Abstract Sri Lanka has had a hydropower dominated electricity generation sector for many years with a gradually decreasing percentage contribution from hydroresources. At the same time, the thermal generation share has been increasing over the years. Therefore, the expected fuel mix in the future in the large scale thermal generation system would be dominated by petroleum products and coal. This will result in a gradual increase in greenhouse gas (GHG) and other environmental emissions in the power sector and, hence, require special attention to possible mitigation measures. This paper analyses both the supply side and demand side (DSM) options available in the Sri Lanka power sector in mitigating emissions in the sector considering the technical feasibility and potential of such options. Further, the paper examines the carbon abatement costs associated with such supply side and DSM interventions using an integrated resource planning model, which is not used in Sri Lanka at present. The sensitivities of the final generation costs and emissions to different input parameters, such as discount rates, fuel prices and capital costs, are also presented in the paper. It is concluded that while some DSM measures are economically attractive as mitigation measures, all the supply side options have a relatively high cost of mitigation, particularly in the context of GHG emission mitigation. Further it is observed that when compared with the projected price of carbon under different global carbon trading scenarios, these supply side options cannot provide economically beneficial CO 2 mitigation in countries like Sri Lanka.