The Kerala State Electricity Board (KSEB) has proposed a green energy tariff of Rs 2.543 per kWh for customers who want to switch to green energy. The proposed tariff that has been submitted to the Kerala State Electricity Regulatory Commission (KSERC) for approval, reflects the additional cost that KSEB will incur on additional renewable energy procurement over its average power purchase cost, as well as charges to compensate the licensee for the intermittent nature of such energy.
The marginal cost of purchasing additional renewable energy to meet the green tariff requirement was determined by KSEB using the average cost of renewable energy, which is Rs 3 per kWh. However, more renewable energy than this is required to meet consumer demand. Therefore, KSEB must buy more renewable energy from other sources. Because the commission has yet to approve the variable cost of unapproved contracts, the variable cost of these sources is assessed by taking the weighted average variable cost of authorised contracts. Non-renewable sources have an average variable cost of Rs 2.19 per kWh. As a result, the marginal cost of purchasing additional renewable energy to meet the green tariff requirement is Rs 0.81 per kWh.
KSEB calculated the banking charges for renewable energy by comparing the Green Day Ahead Market (GDAM) buying rate during evening or night hours to the sale price during the day. The market clearing price of GDAM for 2022-23, as well as the clearing price of the GDAM summary rate have been taken into account. As a result, the banking cost is determined by assuming the additional renewable energy requirement as 100 MW at a capacity utilisation factor (CUF) of 21 per cent. The banking charge per unit is determined to be Rs 1.523 per kWh.
