Overview
The KSEB has approved the purchase of 300 MW of solar power for a period of 25 years. The power will be procured through the SECI under its FDRE‑IX scheme. Supply is slated to start in 2028 and will be priced at ₹6.07 per unit (including a ₹0.07 trading margin). The contract aims to meet Kerala’s peak‑hour demand when solar generation is unavailable.
Key Developments
- KSEB sanctioned the procurement of 300 MW (equivalent to 1,200 MWh of four‑hour peak power) for 25 years.
- The power will be supplied by ACME Solar Holdings Ltd via a power purchase agreement.
- Tariff fixed at ₹6 per unit plus a SECI trading margin of ₹0.07 per unit.
- The agreement will be placed before the KSEB Regulatory Commission for final approval.
- The project is part of the ISTS, ensuring that the renewable energy can be dispatched reliably.
Important Facts
Under the FDRE‑IX tranche, SECI offered a total of 1,500 MW of renewable capacity with storage. Kerala’s share is 300 MW. SECI acts as an REIA, entering into a PSA with the developer and a separate PSA with the utility.
Exam Relevance
This development touches on several UPSC topics:
- Energy security: Diversifying supply with renewable, dispatchable power reduces dependence on fossil fuels.
- Policy implementation: Shows how central agencies (SECI) coordinate with state utilities (KSEB) under competitive bidding.
- Tariff regulation: Highlights the role of state electricity regulatory commissions in approving rates.
- Renewable integration: Demonstrates the use of storage and inter‑state transmission to make solar power reliable.
Way Forward
For Kerala, the contract will help meet peak‑hour demand from 2028 onward, easing stress on the grid during non‑solar periods. The state should:
- Ensure timely clearance of the PSA by the regulatory commission.
- Coordinate with SECI to integrate the storage‑enabled solar plant into the ISTS.
- Monitor tariff performance and explore similar contracts for other renewable sources.
- Use this model to attract further private investment in clean energy, aligning with India’s solar mission goals.
Overall, the procurement reflects a strategic shift toward reliable, low‑cost renewable energy, a key component of India’s energy‑security and climate‑change agenda.