The Hon. Anura Karunathilaka - Minister of Ports and Civil Aviation

¶ 01 Hon. Chairman, I am pleased to speak after Hon. Chamara Sampath. However, had he listened to Hon. Ravindra Bandara’s figures, he would not have said “not even 1 MW was added”—because 702 MW were added in 2025.

¶ 02 Turning to my remarks: when discussing the 2026 Energy Head, we must consider that 2025 focused on stabilizing the economy, and in 2026 our main goal is to achieve a notable pace of growth. To do so, we must provide households and fuel consumers with efficient, fairly priced services and ensure adequate, reliable power to industry and services. The energy sector must supply the necessary infrastructure.

¶ 03 Electricity tariffs have been reduced by 11 per cent since we took office, though that is not enough; our policy target remains roughly a one-third reduction from prior levels. Our planning aligns to that goal. In generation, 70.2 per cent is from renewables and 29.8 per cent from non-renewables, where costs are higher. Large hydro contributes about 38 per cent at Rs. 2–3 per unit; small hydro about 10 per cent at Rs. 6–7 per unit. Hydro is most profitable, but we are near the limit of large hydro potential and seasonal constraints force other options. We must turn to reliable, stable renewables: wind and solar.

¶ 04 In 2025, the Ministry achieved 97.35 per cent of additions from solar: 112.85 MW ground-mounted and 584.528 MW from rooftops. On rooftop tariffs: earlier prices like Rs. 27 per unit fixed for 20 years are not sustainable if we aim to lower generation costs and consumer tariffs. With recent rates of Rs. 19–21, investors can recover within 5–6 years if done correctly by quality providers without commissions.

¶ 05 We have commenced feasibility and environmental studies for an additional 200 MW in 2025: Siyambalanduwa 100 MW, Mullikkulam two projects of 50 MW each; plus pre-feasibility for 180 MW ground solar in Anuradhapura (100 MW) and Anamaduwa (80 MW); and 150 MW of floating solar with EIA ongoing (Ridiyagama 50 MW, Deduru Oya 100 MW, etc.).

¶ 06 Wind resources are strong. An ADB-supported NREL study indicates up to 10 GW onshore and 4 GW on lagoons; World Bank studies indicate 27 GW in shallow offshore and 29 GW in deep waters. We will not capture all due to practical and cost limits, but given current national demand at about 2.9 GW, and existing wind only around 260 MW, there is a sizable opportunity.

¶ 07 Many earlier renewable projects lacked a clear national policy and system-integration plan; solar is a sensitive source and system issues were not managed. Hence, we are exploring hydrogen as a future vector. The world’s largest green hydrogen plant is in Fukushima; Kobe operates a 100 per cent hydrogen gas turbine. Solar and net metered power can produce hydrogen, which in turn generates electricity without CO2. For transport, South Korea runs hydrogen buses and taxis; Toyota produces the Mirai; Hyundai, Nikola, Volvo and Germany’s hydrogen trains point the way.

¶ 08 We held a hydrogen policy workshop in September 2025 and have prepared the groundwork to unveil the hydrogen policy by year-end, alongside tariff and battery policies, safety regulations, standards and a road map in 2026.

¶ 09 On fossil fuels, demand grows 4–5 per cent annually. Continuous energy supply is a national security element. Current storage covers roughly 25 days; we need at least 45. Plans to expand by 260,000 cubic metres are underway. At Kolonnawa, 64,000 m3 tanks are being built (Rs. 3.7 billion) to complete by 2027; at Muthurajawela, 40,000 m3 (Rs. 3.49 billion) by 2028.

¶ 10 From Colombo Port to Kolonnawa, five main pipelines—decades old—leak. Attempts since 2017 and 2019 to add two pipelines failed. Now Cabinet has approved construction of two pipelines (18-inch and 14-inch) from the Dolphin Oil Terminal to Kolonnawa and a 12-inch line to the Port’s Seram Gate. Unloading time per tanker can fall from about 96 hours to 48–72 hours, saving an estimated US$ 4.8 million per year.

¶ 11 Jet-A1 fuel is now hauled from Kolonnawa to Katunayake by rail and bowsers, which is inadequate for future needs. We will build an aviation fuel terminal at Muthurajawela and a pipeline to Katunayake.

¶ 12 On Sapugaskanda refinery: it supplies about 25 per cent of domestic needs. A plan to modernize and increase to 100,000 bpd has called for Expressions of Interest; 20 proposals were received and documents are being processed.

¶ 13 We recognize the energy sector’s role in the economy and are executing plans to fulfill promises and public expectations. Thank you.