Why is Kerala buying costly power at night? Regulator questions KSEB strategy

Thiruvananthapuram: The Kerala State Electricity Board has come under sharp criticism from the Kerala Electricity Regulatory Commission over its continued dependence on expensive short-term electricity purchases and delays in implementing alternative energy storage projects.

The Commission reportedly stated that approval for future high-cost power purchases may not be granted unless KSEB actively pursues measures such as pumped storage and battery storage projects to improve power management.

According to the Commission, KSEB must submit detailed proposals regarding the implementation of these projects.

KSEB spent over ₹3,000 crore on costly electricity

In the financial year 2024-25, KSEB reportedly purchased electricity worth ₹12,930 crore.

Out of this amount, nearly ₹3,116 crore was spent on purchasing electricity through short-term contracts and power exchanges at significantly higher rates. This accounted for around 26 percent of the board’s total electricity purchase expenditure.

The report also stated that electricity worth ₹1,010 crore was purchased from the term-ahead market at an average rate of ₹9.15 per unit.

The Commission noted that KSEB continued depending on such costly markets during 2025-26 and 2026-27 as well.

Kerala lags behind in pumped storage projects

The Commission criticised KSEB for failing to advance pumped storage and battery storage projects despite growing electricity demand and rising costs.

Pumped storage projects allow excess electricity available during the daytime to be used for pumping water back into reservoirs, enabling electricity generation later during peak demand periods.

Battery storage systems are designed to store cheaper electricity, including solar power generated during the day, for use at night.

While the central government is actively promoting pumped storage projects across India, with 12 projects reportedly under construction, Kerala currently has no such project under implementation.

The Commission observed that although preliminary discussions on battery storage projects had begun, KSEB failed to complete the projects in time to benefit consumers during the summer season.

Questions raised over discrepancies in KSEB accounts

The Regulatory Commission also pointed out discrepancies in KSEB’s annual financial reports.

According to the findings, the board’s 13th annual report listed the total expenditure for 2022-23 at ₹22,336 crore with losses of ₹534 crore.

However, the 14th annual report reportedly revised the expenditure for the same period to ₹23,952 crore, showing an increase of more than ₹1,600 crore. The reported losses also rose sharply to ₹2,150 crore.

The Commission stated that KSEB failed to provide a satisfactory explanation for the significant differences in the figures presented before the regulator.