In a significant move to bolster its energy infrastructure, the Uttar Pradesh government has awarded Adani Power Limited (APL) a 25-year contract to supply 1,500 megawatts (MW) of electricity. The power will be generated from a new 1,600 MW thermal power plant to be established in the state.
Competitive Bidding Process Yields Lowest Tariff
The transaction was negotiated through a competitive auction process which was launched in October 2024. Seven companies undertook the auction, and Adani Power made the lowest offer. The company offered a fixed price of ₹3.727 per unit and a fuel price of ₹1.656 per unit and totaled ₹5.383 per kilowatt-hour (kWh).
The Uttar Pradesh Government sanctioned the Power Purchase Agreement (PPA) between the Uttar Pradesh Power Corporation Limited (UPPCL) and Adani Power. The transaction will meet the state’s projected additional requirement of 10,795 MW power by 2033-34.
Strategic Location and Infrastructure Development
The upcoming thermal power plant will be located in Mirzapur district. Adani Power is identifying suitable land for the project, which will be developed under the Design, Build, Finance, Own, and Operate (DBFOO) model. The plant is expected to commence operations by 2030.
This initiative is part of Uttar Pradesh’s long-term strategy to enhance its power generation capacity and ensure energy security for its growing population and industrial sectors.
Impacts on the State’s Energy Landscape
Powering up 1,500 MW to the state power grid is expected to immensely cut down energy shortages and accelerate economic growth. Having obtained a long-term supply at a decent price, Uttar Pradesh expects to stabilize electricity prices and give quality power to the consumer.
Energy Minister A.K. Sharma said, “This agreement is a big step towards fulfilling our energy needs in the future and providing unbroken power supply to our citizens.”
Adani Power’s Expanding Footprints in India’s Power Industry
This transaction also positions Adani Power as one of India’s high-value private thermal power generators. The company’s entry into the premium projects is according to its vision of diversifying its power portfolio and helping build India’s power sector.
The project also mirrors the general trend of public-private partnership in India’s energy sector in an effort to satisfy the rising demand for power through co-operation.
