Kerala Approves Tariffs for 125 MW Battery Storage Project to Boost Renewable Energy Integration – EQ
In Short : The Kerala State Electricity Regulatory Commission has approved tariffs for a 125 MW/500 MWh battery energy storage project across four substations—Sreekantapuram, Mulleria, Areacode, and Pothencode. Tariffs range from ₹4.34 lakh to ₹4.57 lakh per MW per month, with a ₹0.07/kWh trading margin. Supported by Viability Gap Funding, the project aims to strengthen grid stability and renewable energy integration.
In Detail : The Kerala State Electricity Regulatory Commission (KSERC) has cleared the way for the implementation of a major battery energy storage system (BESS) project in the state. The regulator has approved tariffs for a 125 MW/500 MWh grid-scale storage capacity to be set up across four substations.
These substations—Sreekantapuram, Mulleria, Areacode, and Pothencode—will each host part of the storage capacity, ensuring energy backup and grid stability in key regions. The project is expected to play a critical role in integrating higher shares of renewable energy into Kerala’s power system.
The approved tariffs range from ₹4.34 lakh to ₹4.57 lakh per MW per month, depending on the substation location. This variation reflects site-specific conditions and associated project costs. The tariff approval provides revenue certainty to developers, paving the way for timely execution.
In addition to the fixed tariff component, a trading margin of ₹0.07 per kWh has been set. This margin will apply to electricity transactions associated with the storage facilities, allowing operational flexibility for energy arbitrage and grid support services.
The project is being supported through Viability Gap Funding (VGF), which will help offset initial capital costs and make the project financially feasible. This aligns with the central and state governments’ push for battery storage as a key enabler of India’s clean energy transition.
BESS projects like this one allow excess renewable power, such as solar or wind, to be stored during periods of low demand and dispatched when demand peaks. This helps balance the grid, reduce curtailment of renewable generation, and improve reliability.
The KSERC’s approval also signifies confidence in large-scale storage as a commercially viable solution for India’s future power mix. It sets a precedent for similar projects across other states where renewable penetration is increasing rapidly.
With execution now in sight, the project is expected to create local jobs during construction and contribute to Kerala’s broader climate and energy security goals. It will also serve as a model for other utilities exploring advanced storage solutions.
By combining regulatory backing, financial support, and modern technology, Kerala is positioning itself at the forefront of India’s energy storage revolution, ensuring a stable, flexible, and greener electricity supply for years to come.
