In Short : The Telangana Cabinet has approved the creation of a third DISCOM to manage high-demand sectors and unveiled a comprehensive power sector expansion plan. Key measures include procurement of 3,000 MW solar power, development of 10,000 MW pumped storage capacity, new thermal projects, captive power liberalization, and underground power infrastructure for Hyderabad.
In Detail : The Telangana Cabinet has approved the establishment of a third power distribution company as part of a major restructuring of the state’s electricity sector. The decision aims to strengthen power management, improve operational efficiency, and prepare the state for rapidly rising electricity demand driven by urbanization, industrial growth, and expanding irrigation needs.
Currently, electricity distribution in Telangana is handled by two entities, NPDCL and SPDCL. The proposed third DISCOM will exclusively serve high-demand and essential sectors, including agriculture, lift irrigation projects, Mission Bhagiratha drinking water schemes, HMWSSB services, and safe drinking water supply systems.
By separating these critical and high-consumption segments, the government expects to reduce financial and operational stress on existing DISCOMs. This restructuring is intended to improve monitoring, enhance service quality, and ensure uninterrupted power supply to sectors vital for public welfare and economic stability.
The Cabinet conducted a detailed review of the state’s current and future electricity requirements, noting that demand is expected to rise sharply over the next decade. Population growth, industrial expansion, urban development, and irrigation infrastructure are expected to significantly increase overall power consumption.
To address sustainability goals, the government approved floating tenders for procuring 3,000 MW of solar power under time-bound five-year agreements. This move reflects Telangana’s intent to reduce reliance on conventional thermal power and expand its renewable energy footprint.
In parallel, the Cabinet approved plans to procure 2,000 MW of pumped storage power and permitted private investors to develop pumped storage projects. Pumped storage is seen as a key solution for balancing renewable energy variability and strengthening grid stability.
The government also cleared proposals to develop up to 10,000 MW of pumped storage capacity, with the state providing land and water resources. A critical condition is that power generated from these projects must first be offered to Telangana DISCOMs to ensure long-term energy security.
Under its Clean and Green Energy Policy, the Cabinet allowed newly established industries to generate captive power without any capacity limits. This policy aims to promote industrial self-reliance, reduce stress on public grids, and attract greater domestic and foreign investment into the state.
On the conventional front, the Cabinet approved an 800 MW thermal power plant at NTPC Ramagundam and proposed new NTPC units at Palvancha and Maktal. Additionally, Hyderabad will get an underground power cable system costing ₹14,725 crore, improving reliability, safety, and urban infrastructure efficiency.
