The necessity for power curbs has dried up with power consumption in Kerala dropping to normal levels in the first week of July. Nonetheless, the distress buying of power at exorbitant costs by KSEB Limited during summer months will inevitably inflate monthly power bills.
With the southwest monsoon becoming active across Kerala after a lull, average daily consumption in Kerala in the last week has settled down to 80 million units, similar to the usage last July.
In the last three months, power use in Kerala can be seen moving down an incline. In April, at the peak of summer, evening peak hour demand touched a record 6033 MW (April 27). In May, the highest daily demand was 5684 MW (May 2). And in June, the highest peak hour demand was 4969 (June 2). In July, the highest recorded till now is 4388 MW, on July 3. At least for now, a power crisis has been averted.
The El Nino-induced heat wave conditions had not only pushed up daily power use but also reduced the availability of power in the country. And the scarce power available in the energy market was wildly high-priced (over ₹12 a unit). These combination of factors had forced KSEB to impose evening peak-hour power restrictions from the middle of June.
In fact, KSEB was caught off guard. It had estimated an average daily demand of 4100 MW during 2026 summer. As it turned out, the average demand shot up way beyond its calculations to 5000 MW; on many days in April it had crossed 6000 MW.
KSEB can just about manage to provide slightly over 4000 MW daily: 1700 MW from domestic production (mainly from hydel stations), 1701 MW from central generating stations, and 612 MW from long-term power purchase agreements. Meaning, KSEB was short of 1000-2000MW during peak summer days.
A part of this shortage was managed by entering into ‘swap deals’ with states in the north and west that had spare power during Kerala’s summer. From June 16, KSEB has started to return the borrowed power. KSEB has to generate 6.58 million units daily for this purpose alone, and this repayment will extend till September. Kerala’s average daily consumption is 80 MU.
During the time of acute shortage, KSEB had attempted and failed to procure power through the DEEP (Discovery of Efficient Electricity Price) Portal.
Finally, on June 29, when power availability improved across the country, Kerala State Electricity Regulatory Commission allowed KSEB to procure short-term power through the DEEP Portal till December 31 this year on the basis of a tender it had floated on May 7.
However, the KSERC noted that the cost of purchase was “excessive”. The total financial commitment involved is ₹282.50 crore for the procurement of 308.43 million units at an average cost of ₹9.16 per unit. The average rate of power purchase the KSERC had approved is only ₹4.64 per unit.
The excessive cost at which short-term power is now being purchased will eventually be passed on to consumers through higher tariffs.
