Hyderabad: Telangana power utilities have met the highest ever peak demand of 15752 MW on Thursday as against the previous highest demand of 15623 MW registered on March 8, 2024.
In the last fourteen months, all measures have been taken by the State government to ensure sustained and reliable supply of quality power to all categories of consumers including agriculture, industry and domestic. There has been a significant increase in demand when compared to earlier years.
For example, in the recent months of December and January, the growth in peak demand met has been 13.49 per cent and 10.10 per cent respectively, compared to the same months a year earlier. These are significant increases that, to be serviced, require careful planning of both purchase of power as well as its supply.
Given these trends, the distribution companies have taken steps to meet demand exceeding 17000 MW for the upcoming peak of the summer season. To meet this demand, the distribution companies – SPDCL and NPDCL have planned to procure the power from existing long-term contracts as well as from the power exchanges. The rates for all power purchased from all the long term agreements are decided by the regulatory commission.
Any shortage is met through purchases from power exchange, the working of which is as per the regulations of Central Electricity Regulatory Commission. The distribution companies purchase power from the exchanges not only to meet the short-term deficit, but also to reduce the power purchase cost through power purchase optimization.
Power purchase is required because the base availability of power in the State through long term contracted agreements is 9134 MW, requiring the State to plan for market purchases during non-solar hours in fact, also during solar hours, when the total solar power augmentation does not fill in the total gap with peak demand.
This concept of power purchase optimization is explained as: Whenever the rates in the exchange are less than the variable cost of thermal power plants, it makes economic sense to purchase power from the market and back down the (at that moment) more expensive thermal power stations.
For example, in the recent months of December and January, the distribution companies have purchased power at an average rate of Rs.2.69 and Rs.2.82 per unit, backing down the thermal stations, the average rates for which were Rs.3.97 per unit and Rs.4.18 per unit.
The saving that accrued to the distribution companies through their judicious choice of choosing to procure from the exchanges in particular time periods (when the exchange rates were low) has resulted in savings amount of Rs.196.68 crore in December and Rs.185.27 crore in January.
In fact, from December 2023 to January 2025, the total savings that accrued to the distribution companies because of this optimization is Rs.982.66 crore – that is, nearly a thousand crore. Had this amount not been saved, it would have led to an additional burden upon the consumers of the State.
In fact, this efficient usage of the exchange markets to optimize power purchase spending was recognized by the Central government, which adjudged Telangana SLDC as the best in the country for large States. This award was presented on December 14, in IIT Indore.
