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Cover Story | August 2014

Power 20:20 | Adani Power

Generation company with the highest installed capacity (private sector) : Adani Power

APL commercialised its first unit of 330 MW at Mundra, Gujarat, in 2009 and scaled up plans to build India´s largest and one of the world´s top five single location thermal power plants with a capacity of 4,620 MW. The company has also made inroads into power generation in Maharashtra, Rajasthan and Madhya Pradesh with an ambitious vision of being a 20,000 MW company by 2020. It commissioned the first supercritical 660 MW unit in the country and also the world´s first supercritical technology project to have received ´clean development mechanism (CDM) project´ certification from United Nations Framework Convention on Climate Change (UNFCCC).

Key Success Factors

  • Long-term plans: The company has operational capacity of 8.6 GW (at Mundra, Gujarat and Tiroda, Maharashtra) and another 660 MW to be commissioned by Q1FY15. APL envisages achieving total commercial capacity of 20 GW by FY20. The company has a good blend of projects in terms of diverse locations, imported and domestic coal, long-term PPAs and merchant sales.
  • PPAs in place: Out of the expected 9.24 GW capacity by FY15, APL plans to sell 85 per cent (7.9 GW) under long-term PPAs and the balance in merchant market which imparts earnings visibility. APL´s entire capacity (9.24 GW) is coal based with a blend of imported (AEL) and domestic (CIL) coal procured through linkages.
  • Fuel risk: Though linkages are in place (except 2.6 GW Tiroda ext/Kawai where linkage is applied for), analysts anticipate risk to domestic coal supply because of the likely production shortage from CIL in the medium term. The Bunyu mines (reserves of 140 MT) owned by AEL can scale up to 10 MTPA, which will be sufficient to fuel only 2.5 GW capacity, but supplies from other overseas mines acquired by AEL are expected only post FY15. Hence during FY13-15 coal for additional capacities will have to be procured on spot basis until domestic supply improves, impacting earnings. However, the latest announcement of agreement with South Korea-based multinational company, POSCO, for joint investment in Australia´s coal mining project in Queensland province is likely to send shivers down the spine of global coal investors. The two have signed a ¨binding agreement¨ to develop a rail line to open up the Galilee Basin coal reserves in Queensland, which will lead to the opening of the Carmichael mine project.
  • Compensatory tariff - a mammoth relief : The order addresses the biggest concern on Adani Power around its ability to service its debt. Analysts believe the compensatory tariff, along with recovery of past losses, will allow the Mundra project to service its debt and reduce burden on the parent balance sheet. Moreover, the company has a strong case for getting a further tariff hike of Rs 0.15-0.20/kwh for its Haryana PPA due to change in domestic laws.
  • Power transmission : APL has already developed and commissioned 400 KV D/C dedicated Mundra - Dehgam transmission line of 430 Kms, which is the longest dedicated transmission line by a private sector player. It has set up 1,000 km ¦ 500 KV HVDC transmission system for supply of power to HPCC with state DISCOMS as beneficiaries. This is the first HVDC transmission line by private sector in the country. Along with this, APL has also developed a dedicated 50 km 400 kV Mohindergarh-Bhiwani transmission line for supply of power to Haryana.

  • Adani Power´s Gujarat SEZ finally gets environmental clearance.
  • Adani signs rail link accord with Posco for Galilee Coal Project.
  • Adani Power´s Mundra plant sets a record in power generation.
  • Total installed capacity now stands at 8,620 MW
  • Adani Power has added 2,640 MW of capacity; 15% of India´s overall power capacity addition in FY14 Adani Power´s installed capacity now stands at 8,620 MW
Parameter Details
Company Adani Power
Ownership Private Limited
Company
Industry Energy
Founded 1996
Headquarters Ahmedabad, India
Products Energy

Current Capacity (MW) Capacity Addition
8,620 660 (TIRORA PH-II, MAHARASHTRA)
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