Kerala's Costly Power Miss: Snubbed Low-Cost Deal Fuels Current Crisis

Kerala is currently reeling from an acute power crisis with widespread night-time electricity cuts, a stark contrast to the comfortable supply enjoyed by neighboring states. This ongoing struggle comes with a painful revelation: Kerala's state electricity board shockingly passed on a low-cost, year-round electricity deal from THDC India Limited Tehri Pumped Storage Project in January 2025. This deal, offering 184.08 MW at approximately Rs 6 per unit, was swiftly snatched up by Gujarat, leaving Kerala to grapple with current shortages and soaring power purchase costs. The timing couldn't be worse for Kerala, as its daily power demand in September 2026 soared to 5,000 MW, while supply lagged at just 4,200 MW, leading to an 800 MW deficit. This heavy reliance on external power — Kerala generates only about 25% of its needs — forces the state to buy electricity through expensive short-term contracts, with current rates ranging from Rs 6.5 to an alarming Rs 12.5 per unit, far higher than the rejected THDC offer. Political mudslinging has intensified, with the current UDF government blaming the previous LDF administration for cancelling earlier long-term agreements for 465 MW at just Rs 4.29 per unit in 2023, exacerbating the current predicament. As the Kerala State Electricity Regulatory Commission grudgingly approves these high-cost short-term power purchases to bridge the immediate gap, the state faces continued financial strain and potential disruptions. The long-term solution remains elusive, especially with over 6,155 MW from 13 proposed pumped storage project in Kerala reportedly stalled for years. This persistent crisis highlights an urgent need for strategic planning, improved internal generation capacity, and a clear vision to prevent future energy blackouts and protect consumers from exorbitant electricity bills.