With core assets in Khavda & Mundra, Kachchh becomes central to Adani’s green ambitions

EIGHTEEN KILOMETRES from a newly made airstrip near Khavda village in India’s westernmost Kachchh district lies a control room surrounded by lakhs of solar panels with a cumulative capacity of 2,000 megawatts (MW). Numerous soon-to-be commissioned wind turbines dot the landscape as dusty winds sweep across 538 square kilometres of barren land, five times the size of Paris, leased out to Adani Green Energy Limited (AGEL) for its flagship Khavda hybrid renewable energy plant, which will see an investment of Rs 1.5 lakh crore.

In addition to the current capacity commissioned in Khavda in the final few weeks of FY24, AGEL plans to commission a total capacity of 30,000 MW by 2030, making it the largest single-location renewable energy plant in the world. The Khavda plant will also make a two-thirds contribution to the listed company’s goal of operationalising a cumulative renewable capacity of 45,000 MW by 2030, up from the current 10,934 MW.

Around 150 kilometres south of the Khavda plant, also in Kachchh district, lies an integrated solar photovoltaic (PV) and wind turbine manufacturing facility owned by Adani New Industries Limited (ANIL), a wholly-owned subsidiary of Adani Enterprises Limited.

Located in the Mundra special economic zone (SEZ), the ANIL facility boasts a solar PV cell and module manufacturing capacity of 4,000 MW and a wind turbine capacity of 1,500 MW. ANIL is also ramping up production of upstream raw materials like polysilicon, ingots, and wafers for an end-to-end manufacturing capacity.

“Our ultimate aim is for wind going up to 5,000 MW at least and for the complete solar manufacturing ecosystem going up to 10,000 MW minimum. We will be adding 1,000 MW wind by March, 2025 and additional 2,500 MW by March, 2027. As far as solar manufacturing is concerned, we can reach target capacity in say three and a half

years from now,” Vneet Jaain, a director on the board of ANIL, said. ANIL plans to invest close to Rs 30,000 crore to expand manufacturing capacities, which cater to both domestic and export markets.

According to Mercom India research, India’s annual solar PV module production capacity stood at 64,500 MW in December, 2023 whereas the total capacity of the governmentapproved shortlist of module manufacturers included in the Approved List of Models and Manufacturers (ALMM) is 37,400 MW. The ALMM excludes foreign manufacturers to give a boost to the domestic solar PV industry. The ALMM order, which was put in abeyance for FY24 by the Ministry of New and Renewable Energy, has been brought back for the ongoing financial year barring projects that received solar PV modules before March 31, 2024.

The ALMM order, along with the Production Linked Incentive (PLI) scheme to boost solar PV module manufacturing capacity, is set to benefit the domestic industry with exclusive market access and incentivised capex spend. The PLI scheme, which has an outlay of Rs 24,000 crore, includes beneficiaries like Adani Infrastructure Private Limited, another wholly-owned subsidiary of Adani Enterprises, Reliance New Energy Solar Limited, Shirdi Sai Electricals Limited, and Indosol Solar Private Limited. Mercom projects India’s solar PV module manufacturing capacity to surpass 1,50,000 MW by 2026.

The ALMM restriction will not affect AGEL’S generation business as its balance locked-in portfolio of power purchase agreements (PPAS) does not have ALMM applicability, according to company executives. “From Adani Green’s perspective, we are having some of the PPAS wherein the ALMM is not applicable… There is no problem at all. We can source from anywhere,” said Jaain, who is also the Managing Director (MD) of AGEL.

“Virtually 97 per cent or 98 per cent of my balance locked-in portfolio of PPAS do not have ALMM applicability. So, whatever I buy for them, I can buy from China. And again, from that 97 per cent, I will have a pass through of basic customs duty (BCD) on that from Solar Energy Corporation of India (SECI) or the relevant DISCOMS. So, I don’t need to necessarily worry about the ALMM or the BCD per se in my business model,” said Raj Kumar Jain, AGEL’S business head, during the Q3FY24 earnings call. Chinese solar PV modules are generally the cheapest in the world owing to economies of scale.

AGEL’S Khavda plant is situated favourably for harnessing solar power as the Kachchh district receives the second highest levels of solar irradiation after the northernmost Ladakh district. Just one kilometre away from the international border, AGEL’S hybrid capacity is in the middle of a salt desert that is remote, uncultivable, and virtually uninhabited.

(The writer’s visit to Khavda and Mundra was arranged by the Adani Group) FULL REPORT ON www.indianexpress.com