Tamil Nadu has not signed any new long-term power purchase agreements since 2013, the state electricity board has said, even as electricity demand continues to rise and existing contracts covering 2,830 MW approach their expiry dates.
The board said power has been procured from 10 generating companies since 2014 to meet the state’s electricity requirements. The companies include DB Power, Jindal Power and Bharat Aluminium. The agreements were signed in 2013 and have operated as long-term contracts.
Eight of the agreements are set to expire from September 30, 2028, while the remaining two will expire from March 30, 2029, according to the board’s statement. The disclosure places the next few years at the centre of Tamil Nadu’s power procurement planning, as a substantial block of contracted capacity reaches the end of its current term.
The board said that no other long-term electricity purchase agreements had been entered into after 2013. It also linked the absence of newer long-term agreements to a continuing increase in the state’s power demand and said the power shortage had been rising year after year.
Long-term power purchase agreements give distribution utilities a defined arrangement for procuring electricity from generating companies over an extended period. In this case, the agreements with the 10 companies have been used to supply 2,830 MW for meeting Tamil Nadu’s requirements. The board did not provide details in the supplied statement on the tariffs, contract terms, annual demand growth or the precise scale of the reported shortage.
The announcement is significant for the state’s electricity administration because the expiry dates are known several years in advance. Any replacement arrangements will have to account for both the capacity covered by the existing contracts and the additional demand identified by the board. The statement, however, did not specify the companies that may be approached for new contracts, the procurement process or the expected commissioning schedule for replacement power.
The board said steps would be taken to enter into new long-term power purchase agreements after considering Tamil Nadu’s current and future electricity requirements. It said the objective was to meet the state’s demand and ensure reliable, uninterrupted electricity supply for consumers.
The next stage will be the board’s proposed action on new long-term procurement agreements, with the first group of existing contracts scheduled to expire on September 30, 2028.
