The state-owned Ceylon Electricity Board (CEB) is hoping that by expanding capacity at existing sites it would be able to buy power at a slightly lower rate than from greenfield projects.
Seneviratne says the CEB is looking for the cheapest suppliers who are expected to use furnace oil burning plants.
By July-August 2008 a 200MW gas turbine stage of a 300MW combined cycle plant in Kerawalapitiya, just north of Colombo, is scheduled to come on stream.
Its 100MW steam stage is expected to be connected a year later.
However uncertainty remains over when a Chinese funded coal plant in Puttalam would be completed, though it is hoped that it would be finished by 2011 or 2012.
A 150MW hydro plant in Upper Kotmale in the hill country is also expected to completed around that time.
In early 2008 the CEB is also expected to face a power crunch until the Kerawalapitiya combined cycle plant comes on line, though officials are hoping to avoid power cuts if there is sufficient rain.
With the government aiming for economic growth of around 7 percent power demand is expected to grow around 8 to 10 percent a year.
Officials say in the first nine months of the year energy demand has only grown by five percent and in 2006 it was only eight percent.
Energy experts say plants such as Lakdhanavi and Heladanavi would be well placed to give additional power. The plants run by CEB affiliate Lanka Transformers has private sector partners such as the Hemas Group.
Some others such as those operated by the Aitken Spence group are located in areas may lack sufficient transmission line capacity to export the power to the grid.
The CEB is in dire financial straits as it has been run to the ground to feed the populist ideals of politicians who want to give cheap power to the country in a bid to buy votes.
The government has promised not to increase electricity or fuel prices until the end of the year.
The building of the coal plant has been delayed for about two decades due to political interference, forcing the utility to buy expensive liquid thermal power.
Sri Lanka's politicians had consistently undermined the carefully laid long-term generation plans of the utility, for political expediency.
The purchase of 200MW of additional power through smaller internal combustion engines could mean that a controversial second combined cycle plant may not come on line.
The smaller plants would optimize the use of generating capacity after the coal plant comes on line.
Engineers had previously opposed a Japanese funded large second combined cycle plant as it would have made it difficult to balance demand and supply after the coal plant is connected to the grid..