Power generation headed upward over the years as defensiveness made the sector resilient against economic fluctuations according to First Capital Research’s GREEN ENERGY report.
Power generation in Gigawatt hours (GWh) has been continuously growing in Sri Lanka over the decades at a 15-year CAGR of 6% and it is expected to grow at even a faster pace over the next decade.
The report adds that Growth in electricity consumption under the tariff categories of
‘Industrial’ and ‘Commercial’ may further accelerate with the gradual rebound in economic activities along with rapid digitalization despite a temporary setback due to the Covid-19 pandemic.
No. of consumer accounts under the commercial category too has been growing over the years at a faster rate than the Domestic and Religious category.
Growth in electricity sales in GWh over the years has been gravitated to the growth in GDP and is expected to follow a similar trend in the coming years.
According to sources from CBSL and Ceylon Electricity Board, First Capital Research estimates that Sri Lanka’s Energy Mix Composition of the total Installed Capacity (MW) over the years shows a continuous growth in Hydro and ORE. Sri Lanka’s vision is to achieve 70% of electricity generated from RE and meet 1/3 of the energy demand from NCRE sources.
Sri Lanka has laid the foundation for various Projects in Sri Lanka towards its Renewable Energy Goal and today ‘Total Renewable Energy’ has a share of 36% of the overall mix.
Planned capacity expansions at the end of 20 years are 1,323MW from wind, 2,210MW from solar, 654MW from mini-hydro and 144MW from biomass.
CEB has also signed Power Purchase Agreements (PPA) for further 539MW ORE power plants. Multiple roof-top solar projects to be developed with more private sector participation.
Operations in Bangladesh and Uganda are distinguished in the composition of income streams of local players, which accounts for a sizable portion in respect of foreign income. Pakistan and Ukraine also generate a noteworthy contribution while Nepal will also expect to join the pack in the coming years.
Commenting on risks for investor the report says, “Occasional changes in policies and regulations pertaining to the power generation will deliver a higher level of risk towards the stability of the sector.
Inability to enforce the policies and goals established upon the adoption of renewable energy sources will lead to confusion and distress among the players as the majority of renewable energy produced by private players.
Given the long-term nature of the projects and high switching costs, any regulatory revisions, political unrest and change in government perception towards the power sector in overseas regions will bring additional risk for the players who are engaged in overseas operations.”
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