POLICY & REGULATION · 14 min read
Sri Lanka Has Two Reservoir Numbers. The One in the Headlines Is Not the One That Runs the Grid
On 24 August, the electricity regulator warned the public about power cuts. On the same day, the National System Operator’s own published figure put hydropower reservoirs at roughly 67 percent of capacity, with water sufficient into October. Meanwhile, almost every account of the drought put the figure at 36 percent. All of them are correct. They describe different reservoirs — and the one dominating the coverage is not the one that generates electricity.
By the ESGNexus Editorial Team · August 2026 · Estimated reading time: 14 minutes
KEY TAKEAWAYS
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On 9 August 2026, the Chairman of Sri Lanka’s National System Operator, Pradeep Perera, told reporters that hydro storage had risen to about 850 gigawatt-hours, roughly 66.5 percent of capacity, up from around 560 GWh before the rains. Fifteen days later, on 24 August, the National System Operator put the figure at approximately 67 percent and said the available reserves were sufficient to support hydropower generation until October.
On that same 24 August, the Public Utilities Commission of Sri Lanka warned the public that El Niño posed a significant threat to the country’s electricity generation capacity, and advised households and businesses to reduce non-essential consumption at peak hours. It also reset the renewable energy feed-in tariff and directed the National System Operator to add at least 450 MW of solar PV with battery storage by March 2027 — a package examined separately in our companion analysis of the Commission’s decision document.
Meanwhile, the number circulating in almost every account of Sri Lanka’s drought was 36 percent.
All of these statements are accurate. The problem is that two of them are about different bodies of water, and almost nobody has said so.
Two Series, Two Reservoir Systems, Two Directions
Sri Lanka’s reservoirs are not one pool. The Irrigation Department reports on the 74 major reservoirs that serve agriculture, and those figures underpin the water-conservation appeals. The reservoirs that drive hydropower generation are a different set, fed by different—largely wet-zone—catchments, and their storage is reported separately by the National System Operator and the Mahaweli Authority, in gigawatt-hours as well as percentages.
Put the two series side by side, and the divergence is not marginal.
| Date and source | Hydro-generation reservoirs | Irrigation reservoirs |
| 8 July 2026 — Irrigation Director General Eng. Dr. Kithsiri Waligepolage and Mahaweli Water Management Secretariat Director Eng. Nilantha Dhanapala | 60% (mini-hydro 68%; Mahaweli-managed 71%) | 50–62% |
| 9 August 2026 — National System Operator Chairman Pradeep Perera | 66.5% ≈ 850 GWh (from ≈ 560 GWh before the rains) | not stated |
| 16 August 2026 — Eng. H.M.P.S.D. Herath, Director of Irrigation (Water Management) | not stated | 37.2% of effective capacity, 1.106 million acre-feet |
| 24 August 2026 — National System Operator | ≈ 67%, sufficient to support generation until October | ≈ 35% |
| 25 August 2026 — L. S. Sooriyabandara, Director, Hydrology and Disaster Management Division, Irrigation Department | not stated | 36%; five districts below 30% |
Sources: Xinhua, 9 and 25 August 2026; Asian Mirror, 24 August 2026; Daily Mirror, 18 August 2026; Lanka News Web, 8 July 2026. The 24 August Asian Mirror report is the most useful document here because it includes both populations in one article, attributed to the National System Operator and the Irrigation Department, respectively.
Between 9 and 24 August, the generation series moved from 66.5 to about 67 percent — flat. Over an overlapping period, the irrigation series moved from 37.2 to 36 percent — down. They are not tracking each other, and over the last fortnight they have not even been moving in the same direction.
The 8 July reporting matters because it establishes that this is not an interpretation imposed after the fact. Two months ago the departments were already publishing hydro, mini-hydro, irrigation and Mahaweli-managed storage as four distinct figures on the same day. The split is how the system reports itself. The innovation is aggregating them into a single headline percentage.
The Arithmetic Closes, Which Is What Makes It Checkable
Two figures from the National System Operator can be tested against each other. If 850 GWh represents 66.5 percent of storage, full storage is about 1,278 GWh. On that basis, the pre-rain level of 560 GWh corresponds to 43.8 percent, and the 24 August reading of roughly 67 percent corresponds to about 856 GWh.
That derived denominator can be checked against a primary source, and it holds. The Ceylon Electricity Board’s Statistical Digest 2025 reports a hydro reservoir capacity of 1,279 GWh, unchanged from 2024, in its summary of statistics. The same table shows actual year-end hydro reservoir storage of 1,060 GWh in 2024 and 1,128 GWh in 2025. The August readings describe one reservoir set on one scale, and that scale is the utility’s own.
That check also explains the direction of travel. The July and August rain fell on the wet-zone catchments that feed the generation reservoirs. It did not refill the dry-zone tanks. A single national reservoir percentage would have averaged those two facts into something that describes neither.
This is not a claim that the drought is overstated. It is claimed that the country has two water problems of different severity in different places, and that the published evidence distinguishes between them.
The Irrigation Number Is the Worse One. It Is Just Not an Electricity Number
Nothing here should be read as reassurance. The irrigation series is in the more serious of the two conditions and is already causing measurable harm. As at 25 August, the Irrigation Department reported reservoirs in five districts were below 30 percent capacity, and the Disaster Management Center counted 81,865 people in 25,628 families across seven districts affected by dry conditions, with 72,153 receiving water supplies.
For Sri Lankan companies, that exposure runs through a different set of channels from the electricity one.
| Reservoir series | What it governs | Corporate exposure channel |
| Irrigation Department — 74 major tanks, 36% (25 Aug) | Dry-zone agriculture, the Maha planting season, rural and municipal water supply | Plantation and agricultural yields, food and input prices, rural consumer demand, water-intensive manufacturing sites, community and social license |
| National System Operator — hydropower reservoirs, ~67% (24 Aug) | Hydro dispatch, the thermal generation share, and therefore the cost of supply | Electricity tariffs, generation-mix emissions factors in Scope 2 reporting, reliability of supply in the evening peak |
The distinction has direct reporting consequences. A company disclosing climate-related transition and physical risk under SLFRS S2 that cites a national reservoir percentage as evidence of energy-supply risk is citing an agricultural indicator. If the same company has genuine agricultural exposure — a plantation, a food processor, an agri-lender — then that figure is highly relevant, but to a different risk, in a different part of the disclosure.
What Corporate Risk Managers Are Asking
Three questions come back from risk and sustainability functions whenever this material is put in front of them. Each is answered below from the Ceylon Electricity Board’s statistical publications, the Public Utilities Commission’s tariff decisions, the Mahaweli Authority’s daily reservoir report, and the text of the standards Sri Lankan filers are now inside. Where those sources do not answer, the answer says so rather than filling the space.
1. What hydro dispatch assumptions underlie the ‘sufficient until October’ statement, and what happens if El Niño worsens?
They are not published. No document from the National System Operator, the Ceylon Electricity Board or the Public Utilities Commission that this newsroom could locate states the dispatch level, the inflow assumption, the reserve margin or the minimum-storage rule behind that phrase. The 24 August statement contains none of them — no gigawatt-hours, no thermal plan, no El Niño reference at all.
The problem with the phrase is sharper than its missing arithmetic. The assurance has already moved once, and nothing published explains why. On 9 August, describing the same 850 GWh position, Chairman Perera said it enabled more reliable system management “until the first week of September”. On 24 August, the National System Operator said the reserves were sufficient “until October” — a month further out, on storage that had risen by roughly half a percentage point. Both statements are on the record. Neither is reconciled anywhere.
What is public is the nearest thing to the underlying arithmetic, and almost nobody has looked at it. The National System Operator’s approved month-by-month hydro dispatch forecast for 2026 is included in the Commission’s May 2026 electricity tariff decision.
| Month, 2026 | Approved major hydro generation (GWh) | Total system generation (GWh) |
| April | 281.50 | 1,505 |
| May | 337.15 | 1,613 |
| June | 354.35 | 1,576 |
| July | 450.93 | 1,645 |
| August | 294.76 | 1,650 |
| September | 467.34 | 1,571 |
Source: Public Utilities Commission of Sri Lanka, ‘Decision on Electricity Tariffs’, effective 11 May 2026, Table 6 ‘Approved Generation — Energy Cost for 2nd and 3rd quarters of 2026’, row ‘Mahaweli/Laxapana/Samanala — Hydro’ — pucsl.gov.lk, read 28 August 2026. Figures are the approved forecast, not actuals. No approved forecast for October to December 2026 has been published.
We are not going to divide 850 by those monthly figures and print a runway, and neither should anyone else. Storage is not a tank being drained: inflow is a material term, and it is large. The same decision records that in April 2026 the forecast assumed 228 GWh of inflow against 281 GWh of generation, and that actual generation came in at 331 GWh against 225 GWh of actual inflow. The Commission’s own conclusion for that month was that “the actual Major hydro generation in April 2026 has exceeded the forecast, while the actual inflow remains at the forecasted level. This results in lower hydro storage.” No published inflow forecast exists for August to December 2026. Without it, the calculation cannot be closed, and any figure that closes it has assumed something its author has not told you.
The Commission is more candid about the year than the 24 August statement is. Of the same forecasts it writes that “the Major Hydro forecasts for both quarters are below average, considering the actual data for the recent years”, and that the Meteorological Department “states emergence of El-Nino condition is likely during the next 3 months, which may distort the rainfall patterns.”
On what happens if El Niño worsens, Sri Lanka has run this experiment twice, and the published record is unambiguous. In 2023, an El Niño year, figures in the same PUCSL table show hydro at 812 GWh in the second quarter and 823 GWh in the third — roughly half of 1,704 GWh and 1,631 GWh for the same quarters of 2025. In 2016, hydro generation fell to 3,496 GWh, 25 percent of total generation, down from 4,925 GWh, 38 percent, in 2015, and the major hydro plant factor fell from 40.8 percent to 21.6 percent. The Commission’s own performance report for that year records that, in April 2016, the transmission licensee entered into a one-year power purchase agreement with an emergency supplier, and that the system suffered two blackouts in February and March.
2. How should companies adjust Scope 2 emissions reporting if the grid shifts from hydro to thermal generation?
Start with the requirement, because it is narrower and harder than most Sri Lankan filers assume. Under IFRS S2 — adopted here as SLFRS S2 — paragraph 29(a)(ii) requires greenhouse gas emissions to be measured in accordance with the GHG Protocol Corporate Standard (2004), and paragraph 29(a)(v) requires disclosure of location-based Scope 2 emissions specifically. Market-based Scope 2 may be disclosed as additional information under paragraph B31; it is not a substitute. A Sri Lankan company cannot bypass the grid’s generation mix by pointing to a contract.
This makes the grid emission factor a required input, not an elective one—and Sri Lanka’s has changed a great deal.
| Year | Published average emission factor (kg CO2/kWh) | Major hydro generation (GWh) |
| 2016 | 0.5684 | 3,481.9 |
| 2017 | 0.5845 | 3,075.2 |
| 2018 | Not published in any edition located | — |
| 2019 | 0.5401 | 3,800.9 |
| 2020 | 0.5294 | 3,929.4 |
| 2021 | 0.4278 | 5,658.5 |
| 2022 | 0.4173 | 5,382.7 |
Source: Sri Lanka Sustainable Energy Authority, ‘Sri Lanka Energy Balance’, 2017, 2020 and 2022 editions — energy.gov.lk. Emission factor and hydro generation are taken from the same edition in each case, so the two columns are internally consistent; they are not directly comparable to the Ceylon Electricity Board’s generation series, which uses different boundaries. Confounder stated: the fall across 2021 and 2022 coincides with Sri Lanka’s economic and fuel-import crisis, which independently suppressed thermal oil generation and total demand. The 2016–17 movement is the cleaner rainfall-driven illustration, and the Authority itself attributes the 2017 shift in the renewables share to ‘the decrease in hydro power generation warranted by low rainfall’. Method note: we did not confirm the Authority’s stated boundary for its ‘Average Emission Factor’ — whether it is generation- or consumption-based, and whether transmission and distribution losses are included — and that should be checked before the figure is used in a calculation.
The spread across the published series is roughly 40 percent, from 0.4173 to 0.5845 kg CO2 per kWh, and it moves inversely with hydro output. A company that fixes a factor at the start of its reporting year and holds it through a drought is not being conservative in either direction; it is reporting a number whose error term it has not measured.
Now the practical problem, which is worse than the methodological one. The most recent official Sri Lankan average emission factor this newsroom could locate is for 2022. The Sustainable Energy Authority’s Energy Balance series appears to stop at the 2022 edition; no 2023, 2024 or 2025 edition could be found, and the Climate Change Secretariat’s own National Grid Emission Factor page is caught in a redirect loop and could not be read. A company preparing an FY2026 Scope 2 figure is, on the published record, using a four-year-old factor drawn from a year when hydro output was 5,382.7 GWh — near the top of the range.
There is a second trap, and it is expensive. The Authority publishes two different families of numbers. The Average Emission Factor — 0.4173 kg CO2/kWh for 2022 — is the grid average. Alongside it are CDM-style operating, build, and combined margins: for 2022, an operating margin of 0.7123, a build margin of 0.5841, and a combined margin of 0.6482. Those are project-baseline constructs designed for crediting avoided emissions, not corporate grid averages. Using the combined margin in place of the average factor overstates Scope 2 by more than half. Both numbers sit in the same document, a few lines apart.
What the standard asks of a company in this position is specific and answerable. Paragraph 29(a)(iii) requires disclosure of “the measurement approach, inputs and assumptions”, “the reason why the entity has chosen” them, and — the sub-paragraph that governs a mid-year shift — “any changes the entity made to the measurement approach, inputs and assumptions during the reporting period and the reasons for those changes”. Paragraph B29 requires an entity to disclose information enabling users “to understand which emission factors the entity uses”. And IFRS S1 paragraph 78 requires an entity to identify amounts subject to a high level of measurement uncertainty and to disclose “the sources of measurement uncertainty” together with “the assumptions, approximations and judgments the entity has made in measuring the amount”.
Read together, those paragraphs do not require a company to have the right factor. They require it to say which factor it used, of what vintage, from which publisher, and what that choice does to the number. That is achievable this reporting year. Pretending the factor is stable is not.
Two dates make this urgent rather than theoretical. Sri Lanka’s phase-in includes the top 100 Colombo Stock Exchange companies by market capitalization under SLFRS S1 and S2 from 1 January 2025, Main Board entities from 1 January 2026, and all other listed entities from 1 January 2027 — and the country’s transition reliefs cover Scope 3, anticipated financial effects, and scenario analysis. There is no relief from Scope 2. Separately, the international assurance standard for sustainability reporting, ISSA 5000, applies to sustainability information reported for periods beginning on or after 15 December 2026, and it requires a practitioner to “evaluate the relevance and reliability of information intended to be used as evidence, including information obtained from sources external to the entity.” A four-year-old emission factor is external information, and somebody is going to ask about it.
3. What is the best practice for referencing reservoir data in board papers or climate disclosures to avoid misinterpretation?
The premise is right, and the fix is more concrete than the question assumes, because a primary source exists that resolves the confusion, is published daily, and appears in none of the coverage.
First, the scale of the problem. In the last week of August 2026 there were not two reservoir percentages in circulation for Sri Lanka but at least four: 36 per cent (74 major reservoirs, Irrigation Department, 25 August), approximately 67 per cent (hydropower reservoirs, National System Operator, 24 August), 56 per cent (attributed by AFP on 20 August to unnamed “officials”), and 55 per cent — the gross total in the Mahaweli Water Management Secretariat’s own report of 25 August. All four describe Sri Lankan reservoirs. None describes the same set.
| Series | What it covers | Where it is published |
| Irrigation Department — ’74 major reservoirs’ | Dry-zone agricultural tanks. No published constituent list and no published definition of ‘effective storage capacity’ | Press briefings. The Department’s reservoir status pages returned HTTP 409 on every attempt on 28 August 2026; no citable URL was reached |
| National System Operator — hydropower reservoirs | The generation set. Denominator of 1,279 GWh is published by the Ceylon Electricity Board | Press statements. No NSO or CEB publication of daily hydro reservoir storage at a citable URL was located |
| Mahaweli Water Management Secretariat — ‘Latest Status of Reservoirs’ | Reservoir by reservoir, grouped by function: Power Stations, Mini Hydro, Mahaweli System, Irrigation System | A daily PDF at mahaweli.gov.lk. Published at a single rolling URL and overwritten in place — there is no dated archive |
The Mahaweli report is the document a board paper should cite, and it does something no aggregate can: it shows the dispersion within the headline. On 25 August 2026, its Power Stations group read Moussakele at 93 percent, Castlereigh at 92, Polgolla at 92, Upper Kotmale at 77, Kotmale at 76, Victoria at 71, Rantambe at 63, Randenigala at 56, Samanalawewa at 48, Dayaraba at 41, and Bowatenna at 21. A single figure of 67 percent conceals a range from21 to 933
Source: Mahaweli Authority of Sri Lanka, Water Management Secretariat, ‘Latest Status of Reservoirs’, report dated 2026/08/25, read 28 August 2026 — mahaweli.gov.lk. Only percentages are reproduced here. The report’s gross-capacity column did not convert identically between two independent machine reads of the same file on the same day, while every percentage did; therefore, the volumes are not printed. Note also that the Ceylon Electricity Board and the Water Management Secretariat transliterate the same reservoirs differently — ‘Castlereagh’ and ‘Maussakelle’ against ‘Castlereigh’ and ‘Moussakele’ — which is a real hazard for anyone joining the two datasets.
Second, the trap in using it. The report is published at a single rolling URL and overwritten in place; a link in a board paper will show the numbers from a different day by the time anyone checks it. The document must be attached with the date printed on the copy retrieved, not hyperlinked. That is an unglamorous instruction, and it is the difference between a citation and a broken one.
Third, what the standards require, because this is not a matter of taste. IFRS S1 paragraph 50(d) requires disclosure of “the method used to calculate the metric and the inputs to the calculation, including the limitations of the method used and the significant assumptions made.” Paragraph 78 requires the sources of measurement uncertainty and the assumptions made. And the qualitative characteristic that decides the question is verifiability, which Appendix D defines as follows: “Information is verifiable if it is possible to corroborate either the information itself or the inputs used to derive it.” A percentage with no named population, no stated denominator, and no retrievable source is not verifiable in that sense. Where the figure feeds scenario analysis, IFRS S2 paragraph 22(b)(i)(1) requires disclosure of the scenarios used, “and the sources of those scenarios, and paragraph 22(b)(ii)(3) requires the assumptions made about regional variables, including “availability of natural resources”.
So the discipline reduces to five items, and they fit on one line of a risk register: which reservoirs, what measure, on what date, published by whom, and retrievable where. Applied to the number in general circulation, that line reads: the Irrigation Department’s 74 major reservoirs, 36 percent of capacity, 25 August 2026, per the Director of its Hydrology and Disaster Management Division, reported by Xinhua; no primary publication located. Written out, it is immediately obvious that the figure cannot support a conclusion about electricity supply.
Two further cautions. A percentage without a volume is not comparable across dates if the denominator can change: the 16 August irrigation figure was 1.106 million acre-feet, while the 25 August figure was none. And the same series was reported within nine days as 37.2 percent “of effective storage capacity”, 35.9 percent “of effective storage capacity” and 36 percent “of total capacity” — with effective and total used as though they were interchangeable. No primary document reconciling them could be found.
What Is Not Known
Two gaps are load-bearing, and neither can be closed from outside the system. No published inflow forecast exists for August to December 2026, without which the system operator alone can test the sufficient-until-October assurance. And the Irrigation Department’s 74-reservoir series has no published definition — no constituent list, no statement of what “effective storage capacity” means, and no accessible publication URL. The most quoted environmental number in Sri Lanka this month reaches the public through press briefings alone.
What to Do Now
1. Write the five-item citation line into your risk register template this quarter. Which reservoirs, what measure, on what date, published by whom, retrievable where. Applied to the figure most boards are currently using, the line writes itself into an argument for not using it.
2. Replace the headline percentage with the Mahaweli daily report, and attach it rather than link it. It is the only published source that separates generation reservoirs from irrigation tanks, on a reservoir-by-reservoir basis. It is also overwritten in place each day so that a hyperlink can point to a different number.
3. Find out which emission factor your Scope 2 figure uses, and how old it is. The most recent official Sri Lankan average grid factor we could locate is for 2022. Paragraph 29(a)(iii) requires you to disclose the input, the reason for it, and any change during the period. That is answerable now; a stable-factor assumption is not.
4. Separate the agricultural exposure from the electricity exposure in the register itself. They have different severities, time horizons, and mitigations. A food processor and a data center are both affected by this drought, but not in the same way or on the same schedule.
5. Diary October, and ask the system operator the question then. The assurance is explicitly dated, and it has already moved once—from the first week of September to 9 August, then to October on 24 August—with no published explanation. Whether it is extended, revised or withdrawn is the most informative signal available on generation adequacy through the first quarter of 2027.
The Number You Use Determines the Risk You See
There is no scandal here, and no one has been misled deliberately. Government bodies published accurate figures on various topics, and the compression that occurs when technical reporting becomes general coverage did the rest. The Irrigation Department’s number is easier to obtain, easier to explain, and attached to visible hardship, so it became the number.
But a board that prices generation risk off an agricultural indicator has not been conservative. It has been imprecise in an unpredictable direction — and it may equally be understating the agricultural exposure, which on the published evidence is the more acute of the two. The discipline is not to pick the alarming number or the reassuring one. It is to say which reservoirs, on which date, reported by whom.
Every document this article rests on was public before it was written. The utility’s statistical digest, the Water Management Secretariat’s daily report, the regulator’s tariff decisions, and the Energy Authority’s emission factors all sat at stable addresses. At the same time, the coverage ran on a single percentage from a press briefing. The gap here was never one of publication. It was one of retrieval.
Sources & Further Reading
Ceylon Electricity Board, “Statistical Digest 2025” and “Statistical Digest 2024” — ceb.lk
Mahaweli Authority of Sri Lanka, Water Management Secretariat, “Latest Status of Reservoirs”, report dated 25 August 2026 — mahaweli.gov.lk
Public Utilities Commission of Sri Lanka, “Decision on Electricity Tariffs”, effective 11 May 2026, Tables 3, 4 and 6 — pucsl.gov.lk
Public Utilities Commission of Sri Lanka, “Generation Performance in Sri Lanka 2016” — pucsl.gov.lk
Sri Lanka Sustainable Energy Authority, “Sri Lanka Energy Balance”, 2017, 2020 and 2022 editions — energy.gov.lk
IFRS Foundation / ISSB, “IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information”, June 2023 — ifrs.org
IFRS Foundation / ISSB, “IFRS S2 Climate-related Disclosures”, June 2023 — ifrs.org
IFRS Foundation, “IFRS Sustainability Disclosure Standards — Jurisdiction Profile: Sri Lanka”, updated 12 June 2025 — ifrs.org
IAASB, “International Standard on Sustainability Assurance 5000, General Requirements for Sustainability Assurance Engagements”, November 2024 — iaasb.org
GHG Protocol, “Scope 2 Guidance: An amendment to the GHG Protocol Corporate Standard”, 2015 — ghgprotocol.org
Xinhua, “Sri Lanka hydro storage rises to 66.5 pct after rainfall”, 9 August 2026 — english. news.cn
Xinhua, “Sri Lanka’s major reservoir storage falls amid dry conditions”, 25 August 2026 — english. news.cn
Asian Mirror, “Hydropower reservoirs at 67% capacity, sufficient until October”, 24 August 2026 — asianmirror.lk
Lanka News Web, “Reservoir Strength Offers Sri Lanka Shield against Emerging El Niño Impact”, 8 July 2026 — lankanewsweb.net
Daily Mirror, “Major reservoirs hold 37.2% of effective storage capacity”, 18 August 2026, and “Major reservoirs hold 35.9% of effective storage capacity”, 21 August 2026 — dailymirror.lk
Newswire, “PUCSL warns of possible power shortages amid El Niño”, 24 August 2026, and “Sri Lanka’s 74 major reservoirs drop to 36% capacity”, 24 August 2026 — newswire.lk
AFP, “Worst ever ElNiñoo to bring heavy rains, drought to Sri Lanka”, 20 August 2026
Related ESGNexus analysis: the Public Utilities Commission’s feed-in tariff decision of 21 August 2026 — what it actually contains, what it locks and what it leaves open — is examined in a companion piece published alongside this one. Our coverage of the Q3 2026 electricity tariff decision, published 16 August 2026, examined the consumer side of the same question, and this article revises its framing: the reservoir series used there is the irrigation series, and it should be read as an agricultural indicator.
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Data disclaimer: Information in this article is sourced from publicly available documents. ESGNexus does not independently verify company disclosures. Errors and omissions excepted.