Assam to Secure 500 MW Power Supply

The Assam Electricity Regulatory Commission (AERC) has granted in-principle approval to the Assam Power Distribution Company Ltd (APDCL) to procure 500 megawatts (MW) of power from four coal-based power generators over the next decade.

The move comes amid rising electricity demand driven by rapid industrialisation, urban expansion, and rural electrification across the state. According to regulatory officials, the procurement will be implemented in a phased manner — 200 MW beginning from the financial year 2025-26, followed by an additional 300 MW starting FY 2028-29. The 25-year contracts have been approved at a levelised tariff of ₹5.79 per kilowatt-hour (kWh), as discovered through competitive bidding on the Ministry of Power’s DEEP (Discovery of Efficient Electricity Price) portal.

The power suppliers selected for this long-term arrangement include major players in the sector, with officials emphasising that the decision follows a comprehensive assessment of the state’s projected energy demand and supply stability. The approval, issued under Section 63 of the Electricity Act, 2003, reflects the regulatory authority’s effort to proactively address energy shortages anticipated in the coming years. Assam’s energy requirement has seen a consistent upward trajectory, with urbanisation and economic development creating sustained pressure on the grid. Officials at APDCL highlighted that the state is currently served by 36 power sources, including central government allocations, independent power producers, and in-house hydroelectric generation. However, the seasonal nature of hydropower – heavily reliant on monsoon flow – has led to fluctuations in availability, making consistent supply a challenge.

“The industrial and infrastructure growth in Assam, paired with expanded rural electrification, is accelerating electricity demand beyond current supply capabilities,” a senior official at APDCL stated. “The approved procurement aims to bridge the demand gap through secure, long-term arrangements with coal-based plants until renewable sources can sustainably catch up.” The need for capacity augmentation was underscored in the Resource Adequacy Plan for Assam (2024-25 to 2034-35), published by the Central Electricity Authority (CEA). The report noted the necessity for the state to contract additional coal capacity annually through FY 2034-35, not only to maintain reliable supply but also to remain in compliance with the Renewable Purchase Obligation (RPO) guidelines issued by the central government.

While coal remains a contentious energy source in light of climate change targets, regulators argue that this strategic procurement is a short- to medium-term necessity. Renewable energy integration remains a priority, but the intermittency of solar and wind, compounded by limited storage infrastructure and transmission bottlenecks, presents challenges in exclusively relying on green power in the immediate term. Nonetheless, APDCL has reiterated its long-term vision of transitioning towards sustainable energy models. “This coal-based procurement is a transitional buffer. Our planning includes increasing renewable capacity steadily while maintaining grid stability,” an official with the company said.

Currently, Assam’s power grid benefits from several key hydroelectric projects such as Karbi Langpi and the Kopili stations. However, drought-like conditions, delayed monsoons, and environmental constraints have reduced their dependability as primary energy sources, necessitating supplementary thermal support during peak demand periods. Officials at the AERC affirmed that the decision was reached after detailed evaluation of the petition filed by APDCL, including technical and financial justifications. The commission is also expected to monitor the implementation and operational efficiency of the power agreements, including adherence to environmental compliance and future tariff reviews.

The procurement also highlights the broader issue of balancing energy access and sustainability. Assam, like many Indian states, faces the dual challenge of rapidly scaling up infrastructure to meet human development needs while progressing towards net-zero commitments. Energy experts suggest that while such coal-based agreements may raise environmental concerns, they are pragmatically essential to prevent blackouts, support economic activity, and maintain grid discipline — particularly in regions where renewable energy penetration is still low.

Looking ahead, the state’s energy authorities are also exploring hybrid renewable projects and grid-scale battery storage as future options to stabilise supply without further reliance on fossil fuels. In the meantime, the newly approved 500 MW power deal stands as a cornerstone for Assam’s energy planning, helping ensure that the lights stay on while the state transitions to a greener future.

Assam to Secure 500 MW Power Supply