Adani Solar Project fails to supply power to AP, sells elsewhere at higher rates

By The Capital

On 29 Nov 2024 15:54:04

Adani Solar Project fails to supply power to AP, sells elsewhere at higher rates

Adani Green Energy Ltd (AGEL) has come under fire for failing to supply power to Andhra Pradesh from its solar power project,

Adani Green Energy Ltd (AGEL) has come under fire for failing to supply power to Andhra Pradesh from its solar power project, even as it sells electricity on power exchanges at a premium. The project, linked to U S allegations of bribery against Gautam Adani, has missed its September 2024 deadline, leaving the State in a lurch, as per reports.

Missed deadlines Initially expected to deliver 3,000 MW to Andhra Pradesh starting September 2024, the project remains non-operational for the State two months past its deadline. Revised schedules now forecast only 1,000 MW to be delivered by April 2025, with an additional 1,000 MW pushed to January 2026. By early 2026, Andhra Pradesh will receive just 2,000 MW, significantly short of the promised 6,000 MW by September 2025. Selling power at higher rates Despite its failure to fulfill obligations to the state, AGEL has been selling power from the project on exchanges at Rs 3.5 per unit—40 per cent higher than the Rs 2.42 per unit agreed upon in its Power Purchase Agreement (PPA) with the Solar Energy Corporation of India (SECI).

The project, which began with 25 MW in March 2024, has already exceeded revenue expectations by leveraging exchange prices. Transmission issues blamed AGEL attributes the delays to incomplete transmission infrastructure, citing that the Central Transmission Utility of India Ltd (CTUIL) has not made the necessary systems fully operational. According to SECI’s revised schedule, 1,000 MW of transmission capacity will be ready by April 2025, with another 1,000 MW by January 2026. An AGEL spokesperson defended the company’s position, stating that project timelines have been adjusted to align with transmission readiness. The company emphasized its commitment to meeting PPA obligations once infrastructure is in place.

Supply challenges Power transmission experts point out that even with existing connectivity, supply reliability is often inconsistent, allowing companies to sell power on exchanges under SECI’s guidelines, as per Economic Times. AGEL confirmed that it is permitted to sell surplus power while awaiting complete evacuation infrastructure. However, the AGEL reiterated its dedication to supplying contracted power to Andhra Pradesh once transmission systems are fully operational, aiming to restore confidence amid growing scrutiny. The delays and allegations have cast a shadow over the project, raising questions about accountability and the potential impact on Andhra Pradesh’s energy needs. Stakeholders await further developments as the controversy unfolds.