Adani firms to sign 6.6 Gw power supply pact with Maharashtra discom

Adani Green Energy and Adani Power won a bid to supply 6,600 MW of power to Maharashtra

Adani group entities - Adani Green Energy (AGEL) and Adani Power (APL) - announced on Sunday that they will sign a long-term power purchase agreement (PPA) with Maharashtra’s largest electricity distribution utility to supply the state with a 6.6 gigawatt (GW) of combined solar and thermal power.

The two companies said in a statement they secured the 6,600 MW (6.6 GW) contract through a competitive bidding process initiated by Maharashtra State Electricity Distribution Company Limited (MSEDCL).

"The terms of the tender permit APL to bid for thermal power capacity along with solar power capacity, which can be supplied by a group company. APL accordingly also bid for 5000 MW solar capacity on behalf of AGEL, thereby leveraging 

the two entities’ respective competitive advantages and strengths in the thermal and solar power sectors," the statement said.

According to industry sources, three other bidders participated in the process.

The companies said, AGEL will sign a PPA with MSEDCL under the Letter of Intent (LOI) for the supply of 5 GW solar power.

The solar capacity has been allocated at a flat tariff of Rs 2.70 per kWh for the supply of power for 25 years. In terms of timeline, the solar projects are to be developed in a staggered manner over three years from the execution of the PPAs.

AGEL intends to supply this power from its renewable energy park being developed at Khavda in Kutch District of Gujarat.

APL will sign a long-term Power Supply Agreement (PSA) with MSEDCL for the supply of 1496 MW (net) thermal power to the state. It will supply the thermal power to Maharashtra from a new 1,600 MW ultra-supercritical thermal power project. The thermal capacity has been awarded on a Design, Build, Finance, Own and Operate (DBFOO) basis with the sourcing of fuel from coal linkages allocated under Para B (iv) of the SHAKTI Policy, the company said.

APL will enter into a 25-year Power Supply Agreement (PSA) with MSEDCL and supply will commence three and a half years after the appointed date.

In a press release, the companies noted, that the solar capacity award of 5 GW is the world’s largest such award since 2020, bolstering AGEL’s leadership in India and as one of the largest renewable energy portfolios globally. Similarly, the thermal capacity award is the largest in India in recent years to be awarded to the private sector.

Analysts with Emkay noted, "We view Rs2.7/kWh flat rate for the PPA term of 25 years positively... Khavda, with 30 GW, would enjoy significant economies of scale." The analysts further said, "

Combined bidding provide synergies, (with) AGEL already supplying to Mumbai."

Meanwhile, Congress general secretary in-charge Jairam Ramesh criticised the development, describing it as a “rigged deal".

"Even as the Mahayuti Government in Maharashtra totters towards a landslide defeat, this is what they choose to do with their last few days in power. Yet another Modani enterprise undoubtedly!" Ramesh wrote in a post on X.