The Kerala State Electricity Regulatory Commission (KSERC) has rejected the petition filed by the Cochin Port Authority seeking adoption of a tariff of ₹4.75 (~$0.0498)/kWh for power from a proposed 1.5 MW floating solar project at Willingdon Island, Kochi.

The Commission noted that the discovered tariff was significantly higher than recently approved solar tariffs, including tariffs for other floating solar projects.

The Commission also stated that Cochin Port Authority may meet any shortfall under the Harit Sagar Green Port Guidelines after accounting for the renewable purchase obligation (RPO) already met by the Kerala State Electricity Board (KSEB).

Background

Cochin Port Authority distributes electricity in the port areas of Willingdon Island, Vallarpadam, and Puthuvypeen special economic zones.

It stated that its electricity requirement is met by purchasing power from KSEB at the bulk supply tariff. During 2024-25, it purchased about 48.96 million units from KSEB.

The Cochin Port Authority submitted that, as a distribution licensee, it was required to comply with the RPO target and, as a major port, it also had to implement renewable energy projects to achieve 60% renewable energy consumption by 2030 under the Harit Sagar Green Port Guidelines.

The port first floated a tender in January last year. Two bids were received, but only one bidder qualified, prompting the tender committee to recommend re-inviting the tender to encourage wider participation. It floated a fresh tender in June last year. Six firms participated, and three qualified. Sunshell Power was declared the winner with a quoted tariff of ₹4.75 (~$0.0498)/kWh.

KSEB opposed the port’s plea, arguing that the discovered tariff was excessively high relative to prevailing market rates.

Commission’s Analysis

The Commission observed that the Cochin Port Authority proposed the floating solar project as part of renewable energy initiatives and to comply with the Harit Sagar Green Port Guidelines, which require major ports to meet 60% of electricity consumption from renewable sources.

However, the Commission clarified that the green energy obligations under the Ministry of Ports guidelines are distinct from renewable purchase obligations applicable to distribution licensees under the Electricity Act, 2003.

On tariffs, the Commission compared the ₹4.75 (~$0.0498)/kWh bid with other solar tariffs and found it to be much higher, so it was rejected. It also noted that the average market rate of electricity in the Green Day Ahead Market during 2025-26 was below ₹2.50 (~$0.0262)/kWh.

The Commission referred to the Supreme Court judgment, which stated that electricity regulators must reject bids if the tariffs are not market-aligned. In this case, the discovered tariff was about 60% higher than average market rates.

KSERC also noted that, under the Renewable Energy and Net Metering Regulations, a distribution licensee that purchases electricity in bulk from another licensee does not have a separate renewable purchase obligation if the seller licensee meets the obligation for the energy sold or if the buyer reimburses the seller for the approved additional cost of procuring renewable energy.

Since the Cochin Port Authority purchases its entire electricity requirement from KSEB which is pursuing a target of meeting 50% of electricity demand from renewable sources by 2030, the Commission said that the port authority would not be required to separately meet renewable energy requirements up to the percentage met by KSEB.

The Commission observed that the Cochin Port Authority could separately purchase up to 10% of its electricity requirement from KSEB, sourced from renewable sources, by paying the approved green tariff.

Recently, KSERC permitted KSEB to procure up to 250 MW of short-term power through exchange-based contingency mechanisms to manage the ongoing summer supply deficit.

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