Kerala faces November power shortfall as supply deal expires

Kerala faces the prospect of renewed power restrictions from November 1 as its temporary electricity supply arrangement with Himachal Pradesh expires on October 31, with the state government yet to approve a replacement agreement.

The Kerala State Electricity Board (KSEB) is seeking urgent clearance to continue purchasing electricity from Himachal Pradesh during peak consumption hours. However, disagreements over pricing, regulatory requirements and financial guarantees have prevented the proposed arrangement from being finalised.

The state could face an evening power deficit estimated at between 600 MW and 900 MW, depending on demand and available supplies. Officials have not announced a definitive schedule for load shedding, and restrictions would depend on whether additional electricity can be secured.

Himachal Pradesh has offered electricity at Rs 14.50 per unit, substantially above the Rs 10 ceiling ordinarily applicable to purchases under the state electricity regulator’s framework. KSEB has attempted to negotiate a lower price, reportedly between Rs 12 and Rs 13 per unit, without securing a final agreement.

The proposed extension would maintain supplies until May 2027, covering the months when Kerala traditionally faces pressure on electricity availability. However, the purchase requires government approval before KSEB can proceed with the necessary regulatory formalities.

The Himachal Pradesh supplier is also seeking financial assurances and regulatory clearance before committing to an extended arrangement. These conditions have complicated negotiations at a time when competing buyers are seeking additional electricity.

Chief Minister V D Satheesan and Electricity Minister Sunny Joseph have discussed the procurement proposal with senior KSEB officials. Nevertheless, the government has not cleared the proposed purchase at the quoted tariff, reflecting concerns about its financial implications.

Purchasing electricity at elevated prices would increase KSEB’s expenditure and could eventually place pressure on consumer tariffs. The utility must therefore balance the immediate requirement to maintain uninterrupted supply against the longer-term financial burden of expensive procurement.

The uncertainty has become particularly significant because Kerala depends heavily on electricity purchased from outside the state to supplement domestic generation. Hydroelectric production remains vulnerable to rainfall fluctuations, while evening consumption frequently exceeds available contracted supplies.

Electricity Minister Sunny Joseph informed the Legislative Assembly that inadequate rainfall and the El Niño phenomenon had contributed to the supply difficulties. Rainfall across Kerala stood at 72 per cent of the long-period average, while Idukki recorded a deficiency of 56 per cent.

The reduced rainfall affected reservoirs supporting hydroelectric generation, limiting the flexibility available to KSEB during periods of high consumption. Although reservoir storage has improved, the additional water has not eliminated concerns about meeting peak demand.

Demand figures presented in the Assembly underline the challenge. Unrestricted peak demand increased by 28 per cent year-on-year to 5,338 MW in July and by 26 per cent to 5,639 MW in September.

Joseph attributed the growth partly to increased use of air conditioners, electric vehicles and induction cookers. Limited availability of short-term electricity and constraints affecting coal-based generation have also complicated procurement.

The temporary Himachal Pradesh arrangement helped Kerala avoid the widespread evening restrictions experienced during September. Those curbs had affected households and businesses, prompting complaints about interruptions and uncertainty over supply schedules.

KSEB subsequently secured additional electricity through power exchanges, interstate arrangements and central allocations. The minister told the Assembly that the utility contracted 292 MW through exchanges during September and received another 150 MW from the Centre.

Further allocations include 404 MW from central generating stations, with Kerala seeking an extension of that assistance until May. Wind power purchases and other contracted supplies provide additional support, although availability varies across different periods.

The utility has also explored competitive procurement, but efforts to secure sufficient electricity at affordable rates have encountered difficulties. Prices during peak hours remain an important obstacle because suppliers can command higher returns when demand exceeds readily available generation.

Another complication concerns competing demand for Himachal Pradesh’s surplus electricity. Rajasthan has been identified as a potential purchaser at a higher tariff, raising uncertainty over the quantity that could remain available for Kerala.

Consumption figures indicate that pressure is already returning as rainfall subsides. Peak demand reached 4,994 MW on Tuesday, while total daily electricity consumption stood at approximately 91.87 million units.

Reservoir storage, meanwhile, improved from approximately 61 per cent to 64 per cent, providing some operational flexibility for hydroelectric generation.