KSERC Clears KSEBL’s PSA With SECI For 500 MW Project

KSERC Clears KSEBL's PSA with SECI for 500 MW Power Procurement

The Kerala State Electricity Regulatory Commission (KSERC) recently reviewed a petition filed by the Kerala State Electricity Board Ltd. (KSEBL) seeking approval for a Power Sale Agreement (PSA) with the Solar Energy Corporation of India (SECI). The agreement entails procuring 500 MW of power, including 250 MW allocated for two hours of peak power supply under SECI’s ISTS Tranche XV scheme.

In its order, KSERC determined that the per-unit cost of power from the project would be approximately ₹3.94/unit to ₹3.95/unit at the state boundaries of the buying entities. The trading margin of ₹0.07/kWh would be payable by the end procurer to the intermediary procurer. The commission also mandated the intermediary procurer to enter into a Power Purchase Agreement (PPA) with the renewable energy power developer and a PSA with the end procurer.

Key Directives

1. The commission approved the PSA dated September 12, 2024, signed between SECI and KSEBL for procuring 500 MW of power, including 250 MW for two hours of peak power supply, subject to the observations and directions in paragraphs 13 to 17 of the order.
2. KSEBL, through SECI, should request the Solar Power Developers (SPDs) to expedite the commissioning of the project by at least three months before the Scheduled Commercial Operation Date (SCOD) of September 27, 2026, i.e., by June 27, 2026.

KSERC further elaborated that the approximate per-unit cost of ISTS charges is ₹0.62/unit, of which ₹0.31/unit would be borne by the buying entities. Additionally, ISTS losses—approximately 4% of the energy transacted through the ISTS system—would add ₹0.15/unit to the cost, bringing the total per-unit cost to ₹3.94/unit to ₹3.95/unit.

However, advancing the SCOD to June 30, 2026, could reduce ISTS transmission charges from 50% to 25%, lowering the power cost to ₹3.79/unit to ₹3.80/unit. The commission emphasized the financial benefits of early commissioning and directed KSEBL to actively monitor the project’s progress in coordination with SECI and the SPDs.

Background

KSEBL initially filed the petition on October 23, 2024, seeking approval for the PSA with SECI under tariff-based competitive bidding. The agreement aimed to procure 500 MW of power, including 250 MW allocated for two hours of peak power supply under SECI’s ISTS Tranche XV scheme.

Financial Implications

KSERC highlighted that early project commissioning would significantly reduce ISTS transmission charges, saving approximately ₹0.15/unit. KSEBL was instructed to work through SECI to ensure the SPDs complete the project at least three months ahead of the SCOD and to regularly track the progress of the installation.