Thiruvananthapuram: A recent analysis by a thinktank found Kerala can save over Rs 9,000 crore in five years if the state replaces coal power purchases with renewable energy (RE) contracts by 2040.

The finding by Climate Risk Horizons (CRH) comes just months after chief minister Pinarayi Vijayan announced that the state will aim for 100 per cent renewable energy over the next 17 years.

The analysis was released on Friday at an event titled the 'Roundtable of Energy Transition in Kerala's Electricity Sector', held in Thiruvananthapuram. The report stated that if Kerala were to replace its scheduled purchases of coal power from central sector plants with new renewable energy at an average tariff of Rs 3/kWh, the state would save approximately Rs 969 crore per year. The report also suggested a transition pathway that sees the most expensive central sector power contracts phased out first, saving the state Rs 4,505 crore through the phase-out of 1,560 MW of coal power by 2026-27.

Coal power purchases from the private sector can also be phased out at a net saving, though unwinding these agreements may be more difficult. In total, a phased energy transition plan to replace all coal power contracts with renewable energy could save the state an estimated Rs 1,843 crore annually by way of lower electricity costs, according to the report.

Acknowledging the findings of the report, power secretary K R Jyothilal stated: “Kerala imports close to 70% of its power, depending on other states for daily needs. It is now time to move from a state of dependence to independence. We have immense capacity to generate green power within the state and have the potential to become India’s green energy exporting hub. Kerala is a small state and our vision should reflect that. The transition journey should begin from the local governing bodies. Through mounted solar and reservoirs, we can generate up to 9 GW of electricity. We are also set for harnessing wind power in the state and evacuating power, converting waste to energy and exporting hydrogen both nationally and internationally.”

The report has found that despite its land constraints, Kerala can generate significant quantities of renewable electricity within the state itself, boosting the state’s energy security. “Kerala still has significant untapped RE potential, with medium-scale floating solar in particular offering an attractive alternative to mega solar plants. Our calculations suggest that the state could install over 8 GW of floating solar alone on large water bodies, which would be sufficient to meet 70% of annual requirements, at a lower tariff than KSEB is currently paying coal generators,” said the report's co-author Harshit Sharma of Climate Risk Horizons.

Kerala currently does not have any coal plants within its geographical limits, but relies on plants in Tamil Nadu, Andhra Pradesh and Odisha for over 63% of its electricity. There will be a nearly 10% increase in Kerala’s per unit cost of energy from coal contracts during this financial year, costing the state a total of Rs 7,370 crore.

“The chief minister’s target of 100% RE is achievable and can benefit the state financially and economically. But it will not be achieved if we do not address Kerala’s large and growing purchases of coal power from other states. Phasing out these contracts will save the state thousands of crores in the medium term, and create thousands of jobs within Kerala’s renewable energy industry,” said Ashish Fernandes, CEO of Climate Risk Horizons.