A senior Sri Lankan official confirmed on Tuesday that his government had resumed discussions with India on a project to link the two nations' electricity grids.
Wasantha Perera, secretary of Sri Lanka's power ministry, told Reuters negotiations on the project were at “very initial stages”.
The project is considered a major long-term initiative to boost power generation in Sri Lanka. The ongoing economic crisis has seen widespread power outages in the country. Moreover, the initiative is also seen as a means to reinforce ties between New Delhi and Colombo and negate China's influence in the island nation.
Plans to interlink the two nations' electricity grids were first mooted over a decade ago, with the governments signing a pact in 2010. At that time, the project was estimated to have a cost of about Rs 4,000 crore and was expected to facilitate exchange of about 1,000MW of power.
The Hindu reported in 2011 “the feasibility study envisages laying cable at a depth of 25 metres below the Mean Sea Level for 500 metre span while crossing the Setu Samudram Canal. India-Sri Lanka electricity grid interconnection would span 360 Km of lines, including 120 Km of sea route”. The project envisioned a transmission line that would run from Madurai in Tamil Nadu to Anduradhapura in north-central province of Sri Lanka.
A study by the National Renewable Energy Laboratory of the US Department of Energy argued a 500MW high-voltage direct current transmission line between the two nations could save around $180 million annually and improve power system operations by 2025. The NREL study noted “cost savings occur in Sri Lanka, where annual production costs decrease 35%”. The study also noted grid connectivity would improve use of renewable energy in both nations.