Massive 6.6GW power deal: Adani Green and Adani Power win historic hybrid energy contract with Maharashtra

In a significant development, Maharashtra State Electricity Distribution Company Limited (MSEDCL) has issued a Letter of Intent (LOI) to Adani Green Energy Limited (AGEL) and Adani Power Limited (APL) for the supply of a massive 6,600 MW of hybrid solar and thermal power. This record-breaking power supply contract, set to bolster Maharashtra’s energy grid, marks the largest hybrid power capacity award in the world since 2020. AGEL will provide 5,000 MW of solar power, while APL will deliver 1,496 MW of thermal power from a new ultra-supercritical capacity.

Adani Green and Adani Power to Boost Maharashtra’s Energy Grid

Adani Green Energy, India’s largest renewable energy company, and Adani Power, the largest private thermal power producer, will each sign separate long-term contracts with MSEDCL under the terms set in the tender conditions. The agreement is set to enhance Maharashtra’s energy capacity by combining renewable solar power with reliable thermal power, thereby balancing the state’s energy needs with sustainability goals.

Adani Green Energy will supply 5 GW (5,000 MW) of solar power from its world-leading renewable energy park currently under development in Khavda, Kutch District, Gujarat. The solar power will be supplied at a fixed tariff of INR 2.70 per kWh over 25 years, making it a cost-effective solution for Maharashtra’s growing energy demand. The solar projects are expected to be connected to the Inter-State Transmission System and will be developed incrementally over three years after the Power Purchase Agreements (PPA) are executed with MSEDCL.

Adani Power, on the other hand, will provide 1,496 MW (net) of thermal power from a new ultra-supercritical thermal power plant. This power plant, with a capacity of 1,600 MW, will operate under the Design, Build, Finance, Own, and Operate (DBFOO) model, with coal sourced from linkages allocated under the SHAKTI Policy. Power supply from this new plant is expected to commence three to four years from the appointed date as per the contract terms.

A Landmark Achievement in Renewable Energy

The agreement with MSEDCL underscores Maharashtra’s commitment to renewable energy while maintaining a balanced energy mix. Maharashtra has been a frontrunner in India’s solar energy landscape, and this latest development is set to reinforce its position. Adani Green Energy’s commitment to sustainability is evident, with the company aiming to achieve a 50 GW renewable energy portfolio by 2030. Adani Green Energy has already achieved significant milestones, such as making its Jaisalmer wind-solar hybrid cluster power Mumbai since March 2023.

Adani Power, meanwhile, emphasises the importance of conventional power in stabilising the grid as India continues its economic growth while maintaining sustainability. Anil Sardana, Managing Director of Adani Power, remarked that conventional power remains vital for supplying base load power, particularly in states like Maharashtra, which is an industrial powerhouse.

Recent Market Performance and Sentiment Analysis

Adani Green Energy Limited, a publicly listed company under the Adani Group, has recently seen a positive uptick in its stock performance. As of the latest trading session, the stock price of Adani Green Energy on the National Stock Exchange (NSE) stands at INR 1,898.00, marking a 3.66% increase. The company has been making significant strides in renewable energy, positively influencing investor confidence. However, the stock has shown some volatility, with a 52-week range fluctuating between INR 815.55 and INR 2,174.10, indicating significant price swings over the past year.

Financial analysts have initiated coverage on Adani Green Energy Ltd. with a “buy” rating, setting a target price of INR 2,550, which implies a potential upside of over 43% from the current levels. This bullish sentiment reflects confidence in AGEL’s ability to continue growing its renewable energy portfolio and its strategic long-term agreements, such as the recent 6,600 MW hybrid power contract with Maharashtra DISCOM.

Expert Opinion: A Game Changer in India’s Energy Sector

Energy sector analysts view this deal as a pivotal moment for India’s energy sector. The integration of 5,000 MW of renewable energy with nearly 1,500 MW of thermal power presents a balanced approach to addressing energy security while pushing forward the clean energy agenda. The fixed tariff of INR 2.70 per kWh for solar power is competitive and ensures that Maharashtra benefits from affordable renewable energy over the long term. The strategic location of the Khavda renewable park and the staggered project implementation plan further highlight Adani Green Energy’s robust planning and commitment to scalability.

This LOI awarded to Adani Group companies is expected to boost investor confidence in India’s renewable sector, demonstrating that large-scale hybrid power projects are not only feasible but are also economically viable. The expertise and experience of Adani Green Energy in the renewable sector and Adani Power’s stronghold in the thermal power market create a formidable combination that can drive the country’s energy transition.