By: Staff Writer
July 27, Colombo (LNW):The Public Utilities Commission of Sri Lanka’s (PUCSL) proposal to introduce a Feed-in Tariff (FIT) for Battery Energy Storage Systems (BESS) is drawing increasing scrutiny amid concerns that the mechanism could saddle electricity consumers with avoidable costs while departing from the country’s established competitive procurement framework.
At the centre of the controversy is the commission’s proposal to pay owners of rooftop solar systems integrated with battery storage between Rs. 41.56 and Rs. 66.53 per unit during the priority evening period from 5.30 p.m. to 9.30 p.m. Standalone battery storage projects would receive between Rs. 30.83 and Rs. 50.01 per unit, in addition to a charging component linked to the prevailing daytime electricity tariff.
While the PUCSL argues the tariffs are designed to accelerate investment in battery storage and strengthen renewable energy integration, industry experts question whether consumers will ultimately bear the financial burden through higher electricity tariffs.
Several energy experts , questioned the rationale behind offering administratively determined tariffs reaching Rs. 66.53 per unit when competitive market prices appear to be significantly lower.
The engineer pointed to bids reportedly received for an NSO tender for a 10 MW battery energy storage project, where prices were said to be around Rs. 20 per unit less than one-third of the maximum tariff proposed by the regulator.
“If storage can be procured competitively at around Rs. 20 per unit, why should consumers finance projects at rates exceeding Rs. 60?” the source questioned, warning that the difference could eventually be reflected in electricity prices paid by households and businesses.
The concerns are amplified by the Sri Lanka Electricity Act and successive Government energy policies, both of which have promoted competitive procurement as the preferred method of purchasing electricity. Critics argue that introducing a new FIT for battery storage represents a significant policy shift that should first undergo broader Government approval backed by detailed technical and economic studies.
Instead, they contend, the proposal has emerged through the tariff review process without a comprehensive assessment of its long-term financial implications.
Another issue raised is the potential for duplication of investments.
The NSO is already procuring utility-scale battery storage through competitive tenders to improve grid stability and integrate renewable energy. At the same time, the proposed FIT would encourage rooftop solar owners, private developers and distribution licensees to install their own battery systems.
Critics warn that without coordinated national planning, Sri Lanka could end up paying for overlapping storage capacity that exceeds actual system requirements.
Such duplication, they argue, could result in unnecessary capital expenditure eventually recovered through electricity tariffs.
NSO Chairman Dr. Pradeep Perera, however, rejected suggestions that the proposal lacks technical justification.
He said battery storage is essential if Sri Lanka is to reduce its dependence on imported fossil fuels and transform intermittent renewable energy into dependable electricity capable of meeting evening demand.
While acknowledging discussions to reduce the proposed tariff closer to the cost of furnace oil generation, Dr. Perera maintained that urgent circumstances justify the FIT approach.
Competitive bidding remains the preferred option, he said, but lengthy tender processes may not deliver the additional 450 MW of capacity expected to be needed during anticipated El Niño conditions.
The debate now confronting policymakers is whether accelerating battery deployment justifies the higher upfront costs or whether consumers may ultimately be paying a premium for speed rather than value.
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