Kerala State Electricity Regulatory Commission (KSERC) has approved a Power Sale Agreement (PSA) between Kerala State Electricity Board Ltd (KSEBL) and the Solar Energy Corporation of India (SECI) for the purchase of 200 MW of solar power combined with a 100 MW/400 MWh Energy Storage System (ESS). The approval is aimed at helping Kerala meet its growing evening peak power demand by securing reliable renewable energy at a competitive price.
The decision was issued through an order dated July 27, 2026, by KSERC Chairman T. K. Jose and Member B. Pradeep. The agreement is part of SECI’s ISTS Tranche XX scheme and involves power procurement from Welspun Renewable Energy Private Limited through its special purpose vehicle, Satpura Renewable Private Ltd. The solar and storage facility will be located in Jamnagar, Gujarat.
Under the 25-year agreement, the discovered tariff for the electricity is ₹2.86 per unit. An additional trading margin of ₹0.07 per unit will be paid to SECI, making the total effective tariff ₹2.93 per unit at the delivery point. The arrangement is expected to provide KSEBL with affordable and dispatchable renewable power compared with the high prices often seen in the electricity market during peak hours.
The project has been designed specifically to address Kerala’s evening power shortages. The developer will be required to supply 2,000 kWh per MW every day during the peak period between 6 pm and midnight. This will provide around 146 million units (MUs) of peak energy annually. During non-peak hours, the project must meet minimum annual supply requirements of 417.26 MUs for the first 10 years and 392.72 MUs after that.
To maintain reliability, the agreement includes strict penalties for supply shortfalls or unauthorized sale of power to third parties. Any deficit will attract penalties equal to 1.5 times the agreed tariff, ensuring that the developer meets its contractual obligations.
A major advantage for KSEBL is the exemption from Inter-State Transmission System (ISTS) charges. Under central government guidelines, co-located battery storage projects commissioned on or before June 30, 2028, are eligible for a full ISTS charge waiver. Since the effective Power Purchase Agreement date is April 1, 2026, and the scheduled start of supply is April 1, 2028, KSEBL is expected to avoid major transmission costs and pay only limited transmission losses.
During the regulatory proceedings, KSEBL informed the Commission that electricity purchased from power exchanges during peak periods often costs around ₹9 per unit. Compared with this, the fixed tariff of ₹2.93 per unit for firm solar and storage power is expected to significantly reduce procurement costs.
KSERC noted that Kerala’s peak electricity demand has recently crossed 6,100 MW. The Commission also pointed out that SECI has currently tied up only 500 MW of the 2,000 MW capacity available under the tranche. It advised KSEBL to consider purchasing additional capacity under the scheme.
The Commission directed KSEBL to take timely action so that any additional capacity can be commissioned before the June 30, 2028 deadline for ISTS charge exemption. KSEBL has also been asked to submit a progress report on the matter by August 5, 2026.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
