Tough year ahead for power consumers in AP

V. Rishi Kumar Hyderabad | Updated on November 20, 2017

Situation likely to improve by next year

Power consumers in Andhra Pradesh are in for a tough summer this year given the huge demand-supply mismatch and tariff hikes.

Though Andhra Pradesh has an installed capacity of 15,898 MW, utilities are barely able to generate 8,500 MW due to shortage of natural gas, coal and inadequate water level in reservoirs hampering power generation.

With the rabi crop season setting in and tough summer ahead, consumers cutting across segments, domestic, commercial and industrial are in for a tough time. While power shortage itself is a major issue, they are also in for higher tariffs, burdened with fuel surcharge adjustment.

Devendra Surana, President, Federation of Andhra Pradesh Chamber of Commerce and Industries, told Business Line the power situation looks bleak for industrial consumers, who are faced without power supply of 50-60 per cent and for nearly 16 days in a month.


He said that a meeting of the federation was held with the Andhra Pradesh Electricity Regulatory Commission on making alternative arrangements for supply of power to industries. This will be applicable for units willing to purchase power at higher cost. This scheme is likely to be approved soon, he said.

“Never in the history of the State, we faced power cuts of this magnitude during winter. The cuts and power holidays imposed on the industries from September 15, 2011 continue even now and the situation will only get tougher as we head towards March and into summer where demand will further spurt. Energy intensive consumers such as ferro alloys and steel and small units are on the verge of collapse,” Surana said.

As on January 1, 2013, power demand has shot up to 269 million units (MUs) per day and the State is able to meet the requirement of about 216 MUs, leaving a demand supply gap of about 53 MUs.


The State Government has initiated several measures, including promotion of renewable energy projects. But capacity addition from solar and wind power projects will be meagre compared with the State’s growing demand. The Power Grid Corporation of Indian Ltd is strengthening the link between west and south. This is expected to help evacuate surplus power from north to south. The work on the new grid has commenced and is expected to be completed by December.


The State is likely to see big capacity addition of about 3,300 MW by 2014-15 with the commissioning of plants at Krishnapatnam (1,600 MW), Bhupalapalli (600 MW) among others.

There is hope for the gas-starved independent power producers. Gas supply is likely to get better once the RLNG terminal is in place by December. The terminal is expected to process and supply enough gas to meet the requirement of about 2,400 MW of installed capacity.

Tariff hike

Meanwhile, consumers, who are faced with the FSA incurred due to purchase of power are a worried lot with tariffs for the next financial year poised to go up. The tariff hike will be the Government’s effort to shore up the finances of electricity boards due to growing input costs.


Published on January 02, 2013

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