Kerala Regulator Gives Nod To Reduced Tariff On Procurement Of Solar Power

The Kerala State Electricity Board (KSEB) has received the nod of the Kerala State Electricity Regulatory Commission (KSERC) towards the procurement of 90 MW of solar power for 25 years at a reduced tariff of Rs 2.77 kWh from NTPC.

The Commission gave its approval to KSEB to finalise the PPA at the lower tariff.

Four years ago, a tender was floated by KSEB towards the set up of 200 MW worth solar projects, the benchmark tariff of which was Rs 3.50. The tender, however, never saw the light of the day. This was followed by the KSEB floating a revised tender for the purchase of 200 MW solar power from ground-mounted power projects in India. Preference, however, was given to projects set up in Kerala. Approval was given by the Commission via competitive bidding. Preference of 10 per cent requisitioned quantity was given for projects in Kerala. Followed by reverse auction, Tata Power bagged 110 MW at Rs 2.97 kWh while NTPC was awarded 90 MW.

Over time, KSEB approved the tariff at 2.97 kWh. KSEB, however, put forth the argument that the tariff be reduced to Rs 2.44. NTPC, on the other hand, offered lowered tariff of Rs 2.77 per kWh for 90 MW.

The lowered tariff as offered by NTPC gained acceptance by KSEB as it was beneficial to state consumers, both the parties were finally asked to sign the final PPA at Rs 2.77 per kWh as opposed to the Rs 2.97 per kWh recommended earlier.

KSEB, the Kerala discom has been pushing harder in recent months to tie-up higher renewable energy not only to meet its RPO obligations, but also because the power prices have become far more competitive in recent tenders for the discom. That, aligned with a push for more self sufficiency by way of rooftop solar has meant that the state has been performing much better in renewable energy use than it was, till 2020-21.