KSERC Approves Lower Tariff Of Rs 2.44/kWh To Procure Solar Power From TP Saurya

The Kerala State Power Regulatory Commission (KSERC) has accepted a lower tariff of Rs 2.44 per kWh proposed by the Kerala State Electricity Board (KSEB) for the purchase of 110 MW of solar electricity from a fully owned Tata Power subsidiary, TP Saurya.

In September 2020, KSEB had invited bids for 200 MW of solar energy to be installed. The auction’s winning bidders were NTPC and Tata Power, which acquired 90 MW and 110 MW capacity for Rs 2.97 per kWh, respectively. 

Previously, KSEB had filed a petition seeking authorization to enter into power purchase agreements (PPAs) with NTPC and Tata Power for 90 MW and 110 MW of solar electricity, respectively, at Rs 2.97 per kWh, which the Commission had approved.

Later, KSEB, stated that the reverse auction pricing discovered to buy 200 MW of solar power was relatively high when compared to SECI’s earlier auctions. Thus, it issued an order to examine the procurement mechanism for power. The rate of Rs 2.44 per kWh found in SECI’s Tranche-IX auction was used, along with a trading margin of Rs 0.07 per kWh.

The state energy board detected a Rs 0.44 per kWh disparity between the KSEB offer and the pricing discovered in SECI’s tranche-IX auction. As a result, at a capacity utilization factor (CUF) of 25%, the additional obligation for KSEB was projected to be Rs 16.4 million per month.

Consequently, KSEB requested that TP Saurya and NTPC rethink the pricing. TP Saurya promised to cut the tariff from Rs 2.97/kWh to Rs 2.44/kWh. NTPC, on the other hand, denied lowering the tariff, because of which KSEB opted not to enforce the PPA with NTPC at the Rs 2.97 per kWh tariff.

The state electricity board opted to purchase 110 MW of solar power from TP Saurya for a tariff of Rs 2.44/kWh and to finalize the PPA. It sought that the Commission accepts a decreased pricing of Rs 2.44/kWh and confirm KSEB’s activity in carrying out the PPA with TP Saurya for the procurement process.

The lower pricing proposed by TP Saurya and agreed by KSEB benefits the state’s customers. Thus, the Commission authorized a lower rate of Rs 2.44 per kWh for the procurement of 110 MW of solar energy.