Andhra Pradesh to procure 1,600 MW of thermal power to meet rising electricity demand

Andhra Pradesh will procure 1,600 MW of coal-based thermal power after receiving in-principle approval from APERC. The first phase of the State's long-term capacity addition programme aims to meet rising electricity demand and strengthen energy security through competitive bidding.

Amaravati: Andhra Pradesh will procure 1,600 MW of coal-based thermal power to meet the State’s rising electricity demand and strengthen long-term energy security.

The Andhra Pradesh Electricity Regulatory Commission has granted in-principle approval to the State’s power distribution companies to initiate a competitive bidding process for the procurement.

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The power will be procured through Tariff-Based Competitive Bidding under Section 63 of the Electricity Act, 2003, using the Design, Build, Finance, Own and Operate model, said an official release on Friday.

The bidding process will be based on the standard Request for Qualification, Request for Proposal and Power Supply Agreement documents notified by the Union Ministry of Power.

The proposed procurement represents a significant opportunity for power developers seeking long-term supply contracts in Andhra Pradesh, where electricity consumption and peak demand are projected to increase substantially over the coming decade.

The 1,600 MW procurement forms the first phase of Andhra Pradesh’s long-term thermal capacity addition programme.

The Central Electricity Authority’s Resource Adequacy Plan for Andhra Pradesh has recommended the phased addition of approximately 5,588 MW of coal-based thermal generation capacity by FY 2035-36.

Of this, 1,600 MW is proposed to be procured in the first phase to address the State’s projected increase in electricity demand and peak load.

The move comes as Andhra Pradesh expands industrial activity, urban infrastructure and electricity-intensive investments across sectors.

The planned thermal capacity is expected to provide firm, dispatchable power that can support the grid during periods of high demand and lower renewable-energy generation.

It will also complement Andhra Pradesh’s growing renewable-energy portfolio by ensuring reliable electricity availability during evening peaks, seasonal fluctuations and periods when wind and solar generation are unavailable, said the release.

The regulator has also asked the distribution companies to ensure that the proposed capacity is preferably connected to the Andhra Pradesh State Transmission Network.

According to the Commission, this could optimise the utilisation of the State’s transmission infrastructure and reduce the risks and delays associated with obtaining connectivity through the Inter-State Transmission System.

However, projects connected through the inter-State network may be preferred where the landed cost of power at the Andhra Pradesh boundary is lower than the cost of generation connected to the State network.