The Telangana Electricity Regulatory Commission (TGERC) has granted approval for state distribution companies to procure 6,300 megawatts (MW) of renewable energy capacity through a combination of wind, solar, round-the-clock renewable power and firm and dispatchable renewable energy. The procurement plan also includes 8,000 megawatt-hours (MWh) of specified battery energy storage capacity.
The approval covers procurement by Telangana State Southern Power Distribution Company Limited (TGSPDCL) and Telangana State Northern Power Distribution Company Limited (TGNPDCL). The proposed power supply agreements range from 15 to 25 years, depending on the procurement category.
The plan is intended to strengthen the state’s electricity supply, improve renewable power availability during peak-demand periods and support the integration of variable renewable generation into the grid.
Telangana’s renewable power procurement plan
The procurement comprises four components, combining renewable generation with energy storage to provide a more flexible electricity supply.
The first component involves procuring 800 MW of standalone wind power under a 25-year power supply agreement. Wind generation is expected to complement solar power and diversify the state’s renewable electricity portfolio.
The second component covers 3,000 MW of solar power integrated with a 6,000 MWh battery energy storage system (BESS).
The storage system is configured at 1,000 MW for six hours and will operate under a 25-year agreement. It is intended to store electricity generated during periods of high solar availability and make it available when demand increases, including during evening peak hours.
The third component involves procurement of 2,000 MW of renewable energy round-the-clock (RE-RTC) power under a 25-year agreement.
The arrangement will integrate an appropriate energy storage system to support a more consistent renewable electricity supply. The specific storage capacity for this component has not been stated in the available procurement details.
The fourth component covers firm and dispatchable renewable energy (FDRE), with a specified storage configuration of 2,000 MWh, equivalent to 500 MW for four hours.
The procurement will be covered by a 15-year agreement and is intended to provide dispatchable renewable electricity during periods of peak demand.
Together, the four components represent 6,300 MW of renewable power capacity. The specified storage capacity across the solar and FDRE components totals 8,000 MWh, excluding the additional storage requirement associated with the RE-RTC arrangement.
Procurement linked to rising electricity demand
The procurement proposal follows concerns over Telangana’s future electricity requirements and the need to maintain adequate power availability as existing power purchase agreements approach expiry.
According to the Central Electricity Authority’s Resource Adequacy Plan, the state’s annual energy requirement is projected to increase from 108,125 million units (MU) in FY 2026-27 to 177,219 MU by FY 2035-36. Peak electricity demand is also projected to rise by approximately 49.4% over the same period.
The distribution companies have identified the need for additional long-term power procurement to address future supply requirements and meet the Ministry of Power’s Renewable Consumption Obligation targets.
The procurement can be undertaken through competitive bidding, including participation in processes conducted by the Solar Energy Corporation of India (SECI) or through state-level tendering mechanisms. The selection of the procurement route is expected to consider the most cost-effective landed tariff at the Telangana periphery.
Regulatory approval and next steps
The regulatory decision follows a petition filed by the Telangana distribution companies and a public consultation process conducted by TGERC.
During the consultation, stakeholders raised concerns relating to procurement procedures, demand projections and potential implications for electricity tariffs. TGERC also directed the distribution companies to obtain prior approval from the Commission before initiating bidding for future long-term or medium-term power procurement.
The next stage will involve advancing the procurement through the applicable competitive bidding process and finalising power supply arrangements with selected developers.
Bioenergy Business Analysis
Telangana’s procurement plan reflects the growing importance of energy storage in enabling higher renewable power integration. While solar and wind capacity can expand the supply of renewable electricity, their variable generation profiles create challenges for meeting demand consistently throughout the day.
The proposed 6,000 MWh battery system linked to 3,000 MW of solar capacity is designed to shift part of the electricity generated during daylight hours to periods of higher demand. The additional 2,000 MWh FDRE configuration is intended to provide dispatchable renewable power over a four-hour period.
The 2,000 MW RE-RTC component adds another dimension by seeking a more consistent renewable supply through an integrated storage arrangement. However, the precise storage configuration and the eventual generation mix will be important in determining how reliably the contracted power can be delivered.
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