Andhra Pradesh Govt to Grant Independent Power Distribution Licences to Large Data Centres

Andhra Pradesh is preparing to allow large data centres to operate as power distribution licences within designated areas, as per The Economic Times report reports.  

The proposal is indicative of the increasing electricity needs of such facilities, which run continuously and require stable supply. Officials have indicated that existing arrangements are not always suited to this level of demand. 

Conditions for Eligibility 

The framework sets a minimum connected load of 300 MW for projects seeking approval. Eligible operators will be allowed to establish and manage their own internal electricity distribution systems.  

These systems will function within defined project zones and remain subject to regulatory oversight under existing electricity laws. 

Procurement Flexibility 

Approved data centres will be able to procure power directly from generators. This includes sourcing from renewable energy producers, captive plants and power exchanges. 

The provision is intended to give operators more control over supply and reduce reliance on conventional distribution companies. 

Renewable Energy Requirement 

At least 51% of total electricity consumption must come from renewable sources under the policy. The condition links the expansion of data centre capacity with clean energy use. 

Given the scale of consumption, this requirement is expected to influence procurement patterns within the sector. 

Industry Response 

The structure follows a similar arrangement extended to Google for its data centre cluster in Visakhapatnam.  

Other firms, including Reliance Industries and RMZ Corp, are expected to review the framework as part of their expansion plans. 

Safeguards for Existing Utilities 

The policy includes provisions to limit the movement of current consumers into the new system. This is aimed at avoiding revenue loss for existing distribution companies.  

It also provides for standby supply arrangements to maintain continuity and reduce the risk of disruption to the grid. 

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Conclusion 

The proposal outlines a separate supply mechanism for large data centres while retaining regulatory controls and conditions on renewable energy use. 

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