ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board said it has begun seeking funds to build a 600 MegaWatt pumped storage plant to integrate solar and wind energy and maintain grid stability.
The CEB wanted to tap multilateral lenders to reduce electricity sales prices.
“At a recent meeting, international development partners were introduced to the project’s financial roadmap,” the power utility said in a statement Friday.
“CEB aims to secure long-term funding from international agencies to minimize impacts on electricity tariffs while ensuring affordability for consumers.”
Sri Lanka is just emerging from a sovereign default, and is trying to minimize interest costs.
A pumped storage power plant (PSPP) involves two reservoirs where water from the lower reservoir is pumped to the one in the higher location when renewable power like solar exceeds requirements. They can then be used in the night when demand goes up.
A PSPP can be used for frequency control and prevent the grid from being de-stabilized by solar.
Sri Lanka suffered a cascading power failure last week, which the utility said was due to insufficient inertia in the system to cope with voltage changes amid a high share of rooftop solar.
The 600 MW project will store excess renewable energy from solar and wind sources, ensuring grid stability and supporting Sri Lanka’s goal of generating 70 percent of electricity from renewables by 2030.
Renewable power does not pollute the environment unlike thermal sources and will also add to gross domestic product as long as the plants are built by domestic investors.
However, due to requirements such as pumped storage plants and additional investment to the grid to make it ‘smart’, the cost of renewables are higher than indicated by its levelized generation cost.
The CEB has found several locations for pumped storage plants.
A 2014 study found that the Maha Oya location would cost 1332.2 dollars per kilowatt or around 799 million dollars for the project at the time.
The Maha Oya location involves two reservoirs in Aranayake in the Kegalle district and Nawalapitiya in the Kandy district connected by a 2.5 kilometre tunnel.
A Japanese funded study in 2018 also found another location with Victoria as one reservoir and an expanded irrigation pond in Wewatenna as the second reservoir which could accommodate 4 plants of 350 MW each.
The plants would cost 818.9 dollars per kW, according to a 2018 study, including interest during construction or about 1,146 million US dollars for the whole project. (Colombo/Feb21/2025)
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