In the six days from April 20 to 25, no new power consumption records were set. Daily power consumption remained below the 117.16 million units set on April 18, mostly keeping to 110-112 MUs.

However, something unprecedented, and far more dangerous, happened. From April 22, Kerala started to suffer a power shortage at maximum demand.

It was on April 21 that the swap deals for 200 MW each from Madhya Pradesh and Punjab had expired; the arrangement was to buy power from these states during summer and return it during monsoon. Surprisingly, KSEB Limited has not entered into swap deals with other states, a shortcoming that was pointed out by the Kerala State Electricity Regulatory Commission (KSERC) on April 24.

In short, on April 21, 400 MW had stopped reaching Kerala.

On April 22, the shortage was 65 MW. On April 23, when the maximum demand of the day touched a record high of 6135 MW at 10.30 pm, the shortage was 292 MW. On April 24, when the maximum demand was 5737 MW at 9.38 pm, the shortage was 101 MW. On April 25, when the maximum demand for the day was 5795 MW at 10.29 pm, the deficit soared to 438 MW.

Kerala has not experienced such shortage in the last three years.

To manage such peak demand shortage and also to maintain grid stability during peak hours (7 pm to 11 pm) KSEB Limited has relied on unannounced load-shedding of 10-15 minutes across Kerala.

This summer, the average daily demand in Kerala is 5800 MW, 800-1000 MW higher than last summer.

Kerala's hydro capacity is 2134 MW but with water levels in its reservoirs plummeting to just 30 per cent, KSEB Limited has refrained from overworking its hydel stations.

Therefore, the average internal generation this summer - from hydro, wind and solar - is 1200 MW.

The remaining 4600 MW, nearly 80 per cent of Kerala's daily requirement, is sourced from outside. Of this, some 3000-odd MW is secured from 15 central generating stations under long-term agreements at reasonable costs that range from ₹2 (Talcher Super Thermal Power Station, Odisha) to ₹4.50 per unit (Kudankulam Nuclear Power Plant, Tamil Nadu).

Ideally, at least half the deficit of 1400-1500 MW should have been covered through long- and medium-term deals with private power producers. It is here that the KSEB has slipped.

In December 2014, during the UDF period, the power utility had entered into long-term power sale agreements for 865 MW through competitive bidding. The contracted power was to flow into Kerala uninterrupted for 25 years at ₹4.26 per unit. However, deals for 465 MW of this were cancelled by Kerala State Electricity Regulatory Commission in 2023 citing technical errors.

The subsequent attempts to secure power through medium-term agreements with private producers failed because of the high rates quoted.

For instance in December 2024, KSEB Limited invited tenders for the long-term procurement of 500 MW round-the-clock power for 15 years. Though there were six bidders at the RFQ (request for quotation) stage, only two bidders had participated in the RFP (request for proposal) stage.

The RFP bids were opened on May 13, 2025, and the rates were assessed to be higher than the prevailing market rates, and even the rates quoted in tenders floated by other utilities across India. The L1 bidder, the lowest bidder, Sarda Energy & Minerals Ltd was persuaded to reduce its ₹6.39 per unit quote. Its final quote of ₹6.25 per unit also was considered higher, and the tender process had to be annulled.

Another tender was invited for 500 MW round-the-clock power on June 19, 2025. There were four bidders and the lowest bid was Jindal Power Limited's ₹5.80 per unit. After negotiations, Jindal brought it down by only four paise to ₹5.76 per unit. Once again, forcing KSEB Limited to invalidate the tender.

Nonetheless, KSEB Limited has found the quote of Damodar Valley Corporation Limited (DVC) beneficial. The KSEB wants to procure 25 MW from the DVC's Koderma Thermal Power Station at ₹5.40 per unit and 55 MW from its Mejia Thermal Power Station at ₹5.502 per unit. The Electricity Regulatory Commission is yet to give its nod.

With no stable cost-effective deals in place, a desperate KSEB is now dependent on costly short-term markets. These days it sources 850-950 MW from Temporary General Network Access (T-GNA), a short-term transmission access mechanism allowed for short periods ranging from 15 minutes to up to 11 months. Problem is, the cost is high, at least 10 per cent higher than when power is accessed through general access network (GNA).

From Indian Energy Exchange's Real Time Market and Day Ahead Market, KSEB Limited accesses some 80-odd MW. Here too, the cost is prohibitively high, upwards of ₹10 per unit.

So to keep costs down and to prepare for the future, the KSEB has sought the nod of the Electricity Regulatory Commission to procure from the term-ahead market (TAM) platform, which allows utilities like the KSEB to buy electricity 90 days in advance.

On April 24, sceptical about the costs, the Commission gave its thumbs down and asked the KSEB to explore other avenues to shore up its energy requirements.

Official load shedding and tariff increase seem inevitable.