KSEB seeks approval from KSERC to purchase 80 MW from Damodar Valley Corporation for a period of five years. | Photo credit: (File) KK Mustafah
The cancellation of long-term power supply tenders under the Center for Transparent Utilization and Allocation of Koyala in India (SHAKTI) policy has prompted the Kerala State Electricity Board (KSEB) to explore a mid-term power purchase agreement with the Damodar Valley Corporation (DVC).
KSEB has sought approval from the Kerala State Electricity Regulatory Commission (KSERC) to purchase 80 megawatts (MW) from DVC for a period of five years. The energy company plans to acquire 25 MW from DVC’s Koderma Thermal Power Plant (KTPS) and 55 MW from the Mejia Thermal Power Plant (MTPS).
In January this year, DVC, which comes under the Union Ministry of Power, offered KSEB an allocation of a total of 80 MW on a long-term basis. The DVC has offered rates that are “significantly more favorable than previous tender results”, KSEB said in a petition to be heard by the commission on March 26.
Apart from the expected surge in electricity demand, KSEB cited a number of reasons for its decision to go for the DVC proposal. The reason cited was a “severe unavailability crisis” of 465MW under disputed Design, Build, Finance, Own and Operate (DBFOO) contracts and the subsequent inability to bind electricity at reasonable rates.
Subsequently, KSEB decided to procure 500 MW of continuous power for 15 and 25 years respectively under the B(iii) and B(iv) components of the SHAKTI Coal Interconnection. However, in both cases, the unit rates at the opening of Request for Proposal (RfP) bids were on the higher side. The management of KSEB has therefore decided to cancel the tenders.
The current proposal to get power from DVC is deeply rooted in the “Resource Adequacy (Generation) Plan for Kerala (2025-26 to 2035-36)” prepared by the Central Electricity Authority (CEA), according to KSEB. The estimated average tariff for KTPS is ₹ 5.4 per unit and ₹ 5.5 per MTPS. KSEB is already using 100 MW from MTPS. The CEA report also identifies a thermal power shortfall of 112 MW to 400 MW in the coming years, KSEB noted.
Published – 22 March 2026 16:54 IST
