Numerous are the achievements of the energy sector over the past few decades and

numerous are the impending challenges on the energy sector of Sri Lanka.

Our nation has achieved complete electrification and fulfilled many other policy goals and milestones set in the National Energy Policy & Strategies of Sri Lanka (2008).

Sri Lanka is ranked high among the countries with a large share of renewable energy, with a strong commitment to retain this vital attribute of the nation’s economic resilience

in a world of diminishing energy security.

This policy statement is meant to chart the future course of the energy sector of the country,

which in turn will contribute towards a stable economy.

Emerging from decades of internal strife, the whole country has been

provided with uninterrupted electricity supply.

Large and small enterprises across the country are looking ahead for better and productive use of material and human resources with the availability of electricity.

Other forms of energy such as liquid and gaseous petroleum fuels too are delivered to the whole country, realizing the dream of providing access to modern forms of energy to all citizens.

The evolving structure of the economy suggests that Sri Lanka will continue

its journey along the energy frugal economic development path,

with a strong services sector accounting for more than 60% of the GDP.

Nevertheless, great strides are being made to steer the economy towards a knowledge fuelled economy, which too will assist to keep the energy intensity of economy at current healthy levels.

This policy will pave the way for Sri Lanka to emerge as a strong economy with lesser dependence on energy, in a world constricted by frequent energy crises.

This policy will proactively transform the energy industry from a subsidy-burdened,

survival-focused state to an innovation driven catalyser of the national economy,

preparing the country for the global energy transition.

The newfound economic freedom of citizens will create a conducive environment

to improve the quality of energy services to a level where cost reflectivity of prices

paid by the citizens will be accepted without any hesitation.

This policy will also nurture the energy sector by strengthening the capability of sector professionals to manage the energy sector efficiently and effectively to benefit all Sri Lankans in the long term.

Emerging role of renewable energy, amidst the ever-evolving technological capabilities

and new levels of integration made possible by information and communications technology

will be recognized as one of the key thrusts to retain

the share of renewable energy in the national energy supply.

Similarly, energy efficiency across the entire value chain will be improved

to keep the growth of energy demand at optimum levels.

This effort assures Sri Lanka’s unreserved commitment to fight the challenges

posed by climate change by integrating efforts of all stakeholders of the energy industry

to a focused, meaningful and a viable response to climate change.


1.1  Energy Supply

Global energy industry has entered a decisive phase of transition, where an increasing number of supply options, newer energy carriers and the growing demand, contribute to increase the complexity of the industry.  Sri Lanka too, will face this transition during the next few decades, and the energy industry in transition will fuel the growing economy of the country, opening many frontiers and opportunities.  This policy spells out ways and means of steering the energy sector in transition to power the nation and its social market economy, aiming at higher levels of stability, security, affordability and sustainability with the least environmental burden, and provide a fertile ground for all public and private enterprises, homes and institutions to flourish in a future, where energy will not be a constraint.

Sri Lanka is ranked in the mid-range of United Nations Human Development Index, while the annual GDP per capita too is in the mid-range, at USD 4,065 (2017)[1]. The government’s drive to reach the upper middle-income level within this decade intensifies the role of energy in Sri Lanka’s economy. As a nation embarking on a progressive social market economy after a three decade-long conflict, a holistic approach to development is desirable, compared with an incremental approach. An energy policy consistent with social and economic development goals is required owing to significant impacts of the energy sector on each social and economic activity of the country.

Sri Lanka maintains a comparatively lower energy intensity of economy, using 0.47TJ of commercial energy to produce one million LKR of GDP[2]. The challenge posed to Sri Lanka is to maintain the lower energy intensity, while accelerating the growth of the economy. Sri Lanka has reached the important milestone of 100% electrification, thereby fulfilling the goal of providing modern energy sources to all the citizens.

Economic growth amidst universal access requires the energy supply capacity to be steadily increased. The growth in demand can also be managed by improving the efficiency of energy conversion. Continued efforts to maintain a low energy intensity status requires to be rewarded with a lower burden on the economy and the environment. Increased efforts on demand management through policy driven incentives are required to meet this goal amidst high economic growth.

Upgrading the transport modes to more efficient systems along with transport infrastructure development and stimulating the use of other forms of energy beyond petroleum products through policy interventions would be required to effectively manage energy use in transport, the largest consuming sector of commercial energy.

The relatively high share of renewable energy (RE) in the country’s primary energy portfolio is bound to progressively reduce because the major portion of hydropower potential has already been tapped. With the shifting of household energy use toward fossil fuels, the growing demand for all forms of energy is increasingly being met with fossil fuels.  Water resources serve multiple needs, power generation being the third priority after drinking water and agricultural demand, further complicating issues related to projects such as the Mahaweli Stage II development.  A paradigm shift of policy is envisaged to defend and improve the share of renewables in the primary energy supply from the level maintained at 55% during the last decade.

The National Energy Policy and Strategies present how Sri Lanka plans to meet the challenge of developing and managing the energy sector to ensure delivery of reliable, cost-effective, and competitively priced energy services from diverse sources to fuel the social market economy.

Sri Lanka weathered many energy crises over the last few decades due to resilience garnered from many deep roots.  These roots can be identified as the impressive use of biomass resources, year-round sunshine and higher rainfall, combined with frugal lifestyle of her people and the small geographical expanse of the country.

Having nourished the national economy from these deep roots, Sri Lanka was first in the region to bare fruits, in terms of extending the coverage of the national electricity supply to serve the whole country with an uninterrupted supply. The reliability of energy systems has attracted services sector to the country, leveraging more economic benefits to the country with the least possible input of energy.  This has caused a structural change in the economy towards services, in sharp contrast to other developing economies experiencing steep growth in the energy intensity of economy.

Reliability and affordability of both indigenous and global energy supplies will be the most desirable ingredient in this economy in transition.  The country is looking into a future where strong emphasis will be on developing the increasingly competitive newly assessed resources for electricity generation such as wind and solar.  Biomass, probably the most important energy resource, will play an even more valuable role by making a transformation to a convenient fuel for household use and a dependable resource for industrial thermal energy supply.

Sri Lanka desires to be elevated to an ‘energy empowered’ nation by developing strategies and conversion technologies to use the vast indigenous resources.  Whilst continuous efforts will be made to strengthen the petroleum sector from upstream resource development to downstream diversification, initiatives will be made to elevate the status of electricity as a major energy carrier.  Energy transition in the transport sector, from liquid petroleum dominance to other energy carriers will be actively pursued.  Electricity will take the pride of place in the quest for discovering new energy carriers, drawing resources from increasing amounts of indigenous resources, whilst securing supply routes for global resources.  Whilst securing land resources for important energy infrastructure elements such as gas terminals, electricity generation sites and transmission corridors, energy storage will be taken as a prime carrier to transcend the space and time boundaries which constrained the traditional energy systems.

Aligning Sri Lanka with Goal 7 of the Sustainable Development Goals (SDGs) of the UN, this policy would contribute to achieve universal access to affordable, reliable, sustainable and modern energy for all by 2020, a decade ahead of the UN target.  The policy will also contribute to reduce the dependence of Sri Lanka on fossil fuels to below 50% of the primary energy supply and to reduce the specific energy use across all end-uses by 20% of 2015 level, by 2030.  This policy will pave the way to realise the vision of Sri Lanka in achieving carbon neutrality and complete transition of all the energy value chains by 2050.  The policy provides the necessary space for establishing key manufacturing industries supplying sustainable energy technologies to the local market and forge alliances with other developing countries through South-South cooperation by developing knowledge products and sustainable energy technologies in line with Goal 7 of the SDGs.

This policy document has three sections:

The National Energy Policy, stating the ten pillars of the policy framework

Implementing Strategies, describing the specific strategies to implement the policy

The Results Delivery Framework, elaborating the specific actions, milestones and the institutions responsible

This policy supersedes all previous policies, strategies, plans and guidelines published from time to time.  This national energy policy and implementing strategies will be in effect until it is reviewed in consideration of any major changes in the external environment.  Such policy reviews will be conducted at least once in six years. The Results Delivery Framework, (separately published) aligned with the policy and strategies will be revised in two-year intervals.


[1] The World Bank

[2]Sri Lanka Energy Balance 2016, Sri Lanka Sustainable Energy Authority

1.2  National Energy Policy

The primary objective of the energy policy is to ensure energy security through supplies that are cleaner, secure, economical and reliable, to provide convenient, affordable energy services to support socially equitable development of Sri Lanka. Policy guidelines such as, the ’General Policy Guidelines on the Electricity Industry’ as required under Sri Lanka Electricity Act No. 20 of 2009 statutorily required to be issued for each sub sector, are expected to be prepared and issued, based on this national energy policy.

Working through the conflicting demands from the security, equity and sustainability dimensions, known as the energy trilemma, Sri Lanka today is seen to be moving away from the delicate balance of these three forces.  The national energy policy is thus founded on ten pillars, rooted in the broad areas impacting the society, economy and the environment, in an effort to counterbalance the forces through enhanced equity, security and sustainability, respectively.

    1. Assuring Energy Security
    2. Providing Access to Energy Services
    3. Providing Energy Services at the Optimum Cost to the National Economy
    4. Improving Energy Efficiency and Conservation
    5. Enhancing Self Reliance
    6. Caring for the Environment
    7. Enhancing the Share of Renewable Energy
    8. Strengthening Good Governance in the Energy Sector
    9. Securing Land for Future Energy Infrastructure
    10. Providing Opportunities for Innovation and Entrepreneurship

    This approach is graphically depicted below:





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