Business

The Darker Side and the Light at the end of the Energy Tunnel

Published

5 years ago

2020/12/27

Eng Parakrama Jayasinghe

Those of us who were hoping for some sanity to emerge in the energy sector were given a severe jolt on Dec. 15 on reading the press release from the Presidential Secretariat, presumably after the Presidents meeting with the Ministers and senior officials of the energy sector. This stated that His Excellency had given instructions to develop action plans to achieve the target of 70% contribution to the electricity sector by 2030 using Hydro, Solar Wind and LNG resources.

This was indeed a shock, as this portends an attempt to constrain the space available for the future development of true renewable energy, thus scuttling the President’s declared target.

Fortunately, good sense has prevailed and an amended press release appeared next day without the reference to LNG as part of the 70% R E Target by 2030. It is also a matter of comfort to listen to the recordings of the above meeting, where the president was very clear in his instructions citing only Hydro, Wind and Solar as the renewable energy sources. But it is a matter of concern to us why Bio Energy which has none of the impediments of Solar and Wind, but has multiple spin off benefits, and has all the attributes of a source of firm power available 24/7 throughout the year, continues to be ignored. Fortunately there is an interest to accelerate the implementation of the many stalled renewable energy projects, thus setting the country on the correct path.

Role and Acceptability of LNG

Natural Gas is certainly not a renewable energy resource. But is it a “Clean” source of energy? Certainly it is a lot “Cleaner” than both coal and oil and is free from some most toxic components such as sulfur, lead, mercury and a plethora of heavy metals and radioactive nucleoids present in coal. But it will certainly emit

* 50% of carbon emissions compared to Coal not zero carbon as in case of Solar and Wind

* Significant amounts of Oxides of Nitrogen

* Potential fugitive emissions of Methane prior to combustion which is 23 time more potent than Carbon Dioxide.

In Sri Lanka’s context, what is even more important is the fact it is an imported resource subject to the vagaries of price fluctuations and the parity rate of exchange, continuing to compromise our energy security. LNG is the lesser evil, and in the light of the CEBs reluctance accept the vast strides in technology which has made it possible for both wind and solar to be upgraded to firm sources of electricity generation, and due to the lack of any significant additions to the generation capacity for over five years, limited use of Natural Gas may have to be viewed as an interim option.

Questions Needing Urgent Answers

However, a very severe uncertainty of the source and the means of supplying the LNG necessary to operate the 300 MW LNG plant remains unresolved, and appears to be ignored, according to the information available to the general public. Sri Lanka escaped a potential disaster by not proceeding with an unsolicited proposal to set up a Floating Storage and Re-gasification Unit (FSRU) and a contract to supply LNG for 20 years on terms totally disadvantageous to us. But the million dollar questions remains unanswered:

1. What is the means of supplying LNG to the proposed 300 MW power plant at Kerawalapitiya?

2. Under whose control will such supplies, presumably from an FSRU operate, and which is the location chosen?

3. If the gas supplies are not available by the time the power plant is commissioned, will the plant be operated with diesel or some other oil and for how long?

4. What will be the extra cost of using such alternate fuels and who will bear the extra cost above the tendered price of Rs 14.85 per unit?

5. In the absence of any plans of resolving such issues, is the government still pursuing options for more LNG plants with India and Japan and now with the USA?

With such a plethora of unanswered questions, even assuming that Sri Lanka will be obliged to proceed with the first 300 MW LNG plant, at least as a means of avoiding any more ruinous emergency power options, isn’t it time to take a very close look at the need or the justification for any further use of LNG ?

As usual Sri Lanka has missed the bus in this instance too. If the first LNG plant was initiated and a viable means of supplying the LNG was initiated in 2016, we could have avoided depending on emergency power for at least two years up to now, and it would have improved the space for greater level of integration of Solar and Wind to the national grid and the consequent reduction of the huge losses incurred by the CEB annually.

Hope for the Future

But on a happier note, the world did not stand still, and technologies are now available to iron out variability and seasonal and diurnal nature of wind and solar energy . For example the State Minister is keen to launch the 100 MW Solar park at Siyambalanduwa and a further 100 MW of solar and 150 MW of wind power in Pooneryn very early. It is very likely that all these projects will generate electricity at costs less than Rs 10.00 per unit. Therefore the addition of adequate battery storage is feasible to at least serve the peak loads as well as to make them sources of firm power. The resultant cost may not surpass the Rs 14.85 per unit expected from the LNG plant.

A place for Prosumers and Electricity as a National Industry

In addition the innovative program of State Minister Duminda Dissanayake to provide 5 kW rooftop solar systems to 100,000 Samurdhi recipients without burdening the treasury is a major paradigm shift in the electricity sector whereby the smallest level of consumer becomes a generator of electricity for his own consumption with a significant surplus and thus becomes a PROSUMER whereby the Electricity Industry becomes a contributor to the GDP instead of being a mere facility for other sectors to grow. With a total of 1.6 Million Samurdhi recipients, the future potential for growth of this program is immense

As a further step in this direction the program to install micro Solar Parks of 100 kW linked to 10,000 distribution transformers will make the Electricity generation a national industry adding further to the GDP. These two programs would add 1,500 MW of Solar PV and create vast employment opportunities.

We earnestly request Minster Dulles Alahapperuma and State Minister Duminda Dissanayake to very seriously evaluate this possibility. This will enable the president to plan for the next goal of 100 % RE

E Mail parajayasingle@gmail.com

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Business

India–Sri Lanka Business Forum highlights new momentum in trade, investment and connectivity

Published

4 hours ago

2026/05/23

Thilina Walpola

Dignitaries at the India-Sri Lanka Business Forum

The Ceylon Chamber of Commerce, in partnership with the Confederation of Indian Industry (CII), organised the India–Sri Lanka Business Forum: Partnering in Sri Lanka’s Growth and Investment and the CII – Ceylon Chamber CEOs Interaction in Mumbai on 13 May 2026. The events brought together senior government representatives, industry leaders, policymakers, and business delegates from India and Sri Lanka to deepen economic engagement and explore new avenues for cooperation across priority sectors.

The discussions reflected growing optimism about India-Sri Lanka economic relations and focused on expanding collaboration in trade, investments, connectivity, tourism, renewable energy, logistics, digital transformation, infrastructure, healthcare, education, manufacturing, and technology.

Participants included Mahishini Colonne, High Commissioner of Sri Lanka to India; Duminda Hulangamuwa, Senior Economic Advisor to the President of Sri Lanka; Dr Rajesh Ravindra Gawande, Secretary (Protocol, FDI, Diaspora & Outreach) and Chief of Protocol, Government of Maharashtra; Ms Priyanga Wickramasinghe, Consul General of Sri Lanka in Mumbai; Krishan Balendra, Chairperson, The Ceylon Chamber of Commerce and Chairperson, John Keells Holdings PLC; Anurag Agarwal, Co-chairman, CII Western Region Sub-committee on International Trade & Investment and Chief Executive Officer, Polycab India Ltd; Vishal Kamat, Chairman, CII Western Region Sub-Committee on Tourism and Hospitality and Executive Director, Kamat Hotels India Ltd; Bingumal Thewarathanthti, Vice Chairperson of the Ceylon Chamber and CEO Standard Chartered Bank Sri Lanka, Vinod Hirdaramani – Deputy Vice Chairperson of the Ceylon Chamber and Chairman Hirdaramani Group, and Shiran Fernando, Secretary General & CEO of the Ceylon Chamber.

Welcoming the delegates, Anurag Agarwal, highlighted the growing momentum in India–Sri Lanka economic relations and the emergence of future-oriented sectors driving bilateral cooperation.

He noted that India and Sri Lanka are at an important phase of economic collaboration, where connectivity, investments, innovation, and sustainable partnerships are creating new opportunities for shared growth. He further emphasised the significant potential for deeper engagement in sectors such as renewable energy, tourism, ICT, logistics, digital services, healthcare, manufacturing, education, and infrastructure.

Business

Proposed oil palm expansion sparks economic and environmental debate

Published

4 hours ago

2026/05/23

Thilina Walpola

Withanage and Kariyawasam speaking to journalists

Move to reconsider the ban on oil palm cultivation has triggered a heated debate among environmentalists, economists and plantation sector stakeholders, with critics warning that replacing rubber plantations with oil palm could weaken one of the country’s most valuable export industries while exposing the nation to long-term environmental and trade risks.

Environmental groups argue that the issue is no longer purely ecological, but a major economic policy question with implications for exports, foreign exchange earnings, rural livelihoods and Sri Lanka’s standing in international markets.

Sri Lanka banned oil palm cultivation in April 2021 through Extraordinary Gazette No. 2222/13 issued by former President Gotabaya Rajapaksa, citing environmental degradation, biodiversity loss, soil erosion and threats to water resources.

However, plantation companies are now reportedly lobbying for the reversal of the ban, arguing that oil palm offers higher short-term commercial returns compared to traditional plantation crops.

Environmentalists and policy analysts, however, caution that the long-term economic costs could outweigh the immediate profits.

Hemantha Withanage of the Environmental Justice Centre said Sri Lanka risks undermining a globally competitive rubber industry in pursuit of a commodity that generates comparatively limited national value.

“Rubber remains one of Sri Lanka’s strongest industrial export sectors. Replacing rubber with oil palm would be economically shortsighted because the downstream rubber manufacturing industry generates far greater export earnings, employment and industrial value addition, he said.

Industry statistics reveal a worrying decline in the rubber sector over the past four decades. Rubber cultivation has fallen from 171,126 hectares in 1982 to around 84,000 hectares in 2024, while production has dropped from 133,200 metric tons in 1980 to approximately 69,185 metric tons last year.

Despite shrinking cultivation, the rubber sector continues to deliver significant export revenue. Sri Lanka earned nearly USD 994 million from rubber exports in 2024, while rubber-based manufactured products generated more than USD 2.5 billion in export income.

The country also imports over USD million worth of raw and processed rubber annually to sustain domestic manufacturing demand, highlighting the strategic importance of maintaining local rubber production.

Analysts warn that further reductions in rubber cultivation could increase import dependency, weaken industrial supply chains and place additional pressure on foreign exchange reserves.

By contrast, Sri Lanka’s palm oil sector contributes relatively little to export earnings. In 2025, Sri Lanka imported 38,210 metric tons of palm oil and 33,696 metric tons of coconut oil, while the value of palm oil imports in 2023 stood at approximately USD 23 million.

Critics argue that oil palm cultivation mainly benefits plantation-level profitability rather than the broader national economy.

Thilak Kariyawasam of FIAN Sri Lanka said the environmental externalities associated with oil palm could eventually translate into significant economic costs.

“The industry’s impact on water resources, soil quality and ecosystems creates hidden financial burdens for the country. Pollution control, water management and biodiversity losses all carry long-term economic consequences that are often ignored in short-term investment calculations, he said.

Environmental groups also raised concerns that Sri Lanka could face reputational risks in export markets if environmentally controversial plantation policies are pursued.

The European Union, one of Sri Lanka’s most important export destinations and the provider of GSP+ trade concessions, has tightened regulations linked to deforestation and environmental sustainability.

By Ifham Nizam

Business

Talawakelle Tea Estates achieves International Organic Certification for Great Western and Logie Teas

Published

4 hours ago

2026/05/23

Thilina Walpola

(Up) The Logie Estate, factory is dedicated exclusively to organic tea production. (Down) Great Western Estate, certified for organic tea production under EU, USDA, and JAS standards

Talawakelle Tea Estates PLC has secured internationally recognised organic certification. A member of the Hayleys Plantations Sector and one of Sri Lanka’s premier Regional Plantation Companies, this milestone enables the Company to market certified organic teas under its renowned Great Western and Logie garden marks.

The certification spans three major global standards: the EU Organic Regulation of the European Union, the National Organic Program (NOP-US) of the United States Department of Agriculture, and the Japanese Agricultural Standards (JAS) for organic products. With this achievement, Talawakelle Tea Estates is now positioned to supply premium organic teas to international markets that demand the highest standards of certification, traceability, and product integrity.

“We are proud to reach this significant milestone after more than four years of dedicated effort to build a fully compliant organic cultivation and processing system that meets stringent international standards. This achievement shows the strength of our partnerships with the Tea Research Institute (TRI) and internationally qualified consultants and, most importantly, the commitment and collaboration of our estate and corporate teams. Together, we have established a robust and sustainable organic management framework that will support our long-term vision.” Talawakelle Tea Estates, Director / CEO, Nishantha Abeysinghe added.

To ensure consistent compliance with international standards, Talawakelle Tea Estates appointed dedicated full-time personnel from its estate teams and corporate sustainability division to oversee and manage every stage of the organic value chain – from cultivation to final manufacture.

The Company has also developed an end-to-end organic cultivation and processing management system covering the full value chain – from field-level practices to final manufacture – ensuring a structured and carefully monitored approach to organic tea production.

To safeguard product integrity and eliminate the risk of cross-contamination with conventional teas, the Company has designated low-risk fields exclusively for organic cultivation and dedicated the Logie factory entirely to organic tea production, minimising the risk of cross-contamination.

Following a series of rigorous audits, Talawakelle Tea Estates has secured full certification and is now set to launch its certified organic tea range globally under the prestigious Great Western and Logie garden marks names bringing together heritage and sustainability.

This achievement marks an important step in the Company’s broader journey to build a more sustainable, nature-based product portfolio in response to growing global demand. By combining strong garden identities with internationally recognised organic standards, Talawakelle Tea Estates continues to strengthen its position in the premium tea segment.