Adani Electricity Mumbai Ltd (AEML) has planned to meet 50 per cent of its electricity procurement through renewable energy sources, by FY25.
In a recent investor presentation, AEML, the power distribution licensee in Mumbai serving 3 million customers, and a wholly-owned subsidiary of Adani Transmission Ltd (ATL), said that by FY25, it would meet 50 per cent of its energy requirements through renewable energy sources. The interim target for FY23 stands at 30 per cent. In FY20, renewable energy sources accounted for only 3 per cent of its total power procurement.
Backing this plan is the fact that AEML has also entered into a power purchase agreement (PPA) to procure 700 mw through hybrid (solar-wind) sources. This PPA has already received approval from Maharashtra Electricity Regulatory Commission (MERC).
This power purchase of 700 mw will be made from Rosepetal Solar Energy Pvt Ltd, a wholly-owned subsidiary of Adani Green Energy Ltd. The PPA is for 25 years, at a tariff of Rs.3.24 per kwh. It may be recalled that in July 2019, AEML had floated a tender to source 350 mw, plus a greenshoe of 350 mw, from grid-connected solar-wind projects. According to independent reports, six bidders had responded and Rosepetal with Rs.3.35 per kwh was chosen at the L1 bidder. However, MERC subsequently felt that the quoted Rs.3.35 per kwh was on the higher side, and directed AEML to renegotiate the rate to Rs.3.24 per kwh, which was finalized.
Capital expenditure
AEML has planned to invest Rs.9,500 crore as capital expenditure over the period FY20 to FY25. This capital expenditure would go towards both project investment and capital expenditure for replacement and maintenance.
Among the major projects planned by AEML is the 160-ckm HVDC line with a transfer capacity of 1,000 mw. This line will be developed by AEML’s subsidiary Adani Electricity Mumbai Infrastructure Ltd. (Read more)
New opportunities
AEML also said that it will explore new opportunities in the power distribution space. This includes participation in the privatization process of state government-owned discoms. Typically, such privatization is done through the distribution franchisee model, or the PPP model where an appointed agency representing the state government and the private sector partner form a joint venture that acts as the distribution licensee. There are also “sub-licensing” models for privatization but these are not too popular.
3 million consumers
Adani Electricity Mumbai Ltd distributes electricity to the suburbs of Mumbai. Its total distribution network spans over 400 sqkm catering to around of 2.9 million customers. It has an estimated market share of 55 per cent in the total electricity supplied to Mumbai. In FY21, AEML met a peak power demand of 1,892 mw.
