Warning of power cuts: El Niño and corruption

The Public Utilities Commission of Sri Lanka (PUCSL) has cautioned of potential power outages due to the effects of the ongoing El Niño weather pattern. This is primarily driven by a projected surge in electricity demand and a potential decrease in power generation, should water levels in hydropower reservoirs drop significantly.

Experts had previously cautioned of power cuts due to the use of substandard coal, which was allegedly procured fraudulently, leading to a shortfall in power generation at the Norochcholai coal-fired power plant. Despite these concerns, the government chose to prioritize political considerations over expert advice, setting the stage for the current predicament.

The director of the Water Management Secretariat of the Mahaweli Authority, Nilantha Dhanapala, appeared optimistic about reservoir water levels, stating that the Mahaweli reservoirs were at 55% capacity, hydropower reservoirs at 64%, and irrigation reservoirs at 52%. He declared the overall reservoir levels as "good". However, the PUCSL remains concerned, suggesting either the situation is more dire than Dhanapala portrays or the cost of operating oil-fired power plants has become prohibitive.

The government's fuel expenditure skyrocketed during the first half of 2026, with fuel import costs reaching USD 3,168 million, compared to USD 1,995 million in the same period in 2025. This cost surge, coupled with the coal procurement scandal, has necessitated increased reliance on oil-fired power generation to compensate for the shortfall at Norochcholai, further driving up fuel costs.

While factors such as increased international oil prices, higher import volumes, and higher expenditure on refined petroleum products contribute to the surge, the substantial shortfall in Norochcholai's coal-fired power generation has also played a role. The Ceylon Petroleum Corporation (CPC) acknowledged purchasing diesel shipments at prices that appear inflated, likely driven by the government's desperation to keep diesel-fired power plants operational to offset the decrease in Norochcholai's power output.

The government's decision to appoint a Presidential Commission of Inquiry to investigate coal procurement from 2009 to 2026, rather than addressing the coal procurement scandal, suggests a clear bias. This lack of transparency and accountability has only exacerbated the situation, with power cuts potentially having a significant negative impact on the country's economic recovery efforts.