What the source reports
Telangana has received in-principle approval from the Telangana Electricity Regulatory Commission (TGERC) for procuring 7,300 MW of renewable energy and 8,000 MWh of energy storage through its state distribution companies, Telangana State Southern Power Distribution Company Limited (TGSPDCL) and Telangana State Northern Power Distribution Company Limited (TGNPDCL). The proposed procurement includes long-term power supply agreements spanning 15 to 25 years and is aimed at meeting rising electricity demand, strengthening energy security and supporting renewable energy targets.
The regulatory approval follows a petition filed by the distribution companies seeking to secure additional power supply to meet Telangana’s future electricity requirements.
According to the Central Electricity Authority’s (CEA) Resource Adequacy Plan, Telangana’s annual energy requirement is projected to increase from 1,08,125 million units (MU) in FY 2026-27 to 1,77,219 MU by FY 2035-36. Peak electricity demand is also expected to rise by approximately 49.4% over the same period.
The DISCOMs are also preparing for the expiry of several existing power purchase agreements (PPAs), which could create gaps in energy availability and peak power supply. Additionally, meeting the Ministry of Power’s increasing Renewable Consumption Obligation (RCO) targets has become a priority to avoid regulatory and financial penalties.
The approved procurement comprises four major renewable energy components, combining standalone wind, solar with battery storage, round-the-clock renewable power and firm and dispatchable renewable energy.
The first component involves procuring 800 MW of standalone wind power under a 25-year power supply agreement. The capacity is expected to complement solar generation and diversify Telangana’s renewable energy portfolio.
The second component includes 3,000 MW of solar power integrated with a 6,000 MWh Battery Energy Storage System (BESS), configured at 1,000 MW for six hours.
Under a 25-year agreement, the storage system will enable electricity generated during periods of high solar availability to be stored and supplied during evening peak demand.
The procurement also includes 2,000 MW of Renewable Energy Round-the-Clock (RE-RTC) power under a 25-year agreement.
The arrangement is intended to provide a more consistent renewable electricity supply and support the state’s electricity requirements across different periods of the day.
The fourth component covers 2,000 MWh of Firm and Dispatchable Renewable Energy (FDRE), configured at 500 MW for four hours, under a 15-year agreement.
The FDRE capacity is expected to help address peak electricity demand by providing dispatchable renewable power during specified periods.
During public consultations, consumer groups and industry stakeholders raised concerns regarding procurement procedures, demand projections and the potential impact of long-term power agreements on electricity tariffs.
Participants also questioned the initiation of tendering activities before obtaining formal regulatory approval and called for greater opportunities for distributed renewable energy projects and local micro, small and medium enterprises (MSMEs).
In response, TGERC directed the distribution companies to obtain prior approval from the Commission before initiating bidding for future long-term or medium-term power procurement.
The Commission also clarified that DISCOMs can participate in competitive procurement processes conducted through the Solar Energy Corporation of India (SECI) or undertake state-level tendering.
The procurement route should be selected based on the most cost-effective landed tariff at the Telangana periphery.
The approved procurement plan is expected to strengthen Telangana’s energy security, diversify its electricity supply and reduce dependence on conventional power sources while supporting the state’s renewable energy obligations.
