The Kerala State Electricity Regulatory Commission recently addressed a petition by the Kerala State Electricity Board Ltd. (KSEBL) regarding the approval of a Power Sale Agreement (PSA) signed with the Solar Energy Corporation of India (SECI). This agreement facilitates the procurement of 500 MW of solar power with 250 MW available for peak power during specific hours. The initiative falls under the ISTS Tranche XV Scheme, a project aimed at integrating renewable energy with energy storage solutions to ensure a stable power supply.
KSEBL submitted the petition in October 2024, citing the importance of renewable energy storage in meeting rising power demands and fulfilling Renewable Purchase Obligations (RPO). The PSA, signed in September 2024, outlines a 25-year commitment to source power from solar developers identified through SECI’s competitive bidding process. The scheme features energy storage systems to provide two hours of firm peak power daily, enhancing operational reliability.
SECI, established by the Government of India to promote renewable energy, acted as an intermediary procurer. After conducting a transparent bidding process in July 2024, it finalized agreements with developers to deliver the required energy. Key developers included Pace Digitek Infra, Hero Solar Energy, and ACME Solar Holdings, with tariffs ranging between ₹3.41 and ₹3.42 per unit. The project’s commissioning is scheduled for September 2026, two years after the agreement date.
During the hearing, KSEBL highlighted the scheme’s role in addressing peak-hour energy deficits and optimizing the energy mix. The proposal also aligns with global trends where commercial and industrial consumers increasingly prefer green tariffs. However, the Commission expressed concerns about the estimated cost of power at the Kerala periphery, expected to range from ₹3.94 to ₹3.95 per unit, including interstate transmission charges and losses. While the guaranteed peak power is advantageous, the low capacity utilization factor (CUF) of 25–27% raises questions about cost-effectiveness.
The Commission directed KSEBL to evaluate and optimize power procurement strategies further. It emphasized the need for a comprehensive resource adequacy plan that considers cost impacts and supports long-term sustainability. Additionally, the Commission suggested early project commissioning to reduce interstate transmission charges, potentially lowering power costs to ₹3.79–₹3.80 per unit.
In its final order, the Commission approved the PSA with conditions and recommendations. It advised KSEBL to collaborate with SECI and developers to expedite project timelines and ensure optimal implementation. This decision reflects a balanced approach, supporting renewable energy integration while addressing economic considerations.
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