Andhra Pradesh Energy Dept. gearing up to set up two new thermal power plants of 800-MW each

The Andhra Pradesh Energy Department is preparing to establish two new thermal power plants with a combined generation capacity of 1,600 Megawatts. This substantial increase in power output is aimed at addressing the growing demand for electricity in the state while eliminating obsolete coal-based generation units that are set to be decommissioned by 2030.

The Energy Department's proposal, which was approved by the AP Electricity Regulatory Commission, will be carried out through a Design, Build, Finance, Own and Operate process. Both public and private entities, including the state-owned Genco, are eligible to participate in the bidding process. The department estimates that the construction of an 800-MW unit will cost between ₹12 and ₹15 per MW.

While the primary motivation for this capacity expansion is the increasing electricity demand, it is also driven by the need to replace aging thermal units that are older than 25 years. Six out of eight units at Dr. Narla Tatarao Thermal Power Station near Vijayawada and one unit at M.V. Ramana Reddy Rayalaseema Thermal Power Plant are at least three decades old, making their closure mandatory by 2030.

Although plans to build a thermal power plant in Srikakulam district are still in the pipeline, they face challenges related to land acquisition.