KSERC Extends NTPC Kayamkulam PPA For Three Years, Pushes 500 MW BESS And Floating Solar Expansion In Kerala

The Kerala State Electricity Regulatory Commission (KSERC) has approved a three-year extension of the Power Purchase Agreement (PPA) between the Kerala State Electricity Board Limited (KSEBL) and NTPC Limited for the Rajiv Gandhi Combined Cycle Power Project (RGCCPP) at Kayamkulam. The extended agreement will remain effective from March 1, 2025, providing continued access to power and supporting Kerala’s electricity requirements.

Under the agreement, KSEBL will pay an annual fixed charge of ₹100 crore to maintain the Kayamkulam power station. Although the naphtha-based thermal plant has remained largely inactive for several years, the arrangement allows Kerala to receive 180 MW of power from NTPC’s Talcher-II station. This supply is expected to save the state approximately ₹450 crore annually compared to purchasing electricity at open market rates.

The agreement also focuses on expanding renewable energy capacity in Kerala, particularly floating solar power. NTPC has already commissioned a 92 MW floating solar project dedicated to meeting the state’s electricity requirements. The project supplies electricity at ₹2.66 per unit, making it the lowest landed solar tariff for KSEBL. It has also helped the state meet its Renewable Purchase Obligations (RPO).

Building on this development, KSERC has directed KSEBL and NTPC to jointly examine the feasibility of developing additional floating solar projects on suitable reservoirs and dams owned by KSEBL. The initiative aims to utilise available water surfaces for solar power generation while reducing the need for large land areas. This approach is particularly relevant for Kerala, where land availability remains a major challenge for large-scale renewable energy projects.

The agreement also includes plans to establish a 500 MW / 2,000 MWh Battery Energy Storage System (BESS) at Kayamkulam. The project will be implemented in phases, with the first phase targeting 250 MW / 1,000 MWh of storage capacity. The proposed system is expected to support grid stability by storing excess solar electricity generated during daytime hours and making it available during periods of higher demand, particularly at night.

Considering the limited implementation period until February 2028, KSERC has emphasised the need for timely execution of these initiatives. The Commission has directed KSEBL to establish a dedicated monitoring team under a full-time Director to oversee project implementation, including floating solar feasibility studies and the proposed BESS installation.

KSEBL will also be required to submit monthly progress reports and publish them online to ensure transparency and accountability. Through the extended agreement, Kerala aims to secure affordable electricity while accelerating floating solar development and battery storage infrastructure to strengthen its renewable energy transition.