Hyderabad: The Telangana government has decided to transition from conventional energy to renewable power sources to meet the State’s growing electricity demand. The move focuses on large-scale solar and pumped storage projects, with key decisions approved by the State Cabinet on Tuesday (November 25, 2025) during a meeting chaired by Chief Minister A. Revanth Reddy in Hyderabad, reports The Hindu.
The Cabinet cleared plans to procure 3,000 MW of solar power and approved signing a five-year power purchase agreement to support the transition. It also authorised the utilisation of 2,000 MW of pumped storage energy and directed officials to initiate the tendering process soon. The meeting, which lasted over four hours, concentrated heavily on ensuring uninterrupted power supply and preparing for long-term energy requirements.
Officials presented an assessment of the State’s projected power needs over the next decade, recommending a balanced mix of renewable and conventional sources. IT and Industries Minister D. Sridhar Babu said Telangana has several suitable locations for pumped storage units, and the Cabinet approved proposals from companies interested in developing them. Developers will receive land and water support, with the condition that all power generated must be supplied to State-owned distribution companies.
In a significant policy change, the Cabinet approved allowing new industrial units to generate their own captive power without any upper limit. Existing units, however, will continue under the current system of grid-based supply.
The Cabinet also discussed replacing the existing Ramagundam thermal plant with a new 800 MW supercritical coal-based unit. Similar plants are planned at Paloncha and other locations in collaboration with NTPC. Sridhar Babu said TG Genco will select developers—NTPC or TG Genco itself—based on the cost at which they offer power.
The new Ramagundam unit will replace the current subcritical plant and operate as a pithead facility. The Minister said the decision follows a detailed assessment of the need for additional thermal capacity.
He clarified that the government has no proposal to increase power tariffs, adding that no such request has been received from discoms.
The Cabinet also approved the creation of a new, exclusive power distribution company in addition to the existing northern and southern discoms, primarily to manage free power supply to the farm sector.
