Adani Power Plant Granted Flexibility to Supply Domestic Market

An Adani Power-owned coal-fired power plant, previously obligated to sell its entire output to Bangladesh, has been granted the flexibility to supply the domestic market. This significant amendment to India’s power export rules aims to mitigate political risks associated with exporting electricity to neighbouring countries.

The internal federal power ministry memo, dated August 12, amends the 2018 guidelines governing generators that exclusively supply electricity to a neighbouring country. Adani Power’s 1,600-megawatt Godda plant in Jharkhand is the only Indian plant currently under contract to export 100% of its power to a neighbouring country.

The memo stipulates that the Indian government may permit such generating stations to connect to the Indian grid and sell power domestically in cases of sustained non-scheduling or partial capacity utilisation. This move, implemented amidst political instability in Bangladesh, provides a safety net for future projects that have their entire output locked into export contracts.

The amendment also allows for the sale of power to the local grid in the event of delayed payments. This flexibility offers additional protection to Indian power producers operating in neighbouring markets.

The Adani Group has hailed the Godda plant as a shining example of India-Bangladesh cooperation. However, the recent political turmoil in Bangladesh has underscored the importance of having contingency plans in place to mitigate potential risks associated with cross-border power trade.

The amendment to India’s power export rules is expected to increase the overall availability of power within the country, helping to address the soaring electricity demand. It also demonstrates the Indian government’s commitment to supporting domestic power producers and ensuring energy security.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.