Adani Power wins short-term contracts to supply 6,100 MW to Punjab

Adani Power has won short-term contracts for supply of 6,100 megawatt (MW) of electricity in auctions held by the Punjab government for procuring a total of 7,000 MW. Although the tariffs quoted by the firm are not known, sources said the deals were struck at rates ranging between Rs 3.35-3.59/unit, slightly lower than short-term prices discovered in recent months.

In all, the state government invited tenders for procuring 7,000 MW of power on a short-term basis between June 15, 2021, and August 30, 2021, to meet its electricity demand for irrigation. The state held auctions in seven batches of 1,000 MW each. Industry sources said Adani Power’s Mundra unit quoted the lowest tariff for 600 MW capacity each in all seven tranches. Besides, Adani Power’s Raipur Energen won 300 MW each in four auction batches, and the company’s Raigarh Energy has cumulatively won 700 MW for the entire supply period.

Raipur Energen houses the 1,370 MW Raikheda plant in Chhattisgarh, which Adani acquired in August last year for Rs 3,530 crore from the GMR Group and other lenders. Raigarh Energy operates the 600 MW Korba West generation unit — earlier run by Avantha Power — which was bought by Adani for Rs 1,024 crore in July 2019.

While there is no official word yet, the sources said the remaining 900 MW in the auctions was won by JP Nigrie, DB Power and GMR Energy Trading.

Adani Power’s 4,620 MW Mundra plant will supply power to Punjab from the untied capacity left vacated as Gujarat discontinued procuring 1,000 MW electricity from the station after the Supreme Court in July 2019 validated the company’s claim for compensatory tariff. The company had sought additional costs incurred in fuel procurement after the Gujarat Mineral Development Corporation reneged on its promise to supply local coal from Mogra-II coal block in Chhattisgarh.

Under a separate power purchase agreement (PPA), Adani Mundra continues to supply 1,200 MW power to Gujarat using imported coal. Adani Power has signed the revised PPA with the state as per the Supreme Court’s October 2018 ruling that allowed compensatory tariff relief against a rise in Indonesian coal rates. However, after taking into account the fall in global coal prices, Gujarat will revise the terms and conditions of the supplementary PPA, calculating tariff on the basis of fresh parameters.