Adani Green's solar project in Andhra Pradesh gets regulatory clarity

Adani Green Energy Ltd’s (AGEL) controversial 7 gigawatt (Gw) manufacturing-linked solar power project in Andhra Pradesh has received the much-needed regulatory clarity over the transfer of 2.3 Gw of capacity from Azure Power.

 

The Central Electricity Regulatory Commission (CERC) has refused to intervene in the substitution of agreements issue, citing it does not fall in the purview of tariff regulations of the Electricity Act 2003. It has reiterated that the transfer of assets rests with the project award agency, in this case, Solar Energy Corporation of India (SECI).

 

Originally, the 2.3 Gw of PPAs were awarded to Azure Power, which subsequently relinquished them. SECI later transferred these agreements to AGEL, citing requests from Andhra Pradesh’s distribution companies.

 

With the CERC’s decision, the project will not require additional regulatory approval. The project had been mired in controversy following allegations of bribery involving Adani Group chairman Gautam Adani.

 

US federal agencies are currently investigating the matter, and indictment documents mention the then Andhra Pradesh government as a key beneficiary of the alleged bribes.

 

In a 23-page order, the CERC clarified that the substitution of developers does not fall within its regulatory scope, effectively closing the matter on its end.

 

Of the 7 Gw, 4.6 Gw was initially allocated to AGEL and 2.3 Gw to Azure Power. SECI had signed separate PPAs with both these companies, which got the CERC approval in April 2022.

 

After Azure backed out of the deal, SECI signed an amended PSA with the Andhra Pradesh discoms in December 2023, transferring Azure's portion to AGEL.

 

An email query sent to AGEL remained unanswered at the time of going to press.

 

Following this development, the CERC was approached to make this agreement official.

 

“We observe that the petitioner has not invoked the jurisdiction of the Commission regarding the regulation of the tariff of the generating company under Section 79(1)(b). The only prayer made by the Petitioner is to take on record the substitution of one generator with another,” the order said.

 

CERC also pointed out that the tariff for the project has already been approved and hence the prayer to approve it again doesn't stand. According to the original tariff petition, Andhra Pradesh government had signed up for the 7Gw capacity at a rate of ₹2.42/unit.

 

The petitioner entered into the PPAs dated 14.12.2021 for the 4.6 Gw with Adani Green Energy Four Limited's SPVs and PPAs dated 16.12.2021 for the 2.3 Gw with Azure Power India Power Limited’s SPVs, according to the submission made to CERC.

 

The order comes at a time when the Donald Trump administration directed the Department of Justice to pause prosecutions of Americans accused of bribing foreign government officials while trying to win or retain business in their countries through an executive order.

 

It adds that such moves put restrictions on American businesses at a competitive disadvantage.

 

The regulatory filings made by the state government to the Andhra Pradesh Electricity Regulatory Commission (APERC) and CERC between 2021 and 2024 reveal that the erstwhile Andhra Pradesh government under YS Jagan Reddy had sought regulatory approval for the controversial Adani Green solar power project in 2021, proposing to offer 7 Gw of the procured power "for free" to rural areas and the agriculture sector.

 

After transferring the PPAs to AGEL, the company executed 11 PPAs in December 2023 and three project allocation agreements in March 2024, for the combined 2.3 Gw capacity. 

The case file

 

Dec 14, 2021

SECI enters into power purchase agreements (PPAs) with Adani Green Energy for 7.7 Gw

 

Dec 16, 2021 

Enters into PPAs with Azure Power India for 2.3 Gw

 

Oct 16, 2023 

Azure unilaterally terminates the PPAs

 

Dec 26, 2023

SECI substitutes Azure PPAs by giving it to Adani on the same rate, following Andhra Pradesh’s push by discoms

 

Oct 7, 2024

SECI approaches regulator seeking clearance on substitution

 

Apr 17, 2025 

CERC refuses to intervene in the agreement substitution issue, citing it does not fall in the purview of Tariff Regulations of Electricity Act, 2003