From facing challenges to energy accessibility and sufficiency of energy resources to shifting to sustainable development pathways and moving to scaled up renewable energy in the country, Sri Lanka’s energy sector has garnered a lot of public attention, as well as of the key stakeholders. This has resulted in a further focus on best ways to address the country’s energy needs, as well as exploring possibilities for scaling up renewable energy in the country. To this end, different avenues are discussed including regional and cross border technology transfer and cross border energy trade. 

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Cross Border Energy Trade

Cross-border energy trade (CBET) can be described as the expansion of the power market, across country boarders by connecting the grid. In South Asia CBET is implemented in India, Bhutan, Nepal, and Bangladesh. Over the years there have been discussions to expand CBET to other countries of the region. The discussions on CBET points to its benefit in expansion of the energy capacity by connecting the grid to the level of a regional one, as well as the exploration of energy generation capacity for renewable energy in the country which could contribute to a regional market.  

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Additionally, the discussions on the topic direct also to the potential avenues for regional cooperation in technology transfer which could contribute to building the capacity and the electricity generation in the country. Among other benefits highlighted is include the CBET’s capacity to foster RE solutions, through innovation and regional knowledge sharing and lessons learnt. 

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Over the years, Sri Lanka has explored avenues for implementing CBET in the country. Among such examples are the proposed India Sri Lanka grid connection lines, and exploration of avenues for regional cooperation on renewable energy based CBET such as focuses on oceanic thermal energy conversion projects. 

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Capacity needs for CBET in Sri Lanka

Energy sector experts and related stakeholders highlight scaling up technical capacities, technology, as well as access to finance as key components of focus for CBET in Sri Lanka. Among points highlighted in stakeholder discussions on the renewable energy sector and CBET are the difficulties related to direct credit in financial systems for conducting projects at regional level; potential difficulties that needs to be addressed with regard to grid expansion; need for expanding the storage capacity of renewable energy in Sri Lanka; need for awareness and better understanding of CBET including technical capacity and skills; and potential legal and institutional frameworks that need to be set up or enhanced. 

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Additionally, assessing the energy needs at country level to be energy secure domestically ensuring the priority of  domestic energy security and sovereignty are also considered key elements, as well as assessment and understanding of Sri Lanka’s renewable energy generation capacity which could contribute to a regional energy market. This also includes the assessing of pros and cons of CBET, and the implications of its application to the domestic energy sector and safeguards to be implemented for energy security in the country. 

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Entry points for renewable energy cooperation

There are many national, regional and global processes that could provide avenues for scoping and identifying options for renewable energy cooperation and CBET in Sri Lanka. Among these are climate action focused on renewable energy under the Paris Agreement which consist of the Nationally Determined Contributions (NDCs) of Sri Lanka. This provides an opportunity to create a common ground for cooperation among countries in the region, which could potentially contribute to setting a renewable energy cooperation process which could help scale up climate action in the region, access climate finance and technology for regional interventions, and address existing gaps and needs in the energy sector at national and regional level. 

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Sri Lanka’s updated NDCs for electricity and power sector focus on  among others actions such as development of hydro-power base to its maximum potential through new large and small hydro-power plants amounting to around 300 MW; developing approximately 800MW of wind power generation in Northern and North-Western coastal areas of the island;  as well as developing approximately 2,000 MW of solar power capacity. Additionally, the NDCs also focus on pursuing pumped storage hydro power plant development and introducing policy supportive measures among others tax benefits, low-interest financing to expedite the implementation of renewable energy development and energy efficiency improvement programmes which were among the key recommendations of the stakeholders providing inputs on regional cooperation in the renewable energy sector. 

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Building on Sri Lanka’s NDCs could provide avenues for identifying common actions across the region, which could feed into a regional energy needs assessment and achieving the needs through capacity enhancement through regional cooperation. This could in turn develop action contributing to achieving the energy levels needed at regional and local levels, which could strengthen the energy security domestically and regionally through renewable energy cooperation. 

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In addition to the NDCs the 2030 Agenda for sustainable development, and sustainable development goals (SDGs) provide an entry point to scale up renewable energy related activities in Sri Lanka.  Working towards achieving energy related SDGs, could provide the opportunity for South Asia to develop collective measures to scale up renewable energy and its accessibility, which could in turn contribute to regional cooperation for scaling up renewable energy collectively. 

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Way forward

For effective measures to be implemented in the renewable energy sector it would be important to understand the financial regulations, tariff and tax systems which could incentivise stakeholders to engage in energy production. Existing efforts by different stakeholders which have explored opportunities for CBET potential with different countries could be building stones for assessing the potential of scaling up renewable energy at national and regional levels. To facilitate efforts, it would be pivotal that Sri Lanka has sufficient resources for implementing identified actions, as well as an enabling environment which would contribute to multiple stakeholders engaging in concrete actions related to the energy sector, and its scalability at a regional level. Such actions could be supported through energy potential assessments, research on different renewable energy sources, as well as collective efforts for accessing finance for supporting the scaling up of renewable energy measures in Sri Lanka. 

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It would also important to create awareness on the key aspects of renewable energy generation, and the benefits of shifting to a renewable energy-based energy system for energy security and accessibility at national as well as regional level. This includes also the understanding and the assessment of scaling up potential, avenues for enhancing the sectoral level actions with finance and technical support which could be further supported through education and vocational skill building for innovative approaches in sector supported by evidence and lessons for replication of national level experiences at regional and international level for advancing efforts related to renewable energy cooperation.  

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Note: This article has been published on The Morning as part of the author’s weekly column.

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