AEML targets Navi Mumbai commercial power demand

Adani Electricity Mumbai (AEML) is looking to capture mega infrastructure projects, including its group-owned Navi Mumbai airport, through the power distribution licence for areas in Navi Mumbai. The company has applied to the Maharashtra Electricity Regulatory Commission for allowing it to be the second distribution company (discom) in the said area.

This is the first such application under Section 14 of the Electricity Act, 2003, which allows more than one distribution licensee in the same area of supply. It has formed a company, namely Adani Electricity Navi Mumbai (AENML), for venturing into new supply areas. The incumbent supplier in the area is state-owned Maharashtra State Electricity Distribution Company.

AEML already is one of the discoms in the city of Mumbai where it took over operations from Reliance Infrastructure after it sold the business in 2017.

“AENML is proposing to secure the electricity distribution licence for the entire geographically continuous area, namely Mulund, Bhandup, part of Thane district, Navi Mumbai, Panvel, Kharghar, Taloja, and Uran in line with the provisions under the Electricity Act, 2003,” read the application text, reviewed by Business Standard.

According to the submission, AENML is looking at a supply area of close to 500 square kilometre with 880,000 households and a population of around 3.5 million (according to the 2011 Census). The area has a mix of commercial and residential consumers.

Most notably, the area comprises some marquee commercial establishments, including the Navi Mumbai International Airport, which is owned and operated by another group entity — Adani Airport Holdings.

In August 2020, Adani Group acquired 74 per cent stake from GVK Group in Mumbai International Airport (MIAL), which operates Mumbai airport. The conglomerate took control of Mumbai airport in July 2021. MIAL is currently constructing Navi Mumbai airport. In a presentation to investors in October, Adani Group said that Phase I of Navi Mumbai airport is expected to become operational in December 2024, with a 20-million annual passenger handling capacity.

Commercial establishments drive the bulk demand for a discom. For the areas that AENML is applying for as several other key projects, including Jawaharlal Nehru Port Trust and Navi Mumbai Special Economic Zone. The company in its application has also said: “Many data centres, which too require bulk power, in and around Navi Mumbai area, are being developed.” Among others, Adaniconnex — a joint venture between Adani Enterprises and Edgeconnex to develop data centres in building a network of hyper scale data centres in India — is starting with Chennai and Navi Mumbai. NTT India has also announced setting up a hyper scale data centre in Navi Mumbai. “Based on past trends, the input energy and demand has grown at 3.3 per cent compound annual growth rate (CAGR). It is assumed that demand growth is expected to be at 8 per cent CAGR for the next five years due to upcoming heavy loads like data centres and airports.

Accordingly, the estimated demand and consumption after five years are expected to be 2.5 gigawatt (Gw) and 13.8 billion units (BUS), respectively,” said the company in the submission. The current demand is close to 1.6 Gw.

It further said while the incumbent’s existing market of around 9.5 BUS shall remain intact, AENML will look to capture the future growth load.