The issue of electricity purchases in Andhra Pradesh is once again triggering political debate. In the past, the state entered into an agreement with SECI to purchase 7,000 MW of solar power at ₹2.49 per unit for 25 years. The agreement had faced intense political criticism at the time.
Now, a proposal involving the purchase of 1,344 MW of pumped-storage power for 40 years, with a price of ₹3.72 per unit being cited, has raised a fresh set of questions.
According to official APERC documents, the Andhra Pradesh government and the three state discoms entered into a 25-year Power Sale Agreement (PSA) with SECI in 2021 for the purchase of 7,000 MW of solar power. The recorded levelised tariff for that power was ₹2.49 per unit.
7,000 MW at ₹2.49: Why Did It Trigger Controversy Then?
In 2021, the Andhra Pradesh government and the state discoms entered into an agreement with SECI to purchase 7,000 MW of solar power. The power was to be made available in phases, comprising 3,000 MW, another 3,000 MW and the remaining 1,000 MW.
The agreement was for 25 years, with a tariff of ₹2.49 per unit. APERC approved the purchase.
Official documents also recorded that the power was intended to be used for supplying free electricity to the agricultural sector. An APERC document states that the tariff discovered through SECI’s competitive bidding process had been adopted by the CERC.
However, the agreement has faced political criticism since then. Political groups that had questioned the cost of the arrangement are now raising questions over the price and duration associated with the new power-purchase proposal as well.
New Calculations in SECI’s Name: Why a 40-Year Commitment?
This is where the main political question begins.
According to details cited in a news clipping, discussions are underway over a proposal to purchase 1,344 MW of pumped-storage power for 40 years. The same clipping cites a price of ₹3.72 per unit and analyses the possibility of a substantial long-term financial burden on the state.
However, one important point needs to be clarified.
In a 2026 SECI tender for pumped-storage capacity, competitive bidding was conducted for 1,500 MW/12,000 MWh. Awards covering the 1,344 MW capacity were made to Greenko, Tata Power and Torrent. These arrangements have a 40-year tenure.
Therefore, while the 1,344 MW and 40-year figures cited in the clipping correspond to the SECI pumped-storage transaction, it is necessary to establish from the official agreements exactly how much of this capacity applies to Andhra Pradesh, how much electricity or storage capacity the state intends to procure, and what the final tariff applicable to the state will be.
₹2.49 vs ₹3.72: A Difference of ₹1.23 Per Unit
Based on the figures cited in the clipping, the ₹3.72 price currently being discussed is ₹1.23 higher per unit than the earlier ₹2.49 tariff.
This difference has now become a major point of political debate.
However, solar power procurement and pumped-storage power or storage services are not identical products. Pumped-storage projects involve factors such as storage capacity, discharge duration, cycle losses and fixed charges, among other components.
For example, in the latest SECI tender, Tata Power was awarded 324 MW/2,592 MWh of pumped-storage capacity, with a service tenure of 40 years.
Therefore, comparing the ₹2.49 solar tariff directly with the ₹3.72 pumped-storage price requires consideration of the underlying contractual terms and pricing structure.
₹1,458 Crore a Year: Could the 40-Year Cost Reach ₹58,300 Crore?
According to calculations cited in the news clipping, purchasing 1,344 MW at ₹3.72 per unit would involve an estimated expenditure of around ₹1,458 crore per year, potentially amounting to approximately ₹58,300 crore over 40 years.
These figures are calculations published in the clipping and should not be treated as the final financial liability without examining the complete agreement.
To determine the actual financial burden, several factors need to be considered, including fixed charges, variable charges, utilisation of storage, cycle losses, transmission charges, taxes and other payments specified in the agreement.
This is why demands for the government to disclose the complete agreement, pricing mechanism and overall financial commitment have gained importance.
Objections to ₹2.49 Then, Questions Over ₹3.72 Now
Political critics are primarily focusing on this difference.
Their question is essentially: “If the ₹2.49 tariff was criticised as being too high in the past, how is a long-term power or storage arrangement involving a ₹3.72 price being justified now?”
At the same time, the two arrangements may involve different types of power products, technical structures, payment mechanisms, capacities and supply arrangements. Therefore, the complete contractual details need to be examined before drawing a direct comparison.
From a 25-Year Agreement to a 40-Year Commitment: What Is the Actual Burden?
Compared with a 25-year agreement, a 40-year arrangement represents an additional 15 years of long-term financial commitment.
Long-term power contracts play an important role in the financial planning of discoms. Even when a tariff is fixed, factors such as electricity demand, consumption patterns, alternative power prices and technological developments can change over time.
APERC’s resource-planning documents have already recorded the expected availability of around 7,000 MW of solar power from SECI.
Against this backdrop, several questions arise: Why is additional storage capacity required? How much storage is actually needed? How was its price determined? And how will the new arrangement be integrated with the existing SECI power procurement?
Political Criticism Over the “Power Game”: Could Consumers Bear the Burden?
Political criticism over the issue is intensifying. Critics are asking why a government that had earlier questioned the cost of the SECI agreement is now moving towards an arrangement involving a higher cited price and a longer contractual period.
At the same time, the purpose of pumped-storage projects is to store renewable electricity and make it available to the grid when required. According to Tata Power’s explanation, pumped-storage systems can store surplus solar and wind power and supply electricity during periods of higher demand.
Therefore, the central discussion is not simply “Is storage necessary?” but rather:
“How much storage is required? At what price? For how many years? And what are the financial benefits and costs for the state?”
These Are the Numbers the Public Needs to See
There are several issues on which the government needs to provide clarity:
- How much of the 1,344 MW capacity is allocated to Andhra Pradesh?
- What exactly does the cited ₹3.72 per unit represent in terms of tariff structure?
- What is the state’s total financial liability over 40 years?
- How will this arrangement be integrated with the existing 7,000 MW SECI solar-power agreement?
- What additional financial burden will fall on the state discoms?
- Could the arrangement have an impact on future consumer tariffs?
- What was the competitive bidding process involved in the procurement?
- How has APERC examined or proposed to examine the purchase?
Only after these questions are answered through official documents can the public clearly assess the financial obligations and potential benefits of the arrangement.
From ₹2.49 to ₹3.72: The Public Needs Complete Numbers, Not Just Political Arguments
The earlier 7,000 MW–25-year–₹2.49 SECI solar-power agreement is one side of the discussion, while the currently debated 1,344 MW–40-year pumped-storage arrangement is another.
The two arrangements differ in terms of price, duration, technology and potentially their payment and supply structures.
Politically, however, one question has come to the forefront:
“If the ₹2.49 tariff was questioned in the past, why is an arrangement involving ₹3.72 per unit and a 40-year commitment being considered now?”
The answer should come not merely through political allegations or counter-allegations, but through the complete agreements, tariff calculations, bidding details and assessments of the financial impact on the discoms.
Only with such information can the public properly understand the financial obligations, potential benefits and long-term implications of the proposed power-storage arrangement for Andhra Pradesh.
