"The demand for electricity is showing indications of slowing down," said Tilak Siyambalapitiya, managing director, Resource Management Associate.

In the last 10 years the average demand growth has been 7.9 percent but in 2007 demand growth fell to 4.5 percent.

In the first quarter of 2008, Siyambalapitiya said, there has been only 3.5 percent growth.

This was below the Gross Domestic Product growth rates, although Sri Lanka's electricity growth rate had always been higher than the GDP growth rate.

"Maybe this year we'll end up with three percent growth," Siyambalapitiya said in a presentation on national energy capacity and requirements and future impacts of the energy crisis on industries.

He was speaking at a seminar for industry organised by the Sri Lanka Ceramics Council, which represents the energy-intensive ceramics sector.

"Possibly, we're getting the same output with a smaller use of electricity," Siyambalapitiya said.

The possible cause for zero electricity demand growth from industry last year could be that some industries shut down, some were running at reduced capacity and some adopted energy efficiency measures, Siyambalapitiya said.

He noted that there was no expansion in energy intensive industries like ceramics and cement, except for a small increase in ceramic output and some grinding capacity in cement manufacture.

Other energy intensive industries included rubber, plastics and glass.

Siyambalapitiya said that with two power plants under construction and another under negotiation with India, the island did not face any immediate threat of power cuts, unlike elsewhere in the region.

"We do have the capacity to meet demand for electricity in the country and there is no immediate threat of power cuts. Of course, there are critical periods, especially in the latter half of 2010 and in 2011."

He said the government was trying to catch up the delays in building new power plants with energy efficiency measures.

"Sri Lanka has no blackouts when almost the entire south Asian region throughout summer had severe blackouts. Even now India has blackouts but Sri Lanka has not for the last six and a half year," Siyambalapitiya noted.

"But the situation is not very good," he said. "We do have electricity supply, no blackouts but electricity comes at a price."

According to a regional comparison of electricity prices, Sri Lanka is the most expensive for commercial customers, and Singapore the most expensive for any customer.

"We are not the most expensive but compared with our competitors in Asia electricity in Sri Lanka for manufacturers is the highest."

Siyambalapitiya also said the electricity sector has a reliability and supply quality challenge which most industrialists must be feeling.

This was because of the lack of investment to modernise transmission and aging control systems.

Outside the western province, problems with reliability are issues facing manufacturers, he said.