Sri Lanka's Cabinet has approved a project to install 300,000 smart electricity meters equipped for Time-of-Use billing, as part of a wider effort to modernise the country's electricity network and support greater integration of renewable energy.
The project is expected to be implemented over two years by Electricity Distribution Lanka (Pvt) Ltd.
Funding will come from the remaining US$12.5 million of an Asian Development Bank-supported financing facility originally obtained for complementary projects intended to strengthen Sri Lanka's renewable-energy programme.
Where does the US$12.5 million come from?
Cabinet approval had previously been granted in October 2024 to obtain US$15 million through the Asian Development Bank's Small Expenditure Financing Facility for complementary renewable-energy-related projects.
Of that amount, US$2.5 million was subsequently allocated for detailed design and procurement documentation associated with the Maha Oya Pumped Storage Power Plant Development Project.
The remaining US$12.5 million is now intended to finance the smart-meter project.
What is a smart electricity meter?
A conventional electricity meter primarily records how much electricity a consumer uses.
A smart or programmable meter can provide more detailed information, including when electricity is consumed.
That capability makes Time-of-Use, or TOU, billing possible.
Under a Time-of-Use tariff, the price of electricity can differ depending on the time at which electricity is consumed.
This gives electricity providers a mechanism to encourage some consumption to shift away from periods when demand on the grid is highest.
Does this mean everyone's electricity price will immediately change?
No such conclusion should be drawn from the Cabinet approval alone.
The decision establishes a project to install 300,000 smart meters with Time-of-Use billing capability. It should not be interpreted as an announcement that every household will immediately move to a new compulsory tariff or that particular new peak and off-peak prices have already been set for these 300,000 meters.
Sri Lanka already has experience with Time-of-Use electricity tariffs.
The Ceylon Electricity Board currently describes a Time-of-Use option for eligible domestic consumers, while the Public Utilities Commission of Sri Lanka also recognizes Time-of-Use as one form of domestic electricity tariff.
The precise tariff arrangements applicable to consumers under the newly approved smart-meter programme will therefore be important when implementation details are announced.
Why does the time electricity is used matter?
Electricity demand is not constant throughout the day.
At certain times, large numbers of households and businesses consume electricity simultaneously, creating periods of higher demand.
A system capable of recording when electricity is consumed can support tariffs that distinguish between high-demand and lower-demand periods.
For consumers, this can potentially create an incentive to shift flexible electricity use to less expensive periods if the applicable tariff provides such a price difference.
For the electricity system, better information about the timing of demand can assist network planning and demand management.
Why are smart meters relevant to renewable energy?
Electricity generation from sources such as solar and wind varies with environmental conditions and time of day.
As the proportion of variable renewable electricity increases, electricity systems need better ways of matching consumption with available generation.
Smart metering does not by itself solve this challenge, but more detailed information about electricity consumption and the ability to implement time-sensitive tariffs can form part of a broader modernised electricity grid.
The Government has described the 300,000-meter project as part of the core programme for modernising Sri Lanka's smart grid and strengthening renewable-energy integration.
What happens next?
Cabinet has approved implementation of the project over a two-year period.
Important details for consumers remain to be established or communicated as implementation progresses, including which consumers will receive the new meters, how they will be selected, the rollout schedule, and the precise tariff arrangements that will apply.
Those details will determine the immediate practical effect of the project on individual electricity users.
For now, the confirmed decision is significant because Sri Lanka is moving toward infrastructure capable of measuring not only how much electricity is consumed, but when it is consumed - an important technical foundation for a more flexible electricity system.
Key Facts
- Project: Smart electricity meter rollout
- Meters: 300,000
- Capability: Time-of-Use billing
- Implementation period: Two years
- Implementing entity: Electricity Distribution Lanka (Pvt) Ltd
- Funding available for project: US$12.5 million
- Original ADB-supported facility: US$15 million
- Previously allocated: US$2.5 million for Maha Oya pumped-storage project design and procurement documentation