1,580 MW power contracts finalised to meet growing demand in Tamil Nadu
According to senior officials, TNPDCL is also preparing to float another tender to procure an additional 1,000 MW on a similar medium-term basis shortly
CHENNAI: To meet the rising power demand and reduce dependence on high-cost short-term purchases, the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) has finalised bids to procure 1,580 MW of electricity under a medium-term tender for 5 years from February 1, 2026. The utility had initially sought 1,500 MW.
According to senior officials, TNPDCL is also preparing to float another tender to procure an additional 1,000 MW on a similar medium-term basis shortly.
Vedanta Limited’s thermal business units, Meenakshi Energy Limited (MEL) in Andhra Pradesh and Vedanta Limited’s Chhattisgarh Thermal Power Plant (VLCTPP), emerged as the biggest beneficiaries, securing 500 MW under the latest round of allocations. As per the Letters of Award (LOAs), Meenakshi Energy will supply 300 MW and the Chhattisgarh plant 200 MW. The five-year contract is priced at about Rs 5.38 per kWh.
Apart from Vedanta, 10 other companies have secured allocations, including Orissa Alloy Steel (150 MW), OPG Power Generation (160 MW), Suryadev Alloys & Power (50 MW), SEIL Energy India (100 MW), NTPC Vidyut Vyapar Nigam (150 MW across two sources), PTC India (670 MW across multiple plants), and Jindal Power (300 MW). The price discovered through DEEP (Discovery of Efficient Electricity Price) portal ranged between Rs 5.58 and Rs 6.15 per unit, though the detailed tariff breakup is yet to be disclosed.
Officials said the procurement was crucial as several of TNPDCL’s long-term power purchase agreements (PPAs) were about to expire. Since 2014, the corporation has entered into 11 long-term PPAs totalling 3,330 MW, though one 500 MW agreement was later terminated. Currently, the utility procures 2,830 MW under the remaining contracts, all due to lapse by 2028–29.
The move comes amid rapidly rising demand. Tamil Nadu’s peak demand climbed from 17,563 MW in 2022 to 20,830 MW in 2024. TNPDCL’s projections suggested a median deficit of 4,858 MW in 2026–27 and nearly 7,000 MW by 2029–30, accounting for both expiring contracts and new capacity additions.
Since a long-term procurement typically takes up to four years to materialise, TN Electricity Regulatory Commission (TNERC) has noted that medium-term tenders such as this one were essential to bridge the interim supply gap and ensure grid reliability.