Kerala bought electricity worth ₹56,904 crore from outside in 5 years

Kochi: Kerala purchased electricity worth ₹56,904 crore from outside the state over the past 5 years. Power purchases from external sources have imposed a huge financial burden and losses on both consumers and the Kerala State Electricity Board (KSEB). Power purchases had been declining over the past 2 years.

However, power purchases are likely to rise this year and could reach an all-time high due to deficient rainfall, low water levels in dams and the possibility of a hotter summer caused by the El Niño phenomenon.

Electricity in the state comes from the central allocation, domestic hydropower generation, solar power and power purchases. Kerala receives around 1,600 MW each from its central allocation and domestic hydropower generation. Another 2,200 MW is generated through KSEB's solar plants and rooftop solar installations. In addition to this, the state has to purchase large quantities of electricity from outside at high prices, including during emergencies. Solar power also goes unused during the daytime.

Kerala purchased electricity worth ₹12,982.59 crore in 2023-24. This fell to ₹12,749.65 crore in 2024-25 and further to ₹11,399.30 crore in 2025-26. The main reason was the decision to limit power purchases to the hours when electricity was actually needed, mainly at night, instead of purchasing power round the clock as in earlier years. The cancellation of a 465-MW power purchase agreement also contributed to the decline.

Kerala received a reasonably good monsoon in 2025-26. However, towards the end of this year's monsoon, KSEB's dams have enough water to generate only 246 crore units of electricity. At the same time last year, the dams had enough water to generate 328 crore units.

This year, Kerala has already entered into an agreement to purchase 200 MW of solar power at ₹2.93 per unit. The KSEB has also approached the regulatory commission seeking approval to purchase 85 crore units of electricity for ₹750 crore from September 2026 to 2027.

Meanwhile, there has been little progress beyond announcements on measures such as Battery Energy Storage Systems (BESS) and Pumped Storage Plants (PSP), which could help address the state's power crisis.