Kerala Commission Approves Tariff Rate Of Rs 3.50/Kwh For 5.5 MW Solar Capacity Under PM-KUSUM Program

In a recent order, Kerala Electricity Regulatory Commission (KERC) approved discovered tariff rate of Rs.3.50/Kwh for 5.5 MW solar capacity under PM-KUSUM Component-A scheme in the state of Kerala. The commission also ask for clarification in the matter of lease rate at the rate of Rs.0.20/Kwh, to be paid to the farmer whose land was leased out or rented by the Kerala State Electricity Board Limited (KSEBL) for 25 years.

Background

In view of the Ministry of Natural and Renewable Energy (MNRE’s) PM-KUSUM program, MNRE allotted total 40MW solar capacity to the state of Kerala under PM-KUSUM, Component-A scheme. Under the allotted capacity, KSEBL invited tender for the total 40MW capacity under Component-A of PM-KUSUM program. Three bidders participated in the bid namely M/s. Luster Solar Projects (2 MW), M/s. Solaria Energy Solutions (2 MW), Mrs. Pearl Mithun (1.5MW), with total 5.5MW capacity out of total 40MW capacity. All the bidders agreed to match the rates at Rs 3.50/units. The details of the discovered tariff rate given below.

Further, KSEBL will pay Rs.0.20/Kwh lease rent to the farmer of the plant’s land for 25 years time period from the commissioning date of the project. KSEBL will also get Rs.0.40/Kwh procurement based incentive (PBI) or Rs 6.6 lac/MW whichever is lower. The PBI will be valid for 5 years from the date of commissioning of the project. The connectivity of the proposed solar plants will be under 110Kv Rayonpuram substation.

In the context of the above circumstances, KSEBL submitted the following prayers to the commission.

a. Approve the discovered tariff rate of Rs. 3.50/Kwh for the total 5.5 MW solar capacity under PM-KUSUM Component A scheme.

b. Approve the power purchase agreement between the successful bidders and KSEBL for the total 5.5 MW solar capacity.

Commission’s Analysis & Order

After analyzing all inputs received from KSEBL and MNRE’s regulation under PM-KUSUM program, the commission observed the following points pertaining the KSEBL’s petitions.

a. The discovered tariff of Rs.3.50/Kwh is well below the commission’s approved ceiling tariff of Rs.3.66/Kwh for PM-KUSUM Component-A scheme.

b. As the KSEBL will be eligible for procurement based incentive (PBI) at Rs.0.40/Kwh or Rs.6.6Lac/MW whichever is lower, for 5 years from the date of commissioning, the effective tariff rate comes out to be Rs 3.10/Kwh.

c. KSEBL will have sufficient time for commissioning as MNRE has extended the commissioning time line up to 31st Dec 2022.

d. All the proposed solar power plant’s connectivity will be under 110Kv Rayonpuram substation.

In view of the above observation the commission approved the discovered tariff rate of Rs.3.50/Kwh for the total 5.5MW capacity. The commission also asked for clarification whether the lease rent of Rs0.20/Kwh is included in the discovered tariff rate or not. KSEBL have to submit draft PPA for their approval.