In what could be described as ‘Andhra Model’ according to the officials, the efforts of the state power sector such as high-level cost optimisation in power procurement, leveraging machine learning and artificial intelligence (MI and AL) and others, have helped the exchequer salvage around Rs 2,342.45 crore in the last two years alone. The department is also trying to balance effective utilisation of the existing resources in the state and short-term purchases so that more savings can be accrued.
The utilities have procured around 3,393 million units (MUs) in 2019-20 and 8,890 MUs in 2020- 21 from open market (short term purchases) by replacing sourcing from costlier units. “The average cost of procurement, including transmission charges came to Rs 3.12 per unit against the approved weighted average procurement cost of Rs 4.55 per unit,” according to a statement from the energy department on Sunday. The swapping of high-cost power with low cost helped in saving Rs 181.58 crore in 2019-20 and Rs 803.97 crore in 2020-21, it added.
The state government explored various ways to bring down the costs of the beleaguered power sector in a scientific way and avoid unnecessary procurement of power to reduce the expenditure on purchases. The officials said that the efforts were lauded by the Union government as well. “Apart from depending on purchase of power in spot market, AP power utilities, for the first time in India, deployed the most accurate day-ahead electricity forecasting model using MI and AL with an objective to forecast next day’s electricity consumption on every 15 minute basis. This has been enabling taking right decisions on electricity demand and supply, management of grid and minimising power purchase cost. Besides, the State has persuaded the Union ministry of power to surrender 625 MW costly thermal power, which helped reduce a huge burden of Rs 1,007 crore on the AP Discoms,” the officials explained.
Furthermore, the Central Power grid used to collect Central Transmission Utility (CTU) Point Of Connection (PoC) charges from AP DISCOMs on anticipated usage on quarterly basis in the past. “Due to this, the AP DISCOMs had to pay higher charges to the central grid. On protest of AP government, the Central Electricity Regulatory Commission changed the methodology resulting in savings of another Rs 350 crore. As a result of all the above measures, the AP power utilities were able to save huge public money of around Rs 2,350 crore in the last two years. Andhra Pradesh had turned a trend setter state and also a role model to entire country. Now, several states had started emulating and following what is now called ‘Andhra Model’ in saving money,” the department claimed. Saving money is helping the State power utilities, which were badly hit due to COVID last year and incurred the revenue deficit to the tune of Rs 4,300 crore , the officials added.
Energy Minister Balineni Srinivasa Reddy said that the state has emerged as a champion of cost effective power at national level only because of the strong determination of Chief Minister Y S Jagan Mohan Reddy.
“No State in the country has achieved such a great success in saving huge public money in power purchases,” he claimed, adding that AP would soon become a destination state for cost-effective power.
Energy secretary Srikant Nagulapalli said that the cost-effective power would benefit every consumer in the State and boost industrial and economic development.
“Our State set an example to the entire country in terms of cost-effective power,” he said. The Secretary also submitted a report to the minister on the economic savings achieved.
