TN to spend Rs 25,100 crore on power purchase to meet rising demand

Chennai, Nov 12 (IANS) With the state’s daily electricity demand averaging 16,000 megawatts (MW), Tamil Nadu is gearing up for a massive power procurement exercise worth over Rs 25,100 crore over the next five years to ensure uninterrupted supply during both regular and peak hours.

According to the Tamil Nadu Generation and Distribution Corporation (TANGEDCO), the state currently generates an average of 3,000 MW from thermal plants, 1,000 MW from hydropower stations, and around 150 MW from gas-based plants.

The remaining demand is met through central generating stations and private power companies. To address the increasing consumption, particularly during high-demand periods, the state has floated tenders to procure 500 MW of electricity every day during peak hours for the next three years. In addition, a five-year tender has been issued to purchase 1,000 MW of power round the clock from private producers.

The peak hours, between 6 a.m. and 10 a.m. and again from 6 p.m. to 10 p.m., are the most expensive period for electricity procurement. Even if the maximum tariff is capped at Rs 8 per unit, the daily expenditure for 500 MW would amount to nearly Rs 3.2 crore, translating to about Rs 3,500 crore over three years.

Meanwhile, the 24-hour supply agreement for 1,000 MW over five years is projected to cost approximately Rs 21,600 crore. Together, the total outlay for both arrangements will reach Rs 25,100 crore.

Officials noted that the decision was made to prevent outages during the upcoming northeast monsoon season and to maintain grid stability as the state’s demand continues to rise steadily.

The government is also exploring renewable energy integration, with a focus on solar and wind sources, to gradually reduce dependence on costly thermal and imported power.

The new procurement strategy is expected to provide crucial support to Tamil Nadu’s industries and domestic consumers alike, ensuring a stable and reliable power supply despite fluctuating generation levels from hydel and renewable sources.

--IANS

aal/dpb