POLICY & REGULATION · 9 min read
Sri Lanka’s Grid Plan Reaches 68% Renewable by 2029 — and May Still Miss the Regulator’s Own 2030 Oil Deadline
On 16 September the Public Utilities Commission published its correspondence with the National System Operator on an interim power plan for 2027 to 2029. The plan raises renewable energy to roughly two-thirds of Sri Lanka’s annual generation, assumes natural gas will not arrive, and expects solar to overtake coal in 2028. The regulator has not approved it. Its fourteen recommendations include a warning that the plan may not eliminate oil-fired generation by 2030, a condition the Commission itself set in May. The plan was never put out for public comment.
By the ESGNexus Editorial Team · September 2026 · Estimated reading time: 9 minutes
KEY TAKEAWAYS
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If your company reports under SLFRS S2, somewhere in your disclosure is an assumption about what Sri Lanka’s electricity will be made of. It sits under your Scope 2 emissions, under any renewable-energy target expressed as a share of consumption, and under every sentence of your transition plan that says the grid will decarbonise around you. Most Sri Lankan filers take that assumption, directly or indirectly, from the Ceylon Electricity Board’s Long Term Generation Expansion Plan 2025–2044.
That assumption has moved. The document that moved it and the regulator’s response to it have been public since 16 September, with not a single line of coverage.
What the Regulator Published, and When
On 16 September 2026, the Public Utilities Commission of Sri Lanka added a page to its electricity section titled Communications Related to Interim Report (2027-2029) of LTPSDP 2027 – 2046. The LTPSDP — the Long Term Power System Development Plan — is the successor instrument to the Long Term Generation Expansion Plan. It determines what Sri Lanka’s electricity is generated from, and for how long, over a twenty-year horizon.
The page is not a consultation. It is a four-letter file, and the sequence itself is informative.
| Date | Document |
| 9 July 2026 | Letter from the National System Operator submitting the Interim Report of the LTPSDP. |
| 13 July 2026 | Letter from PUCSL to the National System Operator requesting an updated Interim Report. |
| 10 August 2026 | Letter from the National System Operator submitting the updated Interim Report. |
| 9 September 2026 | Letter from PUCSL to the National System Operator outlining fourteen recommendations in the Interim Report. |
Source: PUCSL, “Communications Related to Interim Report (2027-2029) of LTPSDP 2027 – 2046”, 16 September 2026 — pucsl.gov.lk
The operator submitted a plan. The regulator sent it back within four days. A revised version arrived four weeks later, and on 9 September the Commission returned it again, this time with fourteen formal recommendations. That is a substantive regulatory process on the single largest determinant of the country’s energy emissions, and the public saw none of it until the file was posted.
What the Plan Actually Says
The updated report submitted on 10 August sets out a three-year trajectory. Its headline numbers are these.
| Year | Net generation required | Installed capacity | Renewable share of annual generation |
| 2027 | 20,549 GWh | 8,693 MW | 63% |
| 2028 | 21,587 GWh | 9,885 MW | 66% |
| 2029 | 22,616 GWh | 10,925 MW | 68% |
Source: National System Operator, updated Interim Report (2027–2029) of the LTPSDP 2027–2046, submitted 10 August 2026 — pucsl.gov.lk. The 9 July submission carries the same figures.
Demand growth implied by those generation figures is 5.05% between 2027 and 2028 and 4.77% between 2028 and 2029. Installed capacity rises by just over 2,200 MW across the three years.
The composition is where the interest lies. By the end of 2029, the plan provides for 4,554 MW of installed solar, compared with 2,982 MW in the 2025–2044 expansion plan, an additional 1,572 MW. Battery energy storage reaches 1,245 MW against 305 MW. On the candidate side, the operator recommends 500 MW of rooftop solar across the three years, 400 MW of grid-connected solar in 2028 and 2029, and battery storage additions of 80 MW / 320 MWh by March 2027, 100 MW / 400 MWh by December 2028 and 300 MW / 1,200 MWh by December 2029.
Two structural statements matter more than any single megawatt figure.
| Natural gas is assumed to be unavailable for the period 2027- 2029 — Interim Report (2027–2029) of the LTPSDP 2027–2046, National System Operator |
LNG has been part of the rhetoric of Sri Lankan energy policy for the better part of a decade, and the 2025–2044 expansion plan counted on natural gas from mid-2027. The system operator’s own near-term plan now assumes it will not arrive, citing delays in procuring the infrastructure needed to bring it in.
The second is coal. The report states that in 2027, coal remains the second-largest contributor to the energy mix after hydro, and that from 2028 onwards, solar surpasses it to become the second-largest source, at around 28% of total generation. The plan does not retire coal; it builds past it. Oil is treated more gently still: GT 7 was retired by the end of 2025, but Sapugaskanda Station A (68 MW), Sapugaskanda Station B (72 MW) and the Barge Mounted Plant (62 MW) have had their operating lives extended to the end of 2030.
The report explains why an interim plan exists at all: conditions in the prevailing expansion plan have, in its words, deviated due to higher electricity demand growth, alongside delays in committed generation projects and faster growth in rooftop solar. The full twenty-year study has a lengthy preparation and approval process, and procurement decisions cannot wait for it.
What the Regulator Told the Operator to Fix
The Commission’s letter of 9 September, signed by its Director General, does not approve the interim report. It sets out fourteen observations, each paired with a recommendation, and most of those recommendations call for the report to be revised or to include something it currently does not. Five matter directly to a company writing a climate disclosure.
| PUCSL point | What the Commission found | What it directed |
| 10 — Oil exit | Its tariff decision of 9 May 2026 required the elimination of oil-based generation by 2030. The plan’s projected 2029 mix indicates this requirement may not be achieved. | The final plan shall eliminate dependence on oil by 2030, and the interim report shall be revised to show a clear pathway to it. |
| 4 — Curtailment | Curtailment of renewable energy is discussed only qualitatively. No annual quantities or percentages are given. | Quantified annual curtailment estimates, with their assumptions, shall be included. |
| 12 — Transmission | The report’s own conclusion is that transmission constraints, not resource availability, bind renewable additions for 2027 to 2029. | Evaluate solar-plus-storage configured for firm output, which could connect more solar for a given transmission capacity. |
| 2 — Storage | The plan provides 50 MW / 200 MWh of storage for existing solar plants, but 150 MW / 600 MWh has already been tendered. | Revise the report to reflect the tendered 150 MW / 600 MWh. |
| 9 — Cost | The report presents a single investment chart with no supporting data table. | Include the data and establish that the plan follows the principle of least economic cost. |
Source: PUCSL, letter to the National System Operator, “Recommendations for the Interim Report (2027-2029) of Long Term Power System Development Plan 2027-2046”, ref. PUC/LIC/2026/NSO/46, 9 September 2026 — pucsl.gov.lk
The oil point is the one to read twice. The regulator set a condition in May; four months later, it is telling the operator that the operator’s own plan may not meet it. The life extensions to the end of 2030 for three oil-fired plants sit awkwardly beside that deadline. The other recommendations cover the contingency analysis, which was run on the loss of a 270 MW unit at Lakvijaya when the largest unit in service is the 312 MW unit at Sobadhanavi; alignment with the National Electricity Policy; cybersecurity for new digital infrastructure; and the Directions issued after the total system failure of 9 February 2025. The Commission has asked for the final twenty-year plan before 9 March 2027.
What This Changes for a Sri Lankan Company
Four things, concretely.
1. Your grid emission factor has a new trajectory. A grid moving to 63%, then 66%, then 68% renewable generation is a grid whose emission factor falls faster than a plan built on the 2025–2044 assumptions implies. If your Scope 2 target is expressed in absolute tonnes, part of your reduction is now expected to arrive without you doing anything, and an assurance provider or a lender is entitled to ask you to separate the two. If it is expressed as a percentage below a baseline, the baseline itself is moving.
2. The 68% is a planning figure, not a delivered one. The regulator has pointed out that the plan does not quantify curtailment, and that transmission is the binding constraint. Renewable energy that cannot reach the grid does not lower anyone’s emission factor. Any disclosure that leans on the 68% should say it is the operator’s planned share, not yet approved, and not net of curtailment.
3. A renewable-procurement business case has a shorter window. The economics of a corporate power purchase agreement or on-site generation depend on what the alternative grid supply looks like. A grid that is two-thirds renewable by 2029 narrows the emissions advantage of buying your own, even where the cost advantage survives. That is a board-level input, not a sustainability-team one.
4. Your transition plan may be citing a superseded document. SLFRS S1 requires you to disclose the assumptions your climate-related strategy depends on. If the named source is the LTGEP 2025–2044 and the operator has published a document saying that plan’s conditions have deviated, the honest disclosure now names both, and notes that the interim plan is under revision.
One more point for anyone modelling electricity cost rather than carbon. The report carries explicit economic fuel-price assumptions, excluding tax: coal at USD 124.7 per metric tonne, diesel at USD 120.5 per barrel, furnace oil at USD 119.6 per barrel and naphtha at USD 87.7 per barrel. It uses a discount rate of 8% and a reserve margin criterion ranging from 2.5% to 20%. Those are checkable, and the regulator has itself asked for the investment data behind them.
The Consultation That Did Not Happen
None of the four documents indicates a public comment period, and the PUCSL page carries no consultation notice, no deadline and no invitation to respond. The Commission’s letter records one external input: a submission from the National Transmission Network Service Provider, the state transmission company, requesting that its asset requirements be included. The plan’s predecessor was treated differently: in past cycles, PUCSL issued public calls for comment on the Ceylon Electricity Board’s long-term generation expansion plan, inviting submissions from consumers and industry before approving it.
We are not asserting that any rule was broken. An interim report produced under time pressure may sit in a different procedural category from a full plan, and the full LTPSDP may yet be opened for comment. What we can say is narrower: the document that sets Sri Lanka’s generation mix for the first three years of the new planning period has been drafted and reviewed among three state institutions, and has attracted no public comment because nobody was asked for any.
We asked PUCSL on 28 September whether the interim report or the full LTPSDP 2027–2046 will be opened for public comment. It had not responded by publication.
For a market whose listed companies are now legally required to disclose climate-related transition risk, the assumptions underlying the national generation plan are not a technical annexe. They are an input.
What We Have Not Established
- The Commission’s letter of 13 July, which requested the first revision, is a scanned image that we have been unable to read. We cannot say what it found wanting in July.
- The updated report does not set out what changed from the July version, and we found no difference in its headline figures.
- We have left out plant-by-plant megawatt figures for committed projects. Our readings of those tables did not agree to the megawatt, so we print the plan’s totals instead.
What to Do Now
- Find the sentence in your own sustainability report that states an assumption about Sri Lanka’s future generation mix, and check which document it cites.
- If it cites the LTGEP 2025–2044, add the interim report to your next disclosure rather than replacing one with the other, and note that the interim plan is under revision.
- If your transition plan assumes an oil-free grid from 2030, note that the regulator has said the operator’s plan may not deliver it.
- If you are building a renewable procurement case for a 2027 to 2029 commissioning date, test it against a grid that is two-thirds renewable, and against the possibility that curtailment keeps the delivered share lower.
- If you are a listed company or an industry association, ask PUCSL whether the full LTPSDP 2027–2046 will be opened for public comment before it is approved in 2027.
Sources & Further Reading
Public Utilities Commission of Sri Lanka, “Communications Related to Interim Report (2027-2029) of LTPSDP 2027 – 2046”, 16 September 2026 — pucsl.gov.lk
National System Operator, Interim Report (2027–2029) of the Long Term Power System Development Plan 2027–2046, submitted 9 July 2026 — pucsl.gov.lk
National System Operator, updated Interim Report (2027–2029) of the Long Term Power System Development Plan 2027–2046, submitted 10 August 2026 — pucsl.gov.lk
Public Utilities Commission of Sri Lanka, “Recommendations for the Interim Report (2027-2029) of Long Term Power System Development Plan 2027-2046”, ref. PUC/LIC/2026/NSO/46, 9 September 2026 — pucsl.gov.lk
Ceylon Electricity Board, Long Term Generation Expansion Plan 2025–2044 — ceb.lk
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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.