Andhra Pradesh to Procure 1,600 MW Thermal Power

Andhra Pradesh Electricity Regulatory Commission (APERC) granted in-principle approval on 6 August 2026 for the state distribution companies to begin competitive bidding for 1,600 MW of coal-based thermal power. The procurement will use the tariff-based Design, Build, Finance, Own and Operate (DBFOO) model under Section 63 of the Electricity Act, 2003.

Competitive Bidding Framework

The bidding process will use standard documents such as the Request for Qualification (RfQ), Request for Proposal (RfP), and Power Supply Agreement (PSA). These documents are notified by the Union Ministry of Power for tariff-based procurement of electricity through competitive bidding.

Regulatory and Institutional Process

The procurement process began after a state review meeting chaired by Chief Minister N. Chandrababu Naidu on 27 April 2026. The Andhra Pradesh Power Coordination Committee (APPCC) approved the proposal on 11 June 2026 before it was placed before APERC for regulatory clearance.

Thermal Power and Resource Adequacy

The 1,600 MW procurement is the first phase of a larger plan linked to the Central Electricity Authority’s Resource Adequacy Plan. The plan recommends adding 5,588 MW of thermal power in Andhra Pradesh by FY 2035-36.

Important Facts for Exams

• Section 63 of the Electricity Act, 2003 provides for tariff determination through competitive bidding.
• DBFOO stands for Design, Build, Finance, Own and Operate.
• APERC is the State Electricity Regulatory Commission for Andhra Pradesh.
• Coal-based thermal power is a dispatchable source of electricity and is used for meeting peak demand.

Grid Relevance and Demand Profile

Andhra Pradesh has recorded maximum summer demand above 15,000 MW. The state has linked the new thermal capacity to periods of peak demand and low renewable energy generation.