Kerala State Electricity Board Ltd. (KSEBL) sought approval from the Kerala State Electricity Regulatory Commission (KSERC) for a power purchase agreement (PPA) with NHPC Ltd. to procure electricity from a 50 MW floating solar power plant in West Kallada, Kollam District. This petition, presented under KSERC’s tariff determination regulations and Section 86 of the Electricity Act 2003, emphasized Kerala’s commitment to renewable energy targets.
The 50 MW floating solar plant is a collaboration involving NHPC, a Navratna enterprise, and West Kallada Non-Conventional Energy Promoters Pvt. Ltd. (WKNCEPPL), which represents the local landowners. Around 300 acres of water-logged, uncultivated paddy fields in West Kallada were earmarked for the project, with land leases and agreements facilitating its development. NHPC agreed to share 3% of the revenue generated with WKNCEPPL as lease compensation for landowners.
Development of the project received approval under the Ministry of New and Renewable Energy’s Solar Park Scheme, with central financial assistance capped at ₹20 lakh per MW or 30% of the park cost. The Kerala government also sanctioned viability gap funding (VGF) of ₹11.83 crore to further support the initiative.
The project has faced several challenges, including tender cancellations and tariff negotiations. NHPC initially proposed a tariff of ₹3.89 per unit, which was later reduced to ₹3.04 per unit following negotiations. This tariff includes all taxes, levies, and duties and aligns with or falls below rates approved by national and regional regulators for similar projects. For example, the NTPC Kayamkulam floating solar project had a ceiling rate of ₹3.16 per unit.
The approved tariff structure also contains safeguards and incentives. If the plant fails to meet a minimum capacity utilization factor (CUF) of 19% due to developer-specific issues, NHPC will face penalties. Conversely, KSEBL agreed to purchase any generation exceeding 25% CUF at 75% of the agreed tariff, ensuring a fair distribution of risk and reward. These terms aim to balance economic viability for NHPC with affordable power procurement for Kerala.
The project’s PPA also incorporated revisions based on stakeholder feedback. Notably, the termination notice period was extended from 30 to 90 days, providing additional time to address potential contractual issues. KSERC approved this modification, emphasizing smoother transitions and fostering cooperation between the involved parties.
NHPC has already mobilized resources to expedite the project. Engineering, procurement, and construction (EPC) contracts, valued at ₹259.72 crore, have been awarded to Apollo Green Energy Ltd., with work expected to be completed within 18 months. Surveys, site preparation, and engineering designs are underway, ensuring compliance with the scheduled commissioning date. The power generated will connect to Kerala’s grid through the Kundara-Chavara feeder.
KSERC concluded its deliberations by approving the PPA with a ceiling tariff of ₹3.04 per unit or the rate determined by the Central Electricity Regulatory Commission, whichever is lower. The commission emphasized the project’s importance for Kerala’s renewable energy goals, reducing dependence on external power sources and strengthening internal generation capabilities. This development aligns with Kerala’s ambition to achieve 100% renewable energy by 2040 and carbon neutrality by 2050.
