One of the major challenges confronting Kerala's new UDF government has been the inability of the Kerala State Electricity Board Ltd (KSEB) to ensure an uninterrupted power supply. The timing could not have been worse, as it has disrupted what should have been the government's honeymoon.

This stands in sharp contrast to the previous decade under the LDF government. Barring a few days towards the end of its tenure, Kerala largely escaped load shedding and unannounced power cuts. Whatever the reasons, KSEB also deserves credit for maintaining one of the country's lowest Aggregate Technical and Commercial (AT&C) losses at around six per cent — a remarkable achievement for a utility that is often criticised for its internal functioning and the sway of the unions.

The structural problem, however, is far deeper. Kerala imports nearly 75 per cent of its electricity requirement, making it one of the most power-deficient major States in India. Neighbouring Tamil Nadu and Karnataka generate more electricity than they consume (exceeding 100%). Kerala, on the other hand, has consistently resisted thermal power projects, ruled out nuclear power and even shut down diesel-based generating stations on environmental grounds. Since 2010, KSEB has added only about 275 MW of generation capacity.

However, significant capacity addition has come through rooftop solar installations under State programmes and, more recently, the PM Surya Ghar Yojana. While this has been a remarkable success, it has also exposed another weakness. Solar power is generated during the day when demand is relatively low, whereas Kerala's peak demand occurs between 6 pm­ and 11 pm. Without adequate battery or pumped-storage capacity, surplus daytime generation cannot be stored for evening consumption. The result is a daily shortfall of between 500 MW and 900 MW during peak hours.

This crisis highlights four major policy failures.

The first is the absence of long-term planning. The Electricity Act, 2003 transformed India's power sector by encouraging private investment in generation. Today, nearly 55 per cent of the country's electricity is produced by private generators. Kerala remains an exception. Concerns over land availability, population density and environmental impact have discouraged fresh investments in generation, and successive governments have failed to develop viable alternatives.

The second is KSEB's reluctance in recent years to secure long-term power purchase agreements (PPAs). More importantly, Kerala allowed a highly favourable 465 MW PPA signed in 2015 with Jhabua Power, Jindal Power and Jindal Thermal Power at ₹4.26 per unit to lapse after regulatory objections over procedural issues. The agreement, negotiated when the late Aryadan Mohammed was Power Minister and M Sivasankar was KSEB Chairman, could have insulated Kerala from today's volatile power market. Inability to cure procedural deviations in the tender collectively by the Government, KSEB and the regulator led to cancellation of the contract. And now the State is  purchasing electricity at much higher prices. Often, It finds that power too is unavailable when required.

The third issue concerns the role of the Kerala State Electricity Regulatory Commission (KSERC). In several recent cases, the regulator appears to have moved beyond regulatory oversight into operational decision-making. Consumer protection is undoubtedly its statutory responsibility. But procurement decisions in electricity markets often require speed and commercial judgment. Regulators should examine such decisions rigorously after the event. No regulator should descend to becoming concurrent managers of operations. And even though not explicitly stated in the 2003 Act, regulators have a "development" objective which should not be forgotten. KSEB itself has estimated that cancellation of the 465 MW PPA, has cost it over ₹2,100 crore. Who is accountable for this actual loss? The question remains unanswered.

Finally, Kerala must decide what forms of electricity generation and storage it is willing to accept. The State government lacks the financial capacity to undertake large investments on its own. Public-private partnerships in renewable energy, grid-scale battery storage, pumped-storage projects and even emerging technologies such as Small Modular Reactors (approved in the last Union Budget) deserve objective evaluation rather than ideological rejection. If safety is the concern, it makes little difference whether a nuclear plant is located in Kudankulam, just across Kerala's border or within its own boundaries.

Perhaps the most revealing aspect of the present crisis is that the Chairman of KSEB has had to bemoan higher electricity consumption. In a developing economy, rising power consumption is normally a sign of growing incomes, expanding businesses and improving living standards. That Kerala is forced to regard higher electricity consumption as a problem is not merely an indictment of its electricity sector. It is a reminder that the State's infrastructure planning in the power sector has failed to keep pace with its development aspirations.