Kerala State Electricity Board exploring possibility of developing a dedicated marketing wing

The Kerala State Electricity Board (KSEB) is exploring the possibility of creating a dedicated marketing division in a bid to ensure a more efficient and profitable participation in the national-level energy market.

Improving its income aside, an in-house marketing wing will also help it to explore the market for surplus energy arising from the increased solar power generation in Kerala, the State power utility feels.

Rising expenditure on power purchases, the annual growth of Kerala’s solar power capacity by about 35 megawatts (MW), and the dependence, even if infrequently, on brokers for power ‘swap’ arrangements have prompted it to consider forming a marketing wing, the power utility said in a note.

Market studies

It is expected that a dedicated arrangement would allow the KSEB to carry out market studies on power availability and demand in different States and devise strategies accordingly, a KSEB official said.

According to a recent presentation made by the KSEB, its annual power purchase expenditure has risen from ₹7,393 crore in 2016-17 to ₹12,983 crore in 2023-24.

The average per-unit price of electricity has gone up from ₹3.88 in 2016 to ₹5.08 at present. In fact, the KSEB spends close to 60% of its income on power purchases.

Solar capacity up

At the same time, the solar power capacity of the State is growing by 35 MW annually, resulting in surplus power availability during the daytime when demand is relatively low. There is also a need to explore the market for this surplus energy, according to the KSEB.

Kerala’s internal generation, mostly hydropower, accounts for roughly 30% of the demand. Soaring demand during Kerala’s hot summers have in recent years forced the KSEB to plan power purchase deals and ‘swap’ arrangements well ahead with utilities and generators elsewhere in the country.

Talks initiated

For developing its in-house marketing wing, the KSEB had held discussions with NTPC Vidyut Vyapar Nigam Limited (NVVNL). But the NTPC subsidiary had conveyed its limitations in this regard, according to the KSEB. The KSEB is now in talks with other government-allied agencies for its new initiative.