The Kerala State Electricity Regulatory Commission (KSERC) has firmly rejected a request from Cochin International Airport Ltd (CIAL) for a refund of grid support and banking charges it paid to the Kerala State Electricity Board (KSEB). The charges are related to banking the surplus solar power generated by CIAL's large-scale captive plant.
The Heart of the Dispute: 2020 vs. 2015 Regulations
Cochin International Airport, which operates a substantial 38.864 MWp captive solar power plant on its premises, had challenged KSEB's demand for these fees. CIAL argued that the utility's decision to levy charges as per the renewable energy and net metering regulations published in 2020 was unacceptable. The airport authority contended that the 2015 regulations, which it believes should apply in its case, do not permit KSEB to impose such grid support and banking charges.
However, the electricity regulator dismissed CIAL's claim. KSERC provided a detailed technical and economic rationale for its decision, highlighting the operational realities and costs borne by the state grid.
Why KSERC Sided with KSEB
The commission pointed out a critical mismatch in capacity. CIAL's connected load with KSEB is only 9 MVA, while its total installed solar capacity is approximately 40 MW. This means during daytime, the airport can directly consume only a fraction of the solar power it generates. The remaining 31 MW must be injected into the state grid.
KSERC explained that KSEB is obligated to absorb this excess energy, which forces it to back down or adjust its existing power purchase agreements, incurring fixed costs in the process. To return this banked energy to CIAL during off-peak hours (like at night), KSEB must either purchase additional power or generate extra energy from its own stations. This process involves further costs like transmission charges, wheeling charges, and associated losses.
The commission emphatically noted that KSEB gains no advantage from the surplus energy injected by CIAL or similar consumers. It stated that this additional financial liability ultimately falls on ordinary electricity consumers across Kerala.
The Solar Glut and Future Implications
KSERC also addressed a broader market trend influencing its decision. It observed that at present, daytime energy rates are around 88% of the night off-peak hours. With the large-scale integration of solar power into the national grid during the day, this trend is likely to continue. KSEB has to absorb cheap solar power during the day and return costlier power during off-peak hours.
"Considering the higher energy price of off-peak hours compared to daytime price, the commission cannot allow the request of CIAL and other stakeholders," KSERC said in its order.
Looking ahead, the regulatory body advised CIAL to explore the option of setting up a Battery Energy Storage System (BESS) as an alternative mechanism to store its solar power. This would allow the airport to use more of its own generation directly, reducing its dependence on banking power with the state grid and mitigating such charges in the future.
