The Hon. Arkam Ilyas - Deputy Minister of Power

¶ 01 Thank you, Hon. Presiding Member. Representing the Ministry at the Committee Stage, I note that our policy places strong emphasis on creating a competitive, consumer-centric, environmentally friendly power sector. Historically we depended heavily on fossil fuels; now Sri Lanka is recognized for significant renewable potential. Although we still rely on oil-based thermal generation, our technical potential far exceeds current demand several-fold.

¶ 02 Key gaps left by past governments included failing to build the necessary transmission systems to absorb solar and wind. Some Opposition speakers suggested raising solar tariffs while also lowering retail tariffs — a contradiction. To deliver affordable retail tariffs, we must procure generation at the right prices and enable storage for excess renewable energy. We are moving on both: competitive tenders and energy storage.

¶ 03 On the 500 MW wind case cited: we did not “cancel” arbitrarily; we engaged in negotiations. The proponent withdrew when we insisted on lower prices. Large projects do not justify higher tariffs; with scale, tariffs should fall, per sound engineering economics. We are calling competitive tenders and expect even lower prices.

¶ 04 We are also updating the grid. Through funds and loans, we have already commenced transmission upgrades; tenders are underway or planned for lines in the Eastern Province and elsewhere: Kilinochchi–Habarana 400 kV, Kirindiwela–Habarana 400 kV, Sooriyawewa–Monaragala, and Norochcholai–Wariyapola 220 kV, among others.

¶ 05 Demand peaks at night while solar peaks by day. We lacked storage. Under our government, we have opened tenders for battery storage: a 160 MW system at around Rs. 17 per unit equivalent cost is at award stage, with more storage tenders closing and likely at even lower prices.

¶ 06 On transport: with import relaxations, EVs are arriving, but many charge at night, effectively using diesel-fired power. In 2026 we will expand EV charging points to incentivize day-time charging and align with renewable output.

¶ 07 We will pilot smart metering by 2026 for solar producers and high-usage consumers (offices, industries, apartments), starting with 2,000 units, enabling time-based tariffs. Curtailments today are worsened by the absence of time-of-use tariffs and smart control systems. We will implement smart metering and smart grid functions so customers can benefit from lower day rates while the system reduces curtailment.

¶ 08 Rooftop solar is about 1,500 MW; integrating this with proper controls into the system is a priority. With time-based tariffs, seven million consumers can gain relief and shift demand.

¶ 09 Our policy target is to reduce electricity bills by 30% over three years via cost-reflective, efficiency-driven methods — not by masking losses. Between 2014 and 2022, political decisions froze prices, creating a Rs. 500 billion loss at CEB. We seek sustainable affordability.

¶ 10 On hydrocarbons, we plan tenders in early 2026 for Mannar basin exploration with international partners bearing costs. A viable gas discovery would be transformative.

¶ 11 Our objective over the next 2–3 years is a genuine sectoral shift: affordable tariffs for households and industry, and a broader energy revolution within five years. Thank you.