Andhra Pradesh Implements Cost-Saving Power Strategy Amid Daytime Surplus
In response to a consistent surplus in daytime electricity supply, the Andhra Pradesh energy department has initiated a strategic shift by scaling down generation from thermal power stations and increasingly purchasing cheaper power from the open market. This move has resulted in substantial savings of approximately ₹65 crore over the past three months, according to official reports.
Managing Excess Supply and Optimizing Costs
The state is currently experiencing an excess of nearly 2,000 megawatts during daytime hours, necessitating load management measures. While the average daily electricity demand stands at about 12,600 MW, total availability from various sources hovers around 14,000 MW, creating a significant surplus situation. To optimize costs, power utilities are implementing a market-based economic dispatch mechanism, which allows distribution companies (discoms) to source power at competitive rates from the national grid.
Officials highlight that electricity is available in the market at significantly lower prices during non-peak hours. Daytime rates often average around ₹1.50 per unit, and in some 15-minute time blocks, power has been purchased for as low as 40 paise per unit. Even after accounting for higher procurement costs during peak demand periods, the average purchase price remains about ₹4.50 per unit. "In the current scenario, it is more economical to procure cheaper power from the market rather than rely on high-cost thermal generation," officials stated.
Impact on Thermal Power Stations and Future Projections
Since January, discoms have been procuring between 10 to 15 million units of electricity daily from the real-time market, substantially reducing overall power purchase costs. This shift has led to thermal stations across the state operating at reduced capacity. At the Vijayawada thermal power station, older units of 210 MW each are being backed down by about 28%, while higher-capacity units of 500 MW and 800 MW are running with reductions of up to 45%. A similar trend is observed at the Rayalaseema thermal power station, where 210 MW units are operating at 28% lower output and the 600 MW unit at around 45% reduced capacity.
Special Chief Secretary (Energy) K Vijayanand has directed power utilities to develop projections for the upcoming summer season, as peak demand is expected to reach around 14,500 MW. Supply strategies are being aligned accordingly to ensure reliability while keeping procurement costs under control. This approach marks a significant shift towards more flexible and market-driven power management, enabling utilities to respond dynamically to demand fluctuations and price signals.
