Sri Lanka’s National System Operator (NSO) plans to reduce diesel-based electricity generation to 0.5% of total generation within the next two years, the company’s Chairman Dr. Pradeep Perera has said.
Under the same programme, generation using furnace oil would be cut to 5%, Perera said. He estimated that reducing reliance on expensive liquid fuels would save around Rs. 30 billion in generation costs, with the benefit intended to be passed on to consumers.
To support the shift, the NSO plans to establish a battery storage system with a capacity of 750 megawatts within two years to store electricity generated from solar power. Battery storage is seen as central to absorbing the growing share of intermittent renewable generation on the grid and reducing the need to fire up costly thermal plants at peak times.
Ada Derana, citing the National System Control Centre (NSCC), reported further detail on the rollout, confirming the target of roughly 750 MW of battery storage by the end of 2027 to cut reliance on diesel. According to the NSCC, about 160 MW of battery capacity has already been imported and is being installed, while tenders have been called for a further 250 MW of private-sector storage expected on the grid between March and April next year. A separate 100 MW is being procured by the Ceylon Electricity Board’s transmission arm with Asian Development Bank financing, and plans are under way to add storage at 150 MW of ground-mounted solar plants.
The move aligns with the government’s broader push to expand renewable energy and lower the cost of electricity, a recurring pressure point for households and industry. Sri Lanka has historically leaned on diesel and furnace oil to meet demand shortfalls, particularly during dry spells when hydropower output falls.
