Sri Lanka’s push to modernize its national power grid has hit a roadblock as energy sector developers raise strong objections to newly proposed feed-in tariffs for project developers integrating Battery Energy Storage Systems (BESS). The government’s initiative aims to balance the grid by pairing battery storage with renewable energy sources, but industry stakeholders warn the proposed pricing model is commercially unviable.
Key Highlights
- Sri Lanka introduced a feed-in tariff framework aimed at encouraging renewable energy generation combined with battery storage.
- Clean energy developers and investors have voiced pushback, calling the proposed remuneration rates insufficient to cover high BESS capital costs.
- Industry leaders warn that uncompetitive tariffs could discourage private sector investment and delay the nation’s clean energy transition.
Integrating Battery Energy Storage Systems is considered vital for Sri Lanka to manage the intermittency of its growing solar and wind power generation. Battery storage allows excess renewable power to be stored during off-peak hours and dispatched during peak demand, significantly enhancing grid stability and reducing reliance on fossil fuels.
However, utility-scale battery hardware requires heavy upfront capital investment, which developers argue is not adequately offset by the proposed feed-in tariffs. Faced with currency volatility and elevated import costs, market players are calling on regulatory authorities to re-evaluate the pricing structure and engage in further consultations to ensure energy projects remain bankable.