Over 70 percent of the island's total energy consumption was satisfied by firewood, agricultural residues, and animal waste, mostly for household use. The country had no coal or petroleum deposits, and the only other indigenous energy source was hydropower.
In 1927 the Department of Government Electrical Undertakings, now called the Ceylon Electricity Board, took over the transmission of electricity throughout the country. Hydroelectric power came into use in 1951 with the commissioning of the Laksapana project in Central Province. Demand for power increased from approximately 20 megawatts in 1951 to nearly 73 megawatts in 1963, about 90 percent of which was met from hydroelectric sources. In the 1970s, the island increasingly came to rely on imported oil for the generation of electricity, but new hydroelectric capacity from the Mahaweli project in the 1980s reduced the importance of oil. In 1986 total installed capacity was 1,010 megawatts, of which 74 percent was from hydropower.
In early 1988, it appeared that the Mahaweli project would solve Sri Lanka's electricity supply problem for the foreseeable future. This integrated power generation and irrigation project started contributing to power supplies in 1984 when the first two phases of the Victoria Dam were completed, adding 140 megawatts to installed power capacity. In April 1985, the final stage of the Victoria Dam increased capacity by 70 megawatts. A slightly greater capacity was expected to result in the late 1980s.
United States and British-owned oil companies in Sri Lanka were nationalized in 1963, and since then the importing, refining, and distributing of all oil products has been the responsibility of the Ceylon Petroleum Corporation, the state oil company. Its oil refinery started production in 1969. The main products in 1986 were fuel oil (559,497 tons), heavy diesel (60,995 tons), auto diesel (406,569 tons), kerosene (153,692 tons), and gasoline (123,089 tons).
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