Telangana Approves 200 MW Solar Power Procurement From NLCIL Under CPSU Scheme To Meet Rising Demand And Green Targets

The Telangana Electricity Regulatory Commission has approved the proposal by the state’s power distribution companies (TGDISCOMs) to procure 200 MW of solar power from NLC India Limited (NLCIL) under the Central Public Sector Undertaking (CPSU) Scheme Phase-II Tranche-III. This decision is part of a broader initiative to meet the renewable energy targets and growing power demand in Telangana while ensuring a cost-effective and reliable power supply.

The scheme, supported by the Ministry of New and Renewable Energy (MNRE), mandates the use of domestically manufactured solar photovoltaic cells and modules. NLCIL secured this project through a competitive bidding process and offered the power to TGDISCOMs at a tariff of ₹2.57/kWh. This tariff was revised from ₹2.45/kWh due to the increase in GST rates on solar equipment, which MNRE accepted as a ‘Change in Law’. Despite concerns over higher tariffs compared to earlier solar bids, the Commission noted the price is competitive with current solar tariffs in the market.

TGDISCOMs justified the need for this procurement by citing Telangana’s rising power demand, which already surpassed 83,000 MU in FY 2023-24 and is expected to grow further. They highlighted that the additional solar power would help meet Renewable Power Purchase Obligation (RPPO) targets and comply with energy consumption norms set under the amended Energy Conservation Act. The expected annual generation from the 200 MW project is 503 GWh, with a capacity utilization factor of 28.69%.

Public consultations were held before the approval, and stakeholders raised several concerns. One issue was the location of the plant in Gujarat, instead of Telangana, which might lead to added inter-state transmission charges. TGDISCOMs responded that the bidding rules allowed project siting anywhere in India, and Gujarat was chosen by NLCIL based on favorable solar conditions. Additionally, TGDISCOMs stated that benefits like better solar radiation and lower land costs in Gujarat offset concerns about inter-state charges.

There was also discussion around the waiver of inter-state transmission system (ISTS) charges. While the stakeholders feared these could increase the overall cost of power, TGDISCOMs clarified that the project qualifies for partial ISTS waiver based on its scheduled commissioning date.

Some stakeholders questioned the necessity of additional capacity, especially considering other projects like PM KUSUM and potential surplus power in coming years. However, the Commission acknowledged the consistent rise in demand and the need for a forward-looking approach, especially with commitments to green energy under national and international frameworks. The use of storage systems like BESS (Battery Energy Storage Systems) was also highlighted as a strategy to manage demand-supply fluctuations.

Ultimately, the Commission ruled in favor of the procurement, taking into account the evolving energy requirements of Telangana, the cost-effectiveness of solar energy, and compliance with renewable energy obligations. It also directed TGDISCOMs to seek prior approval for such procurements in the future, reinforcing regulatory oversight.