The Ceylon Electricity Board (CEB) is in one of the strongest hydro storage positions in recent memory, but it has mismanaged key hydropower complexes, causing an increase in oil-powered electricity generation and and costs.

Energy expert Dr. Vidura Ralapanawe has raised serious concerns over CEB’s operational decisions, particularly the skewed use of the Mahaweli and Laxapana hydropower complexes. “By mid-May, the system had ample storage — about 60% overall — which is actually a very good position to be in just before the South-West monsoon rains,” he said. “But within that headline figure is a huge imbalance. Mahaweli reservoirs are near 75%, while Laxapana is languishing at 30%.”

This lopsided storage has already caused direct operational problems. The Canyon power station, which is fed by the Maussakele Reservoir in the Laxapana complex, has been forced to reduce its output. The 60MW plant is now operating at just 40MW due to limited water availability. Downstream, the 100MW New Laxapana station is similarly constrained.

The Laxapana complex is not just another hydropower asset — it plays a vital role in Colombo’s drinking water supply. It is required to run continuously to maintain flows for water treatment plants. “That means the CEB must generate from Laxapana 24/7, no matter what,” Ralapanawe said. “So how did they allow it to reach such a critically low level, especially when Mahaweli reservoirs are full?”

Ralpanawe said: “Instead of making adjustments to maintain operational flexibility, the CEB appears to have run the Laxapana complex harder than necessary in previous months while underutilising Mahaweli, where Victoria and Randenigala are sitting comfortably. The consequence? More reliance on oil-based thermal generation, even as the country’s dams remain well-stocked.”

“This is not just a technical problem — it’s an economic one,” he stressed. “Oil is expensive. When you underutilise hydropower in a year like this, you’re actively choosing to drive up the cost of generation.”

The apparent lack of coordination between the Mahaweli and Laxapana systems is especially baffling given the CEB’s long-standing familiarity with both. “The CEB has operated these systems for over 40 years. They know the inflows, the rainfall patterns, the seasonal irrigation releases — none of this is new,” Ralapanawe said.

Moreover, the growing integration of AI and data-driven forecasting tools in the global energy sector makes such mismanagement increasingly indefensible. “If, in the age of AI, we’re still hearing that ‘it’s too complex’ to manage these reservoirs in tandem, then something is seriously wrong,” he added.

Dr. Ralapanawe urges the CEB to provide an explanation: “Why was Mahaweli underdispatched when it was full? Why was Laxapana overused to the point that we now can’t get full capacity from critical plants like Canyon and New Laxapana? What is the economic impact of burning more oil than necessary?”

The missteps are already costing the public. Higher generation costs will ultimately be passed on to consumers in the form of increased tariffs, a burden made heavier in an already strained economy,” says Dr. Ralapanawe.

Ironically, 2025 was shaping up to be a strong hydro year, offering a rare opportunity for cost savings and reduced fossil fuel use. Instead, mismanagement has left key reservoirs unbalanced and locked the system into a more expensive operating mode — one that benefits oil suppliers but punishes the average household and industry.

Dr. Ralapanawe’s message is blunt: “This is not just about water and electricity. This is about public accountability and economic responsibility. If the CEB cannot manage two hydro systems properly with decades of data at its fingertips, then it must rethink its leadership and planning structures — or risk repeating the same costly mistakes year after year.”

Our efforts to contact CEB officials for comment were in vain.

By Ifham Nizam