KSEB gives up surplus electricity worth crores; nearly one crore units wasted daily

Thiruvananthapuram, Kerala: The Kerala State Electricity Board (KSEB) is giving up 80 lakh to one crore units of electricity every day because it has more power than it needs. This comes amid a continuing dispute over the purchase of electricity at high rates.

Nearly 80 per cent of the surplus electricity is available during daytime, mainly because of solar power generation. The board cannot avoid the entire cost of electricity it has agreed to purchase, even when it does not use the power. It still has to pay a portion of the cost, known as the variable cost (the part of the electricity purchase cost linked to the quantity of power supplied).

As a result, the KSEB incurs losses by paying for electricity that it eventually does not use. Buying more power throughout the day would only increase this financial burden, which could eventually affect consumers.

The KSEB has not been purchasing electricity from Himachal Pradesh or through the GNA arrangement (an arrangement for accessing electricity through the national power transmission network) since November 1. However, power from other sources, including solar energy, is still more than the state's daytime requirement.

When electricity availability exceeds demand, the board has to surrender the surplus power rather than use it.

According to the Southern Regional Load Despatch Centre, the KSEB surrendered 1.13 crore units on November 1 alone. This is nearly 10 per cent of Kerala's average daily electricity consumption, which currently stands at around nine crore units.

The financial impact is significant. Electricity from central generating stations has a variable cost of around Rs 2 per unit. Based on this rate, surrendering one crore units would mean a loss of approximately Rs 2 crore for the board in a day.

The State Electricity Regulatory Commission estimates that the KSEB will not need to purchase additional electricity until February. This assessment also takes into account the expected availability of 540 MW from NTPC's Sinnar thermal power station.

The board's current requirement during peak hours (the periods when electricity consumption is at its highest) is also 500 MW to 1,000 MW lower than its earlier estimates.

Former KSEB chairman Dr M.G. Rajamanikyam had held discussions to secure 270 MW from the Sinnar plant in January and another 270 MW in March.

The KSEB has sent the power purchase agreement to NTPC, but the company has not signed it yet. If electricity from Sinnar does not become available, the power supply situation could change.

Power exchange prices fall sharply

Electricity prices on the power exchange have declined following a fall in consumption in North India after the Dussehra festival.

The highest demand in North India is currently recorded between 5 pm and 8 pm. This is reflected in the difference between daytime and evening electricity prices.

Between 8 am and 5 pm, electricity is available at rates ranging from 30 paise to Rs 2.10 per unit. The price rises to Rs 8–10 per unit between 5 pm and 8 pm, when demand peaks.

Between midnight and 5 am, electricity is available at Rs 3.50–4.38 per unit.

(This price difference is important because electricity costs vary significantly depending on the time of purchase. Daytime rates are currently much lower than evening peak-hour rates.)