AP scales down thermal power generation, buys cheaper power from market

Vijayawada: Faced with a consistent surplus in daytime electricity supply, the state energy department has begun scaling down generation from thermal power stations and turning to cheaper power purchases from the open market. This resulted in savings of around ₹65 crore over the past three months.According to officials, the state is currently witnessing an excess of nearly 2,000 MW during daytime hours, prompting load management measures. While the average daily demand stands at about 12,600 MW, total availability from various sources is hovering around 14,000 MW, creating a surplus situation.To optimise costs, power utilities are backing down thermal generation and procuring electricity through the market-based economic dispatch mechanism, which allows discoms to source power at competitive rates from the national grid. According to officials, power is available in the market at significantly lower prices during non-peak hours. Daytime rates are often around ₹1.50 per unit, and in some 15-minute time blocks, electricity was purchased for as low as 40 paise per unit. Even after factoring in 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 say.Since January, discoms have been procuring around 10 to 15 million units (MU) of electricity daily from the real-time market, substantially reducing overall power purchase costs. Thermal stations across the state have been operating at reduced capacity to accommodate this shift. At 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 visible at 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 directed power utilities to draw up projections for the summer season, as peak demand is expected to touch around 14,500 MW. Supply strategies are being aligned accordingly to ensure reliability while keeping procurement costs under control. The current approach marks a shift towards more flexible and market-driven power management, allowing utilities to respond dynamically to demand fluctuations and price signals.