A recent study conducted by Climate Risk Horizons (CRH) reveals that Kerala has the potential to save over Rs 9,000 crore in a span of five years by replacing coal power purchases with renewable energy (RE) contracts by 2040. This analysis aligns with Chief Minister Pinarayi Vijayan’s recent announcement that the state aims to achieve 100% renewable energy within the next 17 years.
The study, unveiled at the ‘Roundtable of Energy Transition in Kerala’s Electricity Sector’ event held in Thiruvananthapuram, suggests that if Kerala replaces its scheduled coal power purchases from central sector plants with new renewable energy sources at an average tariff of Rs 3/kWh, the state could save approximately Rs 969 crore annually. The report proposes a phased transition plan that prioritizes phasing out the costliest central sector power contracts, resulting in savings of Rs 4,505 crore by discontinuing 1,560 MW of coal power by 2026-27.
While phasing out coal power purchases from the private sector may be more challenging, the report outlines a pathway to gradually replace all coal power contracts with renewable energy, potentially saving the state an estimated Rs 1,843 crore annually through reduced electricity costs.
Power Secretary K R Jyothilal acknowledges the report’s findings and emphasizes the importance of transitioning Kerala from dependence on other states for power to self-sufficiency. He envisions Kerala becoming India’s green energy export hub and highlights the state’s capacity to generate up to 9 GW of electricity through solar and wind power, waste-to-energy conversion, and hydrogen exportation.
The report also highlights Kerala’s untapped renewable energy potential despite land constraints. It suggests that medium-scale floating solar projects could be a viable alternative to large-scale solar plants, with the state capable of installing over 8 GW of floating solar alone on large water bodies, meeting 70% of annual requirements at a lower tariff than current coal generators.
Currently, Kerala relies on coal plants in Tamil Nadu, Andhra Pradesh, and Odisha for more than 63% of its electricity, resulting in a nearly 10% increase in per unit cost of energy from coal contracts this financial year, amounting to Rs 7,370 crore.
Ashish Fernandes, CEO of Climate Risk Horizons, emphasizes the achievability of the chief minister’s goal of 100% renewable energy and highlights the financial and economic benefits for the state. He also points out that phasing out coal contracts would save the state significant amounts of money in the medium term while creating job opportunities within Kerala’s renewable energy industry.
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