Adani Green Energy Ltd (AGEL), the renewable energy (RE) arm of the Adani Group, said it had won the largest in the world single bid, to develop solar photovoltaic (PV) power project of 8 Gigawatt (GW) along with setting up solar cells and module manufacturing capacity of 2 GW.
These manufacturing linked solar agreements from the Solar Energy Corporation of India (SECI) are first of their kind. The other contender, Azure Power, has also snagged a solar PV project of 4,000 Megawatt (MW) and solar kit manufacturing capacity of 1,000 MW.
The total investment tab for AGEL’s project is pegged at $6 billion (₹452 billion) which is to be delivered over a period of 60 months. Further, according to a company statement, 400,000 direct and indirect jobs are expected to be created in the process and about 900 million tonnes of carbon dioxide to be displaced over the project’s lifetime.
As per the plan, the first 2 GW of generation capacity will come online by 2022 and the subsequent 6 GW capacity will be added in 2 GW annual increments through 2025.
AGEL’s projects will include a variety of locations, including a 2 GW single-site generation project that is tied for the rank of the largest single-site project announced globally.
The solar cell and module manufacturing capacity of 2 GW will be established by 2022 and along with the existing 1.3 GW of capacity will further consolidate the group’s position as a key player in the solar manufacturing facility.
In total, AGEL will now have 15 GW capacity under operation, construction or under contract thereby accelerating its journey towards becoming the world’s largest renewables company by 2025.
This award will take the company closer to its target of achieving an installed generation capacity of 25 GW of renewable power by 2025, which in turn will see AGEL committing to an investment of Rs. 112,000 crores ($15 billion) in the renewable energy space over the next 5 years, the statement said.
“In today’s world, climate adaptation cannot be considered independent of economic development priorities and both, job creation as well as decarbonization must be simultaneous objectives,” the statement quotd Gautam Adani, Chairman of the Adani Group, as saying.
India made a commitment at the 2015 United Nations Climate Change Conference in Paris that it would lead the climate change revolution and today is the leader among the just eight nations on track to meet their COP21 commitments, he added.
According to the statement, AGEL’s business model focusses on long-term contracts with investment grade counter-parties for construction of large projects, and thereafter building solar development partnerships with major global energy players that seek to reduce their carbon footprint. This has enabled AGEL to expand rapidly since its public listing less than two years ago and this new contract will only further help strengthen this model.
Currently, India’s domestic solar cell manufacturing capacity stands at 3,300 MW and the capacity for module-making is 8,000 MW.
To give a fillip to domestic manufacturing in the solar energy sector, in 2019, the SECI board has approved of tenders for domestic manufacturing-linked projects at a tariff of Rs 2.92 per unit through reverse auction.
According to industry analysts, the manufacturing-linked projects enjoy a higher tariff ceiling of Rs 2.93 per unit as against average Rs 2.60 for general projects. So the reverse auction starts from a higher level, giving promoters some fiscal latitude.