read my article published on 8th January in “The Island.”). It also appeared that when US Ambassador Julie Chung stated, last October, at the foundation stone laying ceremony for a new American factory at Wathupitiwala, “SHIELD’s decision to shift its facility in China to establish a manufacturing facility here in Sri Lanka is a testament to the growing interest of US investment in Sri Lanka …. If the new government can strengthen the investment climate, implement anti-corruption measures, and strengthen business-friendly governance and transparency, there is potential for even more manufacturers to make similar moves,” she, too, didn’t expect that, six months later, the United States would hit us with punitive tariffs. Because no American investor would ever think of investing in Sri Lanka with an over 44% tariff.

A guessing game on the tariff plan

When President Trump announced, in early February, his “Fair and Reciprocal Plan” on Trade, he did not provide much information about the plan. Then a few weeks later, the Director of the National Economic Council, Kevin Hassett, stated that 10 to 15 countries accounted for America’s “entire trillion-dollar trade deficit” and the Treasury Secretary, Scott Bessent, mooted a plan for a higher tariff for the ‘Dirty 15’, a group of countries that have large trade imbalances. But they did so without naming the countries they were planning to target. Based on these two statements a guessing game started all over the world on the composition of this group. Still, most of the observers expected these countries to be those with highest goods trading deficit with the United States. In 2024, the United States faced highest trade deficits with China ($291 billion), the EU ($236 billion), Mexico ($172 billion), Vietnam ($124 billion), and Taiwan ($74 billion). Compared to these countries, Sri Lanka’s trade deficit with the United States is relatively insignificant.

However, with these declarations, there was a remote possibility of Sri Lanka getting hit by a higher tariff due to our relatively large trade deficit as a percentage of the total trade. For many years this was always raised by the American negotiators during the negotiations at bilateral multilateral levels. Though we had always managed to settle it amicably, with mutually acceptable explanations, the issue had remained as an irritant in our bilateral relations. Therefore, the Sri Lankan Embassy in Washington, and appropriate government agencies in Colombo, with inside knowledge of the views of the US trade officials on the bilateral trade deficit, should have prepared for this worst-case scenario, however remote it was, and strategised on possible responses.

Highest tariff on countries “which nobody has ever heard of”

A few weeks after the American elections, at a birthday party, I bumped into a Sri Lankan expert on the United States who works on these issues for the government. During our conversation I raised Trump’s proposed tariff with him, and inquired whether they had initiated any study on it, particularly any possible adverse impact on Sri Lanka. “Don’t worry,” he quipped, “…

Trump doesn’t know where Sri Lanka is. So, we will be the last to get hit!” As we were standing at the bar, sipping our first round of drinks, I didn’t take the conversation any further. But what he said reminded me of my first visit to the office of the United States Trade Representative, in Washington. That was in January 1998. After examining my freshly issued State Department diplomatic ID, the security guard inquired, very politely, where Sri Lanka was. And I explained, with the help of a quick sketch, where we are located. During the next three years, during my frequent visits to that building, she always welcomed me with a broad smile and remembered my name and where I was from. During my tour in the United States, I met few other people who had never heard of a country called Sri Lanka.

Unfortunately, predictably unpredictable Donald J. Trump had decided to impose the highest reciprocal tariffs on countries “which nobody has ever heard of,” Lesotho and the French Archipelago of Saint Pierre and Miquelon! Both got 50% tariffs under the new reciprocal tariff plan. Since the beginning of the century, Lesotho, a tiny landlocked African country, managed to expand her exports to the US under the African Growth and Opportunities Act (AGOA) and is considered as one of the success stories under that programme. But during his annual address to Congress last month, President Trump, while defending his extensive cuts in the US aid budget, singled out a past aid project of “eight million dollars to promote LGBTQI+ in the African nation of Lesotho … a country that nobody has ever heard of.” In spite of its size, Lesotho refused to ignore the comment or take the matter lightly.

Foreign Minister Lejone Mpotjoane declared that the Lesotho government was “shocked and embarrassed” by the comments because Lesotho “… did not expect a head of state to refer to another sovereign nation in such a manner” and had sent an official protest note. Now, Mr. Mpotjoane must be a contented man. With the highest tariffs in place, the entire world has heard of a country called Lesotho! Saint Pierre and Miquelon, with a population of roughly 6,000 people and very limited trade with the US was the other country to get hit by 50% tariff. However, for this a tiny French archipelago, located off the shores of Canada, the time under the global limelight was short-lived as soon after the announcement the US administration made a U-turn and reduced the tariff to 10%.

Some of the other countries in this group with highest tariffs are not so tiny and are more well known. The table illustrates the United States imports from these countries and trade balance (in USD million) during 2023. (See Table 1)

Although President Trump has declared that these reciprocal tariffs are necessary to tackle America’s massive $1.2 trillion goods trade deficit, from this group of countries only Vietnam with $109 billion surplus and Cambodia with $11.8 billion surplus can contribute meaningfully towards a reduction of that deficit. The US trade deficit with all other countries in the group are minimal and together accounts for less than $5 billion. Based on 2023 statistics it is difficult to even understand Syria’s inclusion in the list. Then how did these countries end up with highest reciprocal tariffs?

Calculation of reciprocal tariffs

President Trump, while presenting his new tariff plan, stated that “reciprocal means they do it to us, and we do it to them. Very simple. Can’t get simpler than that,” and according to his Executive Order on the reciprocal tariffs, these are based on the average tariff rate charged to US exports, plus currency manipulation and other trade barriers. However, in many countries it is very difficult to quantify the tariffs, currency manipulation and other trade barriers. So, the calculation was simply done for each country by taking its trade in goods deficit for 2024, then dividing that by the total value of imports which provides the size of the trade imbalance in percentage terms. The US administration simply presumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Therefore, it divided that percentage number by 2 to fix the amount of reciprocal tariff. If the presumption on which the tariff is fixed is inaccurate then the burden of proof is with the country affected by the tariffs.

Way forward – ‘Make Haste Slowly’

With a 90-day grace period, Sri Lanka has sufficient time to move forward thoughtfully, appropriately, and discreetly. However, it is essential to negotiate with the American Administration the removal of the reciprocal tariffs, and if that is not negotiable, then reduce them to the global average. As the livelihood of thousands of poor workers are dependent on it, the government should act fast without making any wrong moves. In other words, it is time to make haste, slowly. But it is important to understand, as of now, it is a guessing game like blind man’s bluff, with modified rules: only two players at a time, and you are blindfolded. You have to guess where the other player stands and catch him, while the game is played on a cliff edge.

By Gomi Senadhira

(The writer, a former public servant and a diplomat, can be reached at senadhiragomi@gmail.com)



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Approach to constitutional reform

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SWRD Bandaranaike

The S.J.V. Chelvanayakam KC Memorial Lecture delivered on 26 April, at Jaffna Central College, by Professor G.L. Peiris, an academic with outstanding credentials, was published, under the title, “Federalism and paths to constitutional reform,” in The Island of 27 April, 2026.

In Part II of the publication, titled “Advocacy of Federalism: Origins and Context,” Professor Peiris states: “At the core of political convictions he held sacrosanct was his unremitting commitment to federalism…”. Contrary to popular belief, however, federalism in our country had its origins in issues which were not connected with ethnicity. At the inception, this had to do with aspirations, not of the Tamils but of the Kandyan Sinhalese. The Kandyan National Assembly, in its representations to the Donoughmore Commission in 1927, declared: “Ours is not a communal claim or a claim for the aggrandizement of a few. It is the claim of a nation to live its own life and realise its own destiny”.

Commenting on S.W.R.D. Bandaranaike’s views, Professor Peiris states: “Soon after his return from Oxford, as a prominent member of the Ceylon National Congress, was an advocate of federalism. He went so far as to characterise federalism as ‘the only solution to our political problems”.

THE COMMON THREAD

The thread that is common to the sources cited above is that while their focus was on the political framework, there is not even a hint as to the territorial units to which the political framework of federalism is to apply. With time the Tamil “nation” claimed that their federal State was to be the Northern and Eastern Provinces of Sri Lanka. However, the Kandyan “nation” was silent on this issue. Since Britain annexed the Kandyan Kingdom and the unified, then Ceylon in 1815, for all intents and purposes it would be reasonable to assume that the claim of the Kandyan “nation” was to be the region under the last Kandyan King, leaving the Western and Southern coastal regions for the Rest of the “nation”.

Chelvanayakam

Sri Lanka, while being a colony under the British, was not interested in political frameworks. Instead, the British were interested in structural arrangements that facilitated Administration. It is evident from the evolutionary processes explored by the British that subdivided units of a State are critical not only for effective Administration but also for the political framework that ensures political stability. Federalism, advocated by the Tamil and Kandyan Leaderships for territorial units, as claimed by them, would inevitably lead to political instability. The lesson to be learnt is not to start with political frameworks, such as Federalism, but to first decide on the territorial units, within which a State functions, to ensure stability, and then frame political aspirations of the People belonging to such a State, in order to ensure political and structural stability.

LESSONS of HISTORY

Material from an article, dated 16 June, 2016

“When the British took control of the Dutch possessions in former Sri Lanka, in 1796, the Kandyan Kingdom was independent and separate from the Maritime region. The Kandyan Kingdom consisted of the “central highlands with the eastern and southeastern coastal strips”. It was after ceding of the Kingdom, at the Kandyan Convention of 1815, and after the rebellion of 1817-1818, that the two regions were merged. However, despite the merger, the administration of the two regions remained divorced from each other, with the Kandyan region being divided into 11 Districts, and the Maritime region into five, creating a total of 16 Districts for the administration of the whole country (Sir Charles Collins, Public Administration of Ceylon, 1951, p. 49).

“The above arrangements continued until the recommendations of the Colebrook – Cameron Commission. In 1832, the recommendations of the Commission were accepted , “… and the separate administrative system for the Kandyan provinces was abolished and amalgamated with the territories on the littoral acquired from the V.O.C. in a single unified administration structure for the whole island. The existing provincial boundaries within the two administrative divisions – the Kandyan and maritime provinces – were redrawn, and a new set of five provincial units, of which only one – the Central Province – was Kandyan pure and simple, was established. The new provincial boundaries cut across the traditional divisions and placed many Kandyan regions under the administrative control of the old maritime provinces” (K.M.de Silva, A History of Sri Lanka, 1981, p. 263), continued until as late as 1889, resulting in nine Provinces for the sole purpose of facilitating the Colonial administration. In point of fact, the Province never functioned as the administrative unit. Instead, the administrative unit was essentially the District, and the situation has remained so throughout the Colonial period and into this day. According to Sir Charles Collins cited above: “Most provinces were divided into districts, each Government Agent having charge of his own district, with general supervision over the whole province. The districts not in the direct charge of Government Agents were under the control of assistant Government Agents”. (Ibid, p. 62.)

PRIORITISING POLITICS OVER STABILITY

The lesson learnt by the British was that if a Colony is to be Administered effectively, the Colonizer had to choose the most appropriate unit of administration. Similarly, to an Independent Sovereign State, Territorial Stability should be its foremost priority. This means deciding on the most structurally secure territorial unit within which political power sharing should operate and not prioritise political frameworks, such as Federalism, at the expense of the structural stability of the State. Political instability would have been inevitable had Sri Lanka succumbed to pressures from the Tamil and Kandyan Leaderships.

Although Britain was not concerned with territorial stability, they recognised that the District was the most effective unit for effective administration. In fact, the 1977 Constitution describes the Territory of Sri Lanka in terms of Administrative Districts. Despite this, it was the Indo-Lanka Accord that first recognised the Northern and Eastern Provinces as political units. Following this, the 13th Amendment of 1987 extended this recognition to all Provinces.

The adoption of the Province as the political unit may not have had an impact on the territorial integrity of the Sri Lanka State, except for the Northern and Eastern Provinces, judging from the events that followed over three-plus brutal decades. The transformation of the territory of Sri Lanka, from Administrative Districts to Provinces and Provincial Councils, is the direct result of prioritising politics over territorial stability. For India to be the handmaiden of this transformation is beyond comprehension because instability in Sri Lanka, in whatever form, would impact on India’s own territorial integrity. This serious blunder cannot be ignored any further for the sake of both Sri Lanka and India. It is imperative that measures are taken to engage in a course correction through Constitutional Reform.

PROPOSED CONSTITUTIONAL REFORMS

The path to Constitutional Reform should start with the territorial subdivision of the Sri Lankan State into Districts, not only to ensure the territorial integrity of the State but also to improve administrative and development efficiencies coupled with Local Government units; a lesson learnt from the British. Any political powers devolved/decentralised to Districts should be the responsibility of District Councils, elected by representatives to Local Governments within each District.

Political power at the Centre should reflect the commitment to a single Sri Lankan Nation, through an elected Legislature, with Executive Powers being shared by a President/Prime Minister, with a Cabinet made up of all communities, in the ratio represented in Parliament. An attempt to share Executive Power with all communities, in an inclusive Cabinet, has not been the practice in the past, and under the present government, as well, despite its strident calls for unity and reconciliation. Consequently, the tendency for minority communities is to seek peripheral power to the maximum extent possible.

CONCLUSION

The approach to Constitutional making has been how best to accommodate political power in the form of Federalism, first by the Kandyan “nation” and later by the Tamil “nation”. The claim by the Tamil Leadership morphed from Federalism to a Separate State resulting in tragedies of an unimaginable order, to the point of threatening the very existence of the Sri Lankan State.

The current arrangement is based on Power being devolved to Provinces, in the form of Provincial Councils, with no regard the Province, makes to the territorial durability of the Sri Lanka State. How successive Governments hope to prevent threats to territorial vulnerabilities is to curtail the operation of sensitive provisions of devolved powers. This is being disingenuous.

On the other hand, the more direct and forthright approach to Constitutional Reform is to make the District the unit of peripheral power in order to ensure territorial stability and effective peripheral development and share Executive Power with communities in the ratio of their representation in the Legislature. The first could be achieved through a referendum and the second by the President/Prime Minister of any government. This approach prioritises territorial stability over political power; a change that has eluded policymakers. Therefore, it is imperative that territorial stability is given the foremost place in Constitutional Reform processes for the sake of not only Sri Lanka but also for India, for reasons of connectivity.

by Neville Ladduwahetty

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Time to get ready to face power

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The power cuts are already here. Perhaps, even before the date predicted by the Public Utilities Commision of Sri Lanka (PUCSL. The peak load has gone well past the threshold they indicated as the tipping point of 3030 MW of peak load. It is now will past 3100 MW and growing, perhaps triggered by the continued heatwave making the use of air conditioners and fans more frequent and by a wider group of consumers. The government insists there is no intention of power cuts but each of us have experienced some form of power outage, without notice, at some time or other.

It is in this scenario that the Ceylon Electricty Board (CEB), or whatever it is called now, had directed all roof top solar projects, over 300 MW capacity, to shut down for the period 10th April to 20th April.

This is in addition to the curtailment of all ground mounted solar and wind projects, and even mini hydro projects, without compensation, going on for some months.

One year of inaction by CEB with the problem staring in the face

If will be recalled that the same demand was made in April, 2025, after the debacle of the countrywide blackout on 9th February, 2025, whether caused by a monkey or otherwise.

The question to be raised is what steps have been taken by the then CEB, or the Ministry to anticipate the situation this year, too, and to try and mitigate the same.

The easy answer is absolutely nothing. If at all what has been done is unilaterally prevent any further addition of Roof Top Solar PV, under the provisions of the Surya Bala Sangramaya (SBS), is, undoubtedly, the only short term and economical means to add low cost renewable electrical energy to the grid.

The architect of the SBS, the Sustainable Energy Authority is deafening by their silence, when their signature project of prime national importance has been sabotaged, and now even the performance of the already installed systems are being curtailed.

This action is totally unbelievable when the use of expensive oil-based generation will continue unabated, even during the day, when there is so much solar energy already installed. Of course, the age-old excuse will be trotted out, of the non-firm nature of Solar and Wind and problems of grid stability, etc.

Many useful and practical solutions to face the growing issue of how to integrate the essential low cost but variable resources of solar and wind to the grid as an aftermath of the blackout were discussed over a year ago.

But nothing seems to have even been attempted. The most prominent among these was the proposal to add 300 MW of grid scale batteries, as indicated in the already-approved Long Term Electricity Generation Plan ( LTEGP 2024 – 2044,) of which 100 MW should have been in use by 2026. The tender for the addition of 16 X 10 MW battery storage at selected grid substations was called over a year ago. Some expectation of sanity

It is under these circumstances that the PUCSL called for a stakeholder consultation on the 10th April, 2026, after circulating a concept note, which was well attended. It was a breath of fresh air, in view of the downhill slide of the entire electricity sector in the recent months compounded by the raging controversy of the coal scam and the rapidly increased use of expensive diesel, in addition to the other fossil fuels, just to keep up the generation to match the demand. The double whammy of the doubling of the fuel prices , exacerbated the hit on not only the consumer’s monthly bill, but the national economy and balance of payments.

Therefore, it was most encouraging to note from the PUCSL’s concept note that sanity has prevailed at last. We have been demandin–g some concrete strategies and time based targets to rid at least the electricity sector from the use of expensive, polluting fossil fuels, commencing with oil. This is the only means by which the utility could hope to achieve some degree of economic and financial viability. They have continued to burden the consumer and the country by continually jacking up the consumer tariff, while ignoring any prudent means to clean up their Act. As a matter of interest, the CEB’s own data of 2023 shows that it is possible to save some Rs 113 Billion annually by replacing all oil-based generation using renewables. The country could have saved over $ 700 Million in Foreign Exchange and the Consumer Tariff could have been lowered by Rs 7.00 per Unit across all segments of consumers.

Therefore, the PUCSL concept paper out lines, some credible measures to eliminate the use of all of forms of oil for power generation in stages. The three tier of approach, outlined as option 1 to 3, reproduced here, should be commended for adopting a pragmatic approach, with very good chance of success.

Proposed options by PUCSL

(See Options 1 Peak Shaving Approach by 2027 and Option 2: Eliminating 2.06 GWh/day of diesel-based generation)

Considering even the recent past when we achieved a status of zero oil use, as compared to the present sorry status, this is not an extremely difficult task. We will have to substitute Solar PV to bridge the gap of reduced Hydro during dry months.

(See diagram 1)

RE Contribution 69% % Oil Usage 6.2 % No Diesel

(See diagram 2)

In Contrast on 30th March RE Contribution was only -43,5%

and oil use has gone up to -29.59%

However, as outlined in the introductory paragraphs of the concept paper, the driving force to promote this change is the early declaration of appropriately worked out tariffs for installation of storage batteries and delivery of the stored energy to the grid.

With the total lack of progress of proposals in the LTEGP 2025-2044 by the state institutions, it is prudent to assume any future initiatives can only come from private sector participation.

Using the power granted by the recently ratified Electricity Act NO, 36 (As amended) the PUCSL has moved with commendable speed to develop the Feed in Tariff declarations needed to enable the achievement of the above objectives and a further stakeholder consultation was held on the 24th of April when more detailed proposals were put forward.

However, although the responsibility of publishing the tariff remains with the PUCSL, unless the National System Operator ( NSO ), tasked with the planning and implementation of Electricity Sector developments , takes urgent action to implement the desired changes as a highest priority task, nothing will be gained to help the country to get out of this quagmire.

The Consumer Continues to be Burdened.

Further, as the time table proposed by the PUCSL itself indicates, even the first of the options can be implemented only in 2027, with the others following up to the year 2030.

These are very encouraging time targets and the consumers will eagerly await their achievement.

However, the threat of power cuts, as well as continuing increase in consumer tariff to fuel the use of diesel for power generation, is real and current. A further tariff increase of 18% has been demanded by the NSO, on top of the 15% granted on 1st April, 2026.

The Immediate Options Available to Consumers.

a) The CEB now refuses to provide any grid connection for integration of any rooftop solar PV systems under the Surya Bala Sangraamaya.

b) The only way available to the consumers is to install Off grid roof top solar systems with adequate batteries to be none dependent on the grid. Use the grid only during the off peak hours.

c) During most periods of the year, even under cloudy conditions there is some solar generation. To ensure the daily consumption is more than covered by the solar input and any surplus is used to charge the battery, to the level adequate to manage the evening and peak hour demand, the capacity of the solar panels and battery have to be determined.

d) It is to be noted that although only the relatively high-end domestic consumers could find the proposed scheme financially feasible under the present cost regimes, which will improve further when the second tariff increase is announced shortly, to those consuming over 250 Units/Month, their engagement has a sector wise positive implication which is beneficial to all levels of consumers.

e) The scheme will operate in an off grid mode, without exports to the grid at any time. Therefore, they will not contribute to the often voiced worries of over voltage, instability and variability in the national grid.

f) Once the PUCSL announces the required FIT and the NSO or the Distribution Companies institutes the necessary facilities, such as smart meters, such consumers, too, can further assist the grid by export of any excess they generate.

Proposal to Avoid Power Cuts Implementable by Domestic Consumers

There are several drivers which will attract the potential ” Prosumers” to adopt this option without delay.

* The consumer tariff will continue to rise

* Even the former Roof Top Solar Systems, without batteries, does not provide power during the power cuts or blackouts

* At present day prices, the investment is financially feasible, based on the savings of the current level of monthly electricity bill. A substantial bank loan can be comfortably settled from the savings

* Now cooking with electricity is no longer a financial burden but can save one from the cost and danger of LPG shortages and queues

* What you, do based on your economic ability, will be a service to all consumers as the resultant reduction of Peak Demand means the use of Diesel can be gradually reduced and the lower end consumers, too, will benefit.

* You will enhance your green credentials with your own financial benefits.

The overall benefit to the grid and other consumers

If the element of exorbitant cost of diesel-based generation is removed then there is no need for the increase of consumer tariff for all consumers.

What is more important is that trimming the peak load would drastically reduce the need for any power shredding that is happening on the sly now and thereby benefit all consumers,

The summary of Financial Analysis illustrating the viability based on currently available data is given here. This will improve drastically if a further increase in consumer tariff is granted, which appears inevitable. (See Table 01 – The basic data used for this analysis is available on request.)

by Eng Parakrama Jayasinghe

parajayasinghe@gmail.com

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From Coal to Solar: China’s sunken mines power a Green Revolution: Lessons for Sri Lanka

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A floating solar farm on a coal mining subsidence area in Panji district of Huainan, Anhui province, China, on June 7, 2017. (Image courtesy China Daily)

In a striking symbol of the global energy transition, vast stretches of once-abandoned coal mines in China have been reborn, not as relics of an industrial past, but as shimmering hubs of renewable energy.

What were once scarred landscapes, destabilised by years of mining, and later submerged by landslides and floods, have now been transformed into expansive artificial lakes.

Floating atop these waters are some of the world’s largest solar power installations, quietly generating clean electricity on a massive scale.

Among the most notable are the Fuyang Floating Solar Farm and the Huainan Floating Solar Farm. Together, they represent a remarkable engineering and environmental achievement.

The Fuyang facility boasts an installed capacity of 650 megawatts, producing approximately 700 million kilowatt-hours of electricity annually. Even more impressive, the Huainan project reaches a staggering 1 gigawatt capacity, generating nearly 1.8 billion kilowatt-hours each year. Combined, these floating giants produce enough electricity to power millions of homes without burning a single lump of coal.

A former General Manager of the Ceylon Electricity Board (CEB), a veteran electrical engineer, described the development as “a glimpse into the future of energy systems.”

“What China has demonstrated is not just technological capability, but strategic foresight. Turning environmentally degraded land into clean energy assets is the kind of thinking countries like Sri Lanka must begin to adopt,” he said.

Why solar on water?

Floating solar, or “floatovoltaics,” offers a range of advantages that traditional land-based solar farms cannot easily match.

Water naturally cools solar panels, improving their efficiency by an estimated 10 to 15 percent. In hot climates, this cooling effect can significantly boost electricity generation.

Additionally, the panels reduce water evaporation, a crucial benefit in regions facing water stress. By limiting sunlight penetration, they also help suppress algae growth, improving water quality.

Perhaps, most importantly, floating solar eliminates the need for large tracts of land. In densely populated or agriculture-dependent countries, this is a game changer.

A dual economy: Fish and power

In an innovative twist, some of these floating solar farms incorporate aquaculture beneath the panels. Known as the “fisheries + solar” model, it allows communities to cultivate fish in the shaded waters below, creating a dual-income system, energy production above, food production below.

This integrated approach not only maximises resource use but also supports local livelihoods, blending sustainability with economic resilience.

Environmental dividends

The environmental benefits are substantial. The Fuyang project alone reduces carbon dioxide emissions by an estimated 580,000 tons annually, while the Huainan facility cuts emissions by around 1.6 million tons each year.

Beyond emissions, these projects reclaim landscapes once deemed unusable—areas heavily damaged by coal extraction. In doing so, they rewrite the narrative of industrial decline into one of ecological restoration and innovation.

Sri Lanka: A nation poised for floating solar For Sri Lanka, the implications are profound.

Unlike China’s abandoned coal pits, Sri Lanka possesses thousands of irrigation tanks, reservoirs, and hydropower catchments that could serve as ideal platforms for floating solar. From the ancient tank systems of the dry zone to major reservoirs like Victoria Dam and Randenigala Reservoir, the country holds untapped potential to generate clean electricity without sacrificing precious land.

The country’s reliance on thermal power, particularly during drought periods when hydropower declines—has long been a challenge. Floating solar could provide a stabilising solution, reducing dependence on costly fossil fuels while complementing existing hydroelectric infrastructure.

Energy analysts note that integrating floating solar with hydropower reservoirs can create a hybrid system: solar power during the day, hydropower balancing supply at night. This synergy enhances grid stability and reduces overall generation costs.

The former CEB official stressed the urgency:

“Sri Lanka cannot afford to delay. With rising energy demand and climate pressures, we must explore every viable renewable option. Floating solar on our reservoirs is one of the most practical and scalable solutions available.”

Challenges and the road ahead

However, experts caution that careful planning is essential. Environmental assessments, grid integration, and financing mechanisms must be properly addressed. Community engagement, especially where fisheries are involved—will also be key.

Yet the blueprint already exists.

China’s transformation of submerged coal mines into renewable energy hubs offers more than inspiration—it provides a working model. For Sri Lanka, adapting that model to its own geography could mark a decisive step toward energy independence.

China’s floating solar farms stand today as one of the clearest symbols of a world in transition—from fossil fuels to renewables, from environmental degradation to restoration.

For Sri Lanka, the message is equally clear: the future of energy may not lie on land alone—but on water, where sunlight meets innovation.

If harnessed wisely, Sri Lanka’s  vast network of reservoirs could one day mirror that transformation, turning calm waters into engines of sustainable growth.

by Ifham Nizam

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