Power procurement reforms slash AP’s short-term purchase cost by 70%

Amaravati: Andhra Pradesh has sharply cut its power procurement burden through market-based purchasing and dispatch reforms, with the average monthly cost of short-term power falling from Rs 641.5 crore during 2022–24 to Rs 194 crore in 2024–26.

The reduction was highlighted by Energy Special Chief Secretary K Vijayanand at the second day of the Collectors’ Conference chaired by Chief Minister N Chandrababu Naidu on Friday. The average power purchase price also declined from Rs 7.78 to Rs 5.15 per unit.

Further savings through Market-Based Economic Dispatch (MBED), Day-Ahead Market (DAM), Real-Time Market (RTM) and dispatch optimisation brought the procurement cost down from Rs 5.20 to Rs 4.97 per unit during April-July 2026, a 23-paise reduction.A

The government has maintained that these savings have not been passed on to consumers through tariff increases. Free power continues for 20.78 lakh agricultural consumers, while 22 lakh SC/ST and weaker-section families receive up to 200 units free electricity a month. Aquaculture receives a Rs 1,067-crore subsidy through concessional tariffs.

With electricity demand projected to touch 1.8 lakh MU by 2035, the State has set targets of 78.5 GW solar, 35 GW wind, 22 GW pumped storage and 25 GWh battery storage. The plan envisages Rs 10 lakh crore investment and 7.5 lakh jobs.

A Rs 21,838-crore Green Energy Corridor-III proposal is aimed at evacuating 18.4 GW of renewable power through 7,872 ckm of transmission lines, 9,500 MVA capacity and five new 400/220 kV substations.

Under PM-KUSUM, approval has been secured for 2,93,587 solar pumps, with civil works started for 196 plants. PM-Surya Ghar has delivered 3,32,043 installations totalling 664.09 MW for SC/ST consumers.

The State is also targeting 201 MW solar capacity on government buildings, including 46.72 MW rooftop systems across 2,932 buildings. AP is moving to operationalise 225 MW/450 MWh battery storage by January 2027 and another 150 MW/300 MWh by August 2027. APTRANSCO’s Digital Twin technology across 380 substations has already saved 123 MU annually and generated about Rs 6 crore additional revenue.

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The Hans India