Company Overview

Adani Green Energy Limited (AGEL,  NSE: ADANIGREEN) is one of the largest renewable companies in India, with a current project portfolio of 13,990 MW. AGEL is part of the Adani Group’s promise to provide a better, cleaner and greener future for India. Driven by the Group’s philosophy of ‘Growth with Goodness’, the Company develops, builds, owns, operates and maintains utility-scale grid-connected solar and wind farm projects. The electricity generated is supplied to central and state government entities and government-backed corporations.1

On the back of long-term Power Purchase Agreements (PPAs) of 25 years with central and state government entities, AGEL has leveraged its capabilities and expanded its presence across 11 Indian states. The Company deploys the latest technologies in its projects. With a portfolio of 54 operational projects and 12 projects under construction, AGEL is driving India on its renewable energy journey.

Business Segments

Solar Power Generation

The company's engineering capabilities help it design cost-efficient projects, which are backed by a thorough analysis of the land, solar radiation, grid connection infrastructure and emerging technologies. The company's project design also considers various factors such as the geographical location, climate conditions, temperature and its impact on equipment, local facilities as well as potential maintenance requirements. The company thus ensure that all its capital investment projects are carried out after considering and studying the risks involved.2

LocationCapacity
Kamuthi, Tamil Nadu648 MW
Pavagada, Karnataka150 MW
Bathinda, Punjab100 MW
Durg, Chhattisgarh100 MW
Madhuvanahally, Karnataka100 MW
Narketpally, Telangana100 MW
Basavana Bagewadi, Karnataka20 MW
Byadagi, Karnataka20 MW
Channapatanna, Karnataka20 MW
Gani , Andhra Pradesh50 MW
Gubbi, Karnataka20 MW
Holenarasipura, Karnataka20 MW
Jhansi, Uttar Pradesh50 MW
Mahoba, Uttar Pradesh50 MW
Jevargi, Karnataka20 MW
K R Pet, Karnataka20 MW
Kallur, Karnataka50 MW
Kanasar, Rajasthan20 MW
Kilaj, Maharashtra20 MW
Maaluru, Karnataka20 MW
Magadi, Karnataka20 MW
Maskal, Karnataka50 MW
Nalwar, Karnataka40 MW
Periyapattana, Karnataka20 MW
Rajeshwar, Karnataka50 MW
Ramanagara, Karnataka20 MW
Rastapur, Karnataka50 MW
Rawra, Rajasthan250 MW
Shorapur, Karnataka10 MW
T Narasipura, Karnataka20 MW
Tipatturu, Karnataka20 MW
Yatnal, Karnataka50 MW

Wind Power

The company develop, build, own, operate and maintain utility-scale grid-connected renewable farm projects and generate revenue through the sale of electricity to Central and state government entities and government-backed corporations. For wind project development, the company continuously evaluate various regions of the country for wind resource potential. Adani Green Energy has already installed many wind-mast in resource-rich areas of the country, enabling it to confirm the site wind resource potential and allowing micro siting.3

LocationCapacity
Lahori, Madhya Pradesh12 MW
Rojmal, Gujarat30 MW
Sadla, Gujarat18 MW
Dayapar, Gujarat325 MW
Mundra, Gujarat12 MW

Hybrid Power

Variability in Solar and Wind generation has emerged as a concern in large-scale adoption of renewables, especially after it contributes a major share in the energy mix. Hybridisation of wind and solar plant is developing a solution which will reduce this variability due to complementary nature of their generation profile - solar generation is higher during the day, while wind generation can be higher in the night.4

Hybrid projects would also have much higher capacity utilization, thus removing the intermittency challenge. Such projects also enjoy the additional benefit of a reduction in costs associated with sharing transmission lines. Peak balancing through gas and hydro generation shifting, demand management, smarter grids, electric vehicles as well as storage solutions including battery, pumped hydro and others are expected to further help in smoothing out the variability caused due to the nature of renewable energy supply.

Solar Parks

Adani Renewable Energy Park Rajasthan Ltd (AREPRL) is a 50:50 Joint Venture Company (JVC) incorporated by Adani Renewable Energy Park Ltd (AREPL) and Rajasthan Renewable Energy Corporation Ltd (RRECL), Government of Rajasthan, under the Companies Act, 2013. The JVC has been formed under the provisions of the MNRE Scheme for development of solar parks and UMPPs 2014, wherein both the parties hold equal shareholding.5

Adani Renewable Energy Park Rajasthan Ltd

An MoU has been signed with RRECL, the Government of Rajasthan’s nodal agency for the development of non-conventional energy sources, to develop solar parks with a cumulative capacity of 10,000 MW in a phased manner. As part of the first phase Adani Renewable Energy Park Rajasthan Ltd (AREPRL) is developing a 500 MW capacity solar park in Bhadla, Jodhpur and 1,500 MW capacity solar park in Fatehgarh, Jaisalmer.

Industry Overview

An increase in renewable energy in the overall consumption would benefit in reducing the use of fossil fuels and air pollution, maintenance requirements would be lower and has a number of environmental benefits. India is committed towards global climate change initiative and has ratified the Paris Agreement on Climate Change. As part of its Intended Nationally Determined Contributions (NDC), as per the Paris Climate Agreement, India has committed to install around 40% of its power generation capacity based on non-fossil fuel resources by 2030. The major pillar in achieving the NDC commitment is the massive renewable energy capacity addition target of 175 GW by 2022.6

According to Australia-based Institute for Energy Economics and Financial Analysis, India’s renewable energy sector needs new investment in a range between $500 billion and $700 billion by 2030 to meet its aspiration of 450 GW (as per CEA analysis) of installed capacity. Most of the grid connected RE projects in the country are being implemented by private sector developers selected through transparent bidding process.

The renewables industry responded to the government’s call for climate-compatible growth by aggressively ramping up capacity, at an annual growth rate of 17.5% between 2014 and 2019 and increasing the share of renewables in India’s total energy mix from 6% to 10%. With an installed renewables capacity of 83 GW by FY 2019, plus 31 GW under development and a further 35 GW out for tender, India is among the top-five clean-energy producers globally and is well on course to surpass its original target.

The installed capacity of renewable energy generation in the country has grown 72% from 80 GW to 138.9 GW during the past six years. Of the renewable energy sources, excluding large hydro above 25 MW, installed capacity of solar energy capacity registered the highest growth. It grew from 2.6 GW in March 2014 to 34.6 GW in March 2020.

Modern renewable energy is not only used in electricity consumption – the potential is also great for heating, and transport. India needs an all-inclusive strategy for renewable energy to tap into this potential and to make sure that market development can be helpful for sustainable development more generally, including local air and water quality.

Many large industries have made commitment for 100% RE and there is global trend of sourcing renewable energy by C&I customer for sustainable business. In India also that trend has started due to both, economical advantage and for sustainable growth. There is potential in this segment for sustainable growth.

As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role. Today, the criticality of renewable energy cannot be stressed given that it balances the three crucial goals of the Indian economy: rapid pace of growth, confronting pollution and meeting global promises on climate change. Not surprisingly, the sector has been at the centre of policy consideration and the Indian government has been focusing on several enablers to help unleash its full potential.

Key drivers

  • Reduced cost of renewable energy helping DISCOMs to optimise cost – With large scale installations leading to economies of scale and supply chain efficiencies, the cost of renewable power has already fallen below the Average Power Purchase Cost (APPC) of majority of DISCOMs. With tariffs in renewable sector below APPC, incentives for DISCOMs to purchase renewable power increases.
  • Reducing reliance on fossil fuel imports – Coal is one of the top five commodities imported in India, adding to India’s trade deficit leading to depreciation of INR against USD. Given the increasing competition for the procurement of fossil fuels, the prices of petroleum products have been increasing. The increased use of indigenous renewable resources is expected to reduce India’s dependence on expensive imported fossil fuels.
  • Government support – The Indian Government is playing an active role in promoting the adoption of renewable energy resources by encouraging private sector investment and mandating the use of renewable resources. It is offering various initiatives to support the development and use of renewable energy sources.
  • Climate change - As the world’s fastest growing large economy, to sustain its growth, the company need to exponentially increase its energy output. With the success of the government’s efforts in rural electrification, the company will need to double today’s generation levels by 2030, and the company cannot afford to have all this come from coal. India released a National Action Plan on Climate Change (NAPCC) aimed at promoting the understanding, adaption and mitigation of climate change, energy efficiency and resource conservation. National Solar Mission aims to promote the development and use of solar energy for power generation and other uses, with the objective of making solar energy compete with fossil-based energy options.
  • Distributed electricity demand – Renewable energy is a distributed and scalable resource making it well suited to meet the need for power in remote areas, which lack grid and road infrastructure.
  • Great resource potential – India has a geographical advantage, making it an ideal country for renewable energy adoption. The country’s large land mass receives one of the highest levels of solar irradiation in the world. It has an extensive coastline and high wind velocity in many areas. This provides ample opportunities for the establishment of landbased renewable energy generation as well as for offshore wind farms

Financial Highlights

Performance Highlights

The company has recorded total income to the tune of ` 2,62,907.48 Lakhs during the financial year 2019-20 compared to ` 2,13,099.80 Lakhs in the corresponding previous financial year.

During the year, the company generated earnings before interest, depreciation and tax (EBIDTA) of ` 1,78,184.38 Lakhs compared to ` 1,70,982.01 Lakhs in the previous year.

Net loss for the financial year 2019-20 is ` 6,796.34 Lakhs as compared to Loss of ` 47,505.59 Lakhs in the previous financial year.

Earnings per share stood at ` (0.74) on face value of ` 10/- each.

Operational Highlights

The company is the only large listed pure play Renewable Power producer in India with a current Indian project portfolio of 5,990 MWac, on consolidated basis, with operational portfolio of 2,595 MWac and balance 3,395 MWac under construction. The projects of the company are set up at 57 locations spread across 11 states in India. CUF for the current year was at 22.68% for solar power projects and 27.86% for wind power projects. Plant availability for the current year was at 98.90% for solar power projects and 89.49% for wind power projects.

Effects of COVID -19

Towards the end of the financial year under review, COVID-19 flare up has created uncertainties on possible supply and demand side, leading to abnormal market volatility across geographies.

The company’s operational assets are not market facing and is not impacted by demand side disruptions. The company does not expect the demand from renewable plants to be adversely affected by the Covid-19 crisis. The company does not anticipate any material adverse impact on the financial health of the counterparties that procure power from the company, as well.

On the supply side, for the under-construction projects, while there have been minor delays in some cases, the company does not expect this temporary disruption to materially affect the company. The company’s suppliers in China have informed that the production lines have been coming online. Further, Ministry of Finance, GoI has issued a clarification categorizing supply disruption as a result of current pandemic as a natural calamity that will be covered in the Force Majeure clause under the agreement, which protects the company from any financial difficulties arising from delays in project execution.

Recent developments

9th Jun, 2020 ; Adani Green Energy Limited (AGEL, NSE: ADANIGREEN) has won the first of its kind manufacturing linked solar agreement from the Solar Energy Corporation of India (SECI). As a part of the award, AGEL will develop 8 GW of solar projects along with a commitment that will see Adani Solar establish 2 GW of additional solar cell and module manufacturing capacity. This award, the largest of its type, ever, in the world, will entail a single investment of Rs. 45,000 crores (US $6 billion) and will create 400,000 direct and indirect jobs. It will also displace 900 million tonnes of carbon dioxide over its lifetime.7

With this win, AGEL will now have 15 GW capacity under operation, construction or under contract thereby accelerating its journey towards becoming the world’s largest renewables company by 2025. This award will take the Company closer to its target of achieving an installed generation capacity of 25 GW of renewable power by 2025 which in turn will see it committing an investment of Rs. 112,000 crores ($15 billion) in the renewable energy space over the next 5 years.

Based on the award agreement the 8 GW of solar development projects will be implemented over the next five years. The first 2 GW of generation capacity will come online by 2022 and the subsequent 6 GW capacity will be added in 2 GW annual increments through 2025. The projects will include a variety of locations, including a 2 GW single-site generation project that is tied for the rank of the largest single-site project announced globally. The solar cell and module manufacturing capacity of 2 GW will be established by 2022 and along with the existing 1.3 GW of capacity will further consolidate the Group’s position as India’s largest solar manufacturing facility.

References

  1. ^ https://www.adanigreenenergy.com/about-us
  2. ^ https://www.adanigreenenergy.com/solar-power
  3. ^ https://www.adanigreenenergy.com/windpower
  4. ^ https://www.adanigreenenergy.com/hybridpower
  5. ^ https://www.adanigreenenergy.com/solar-parks
  6. ^ https://www.adanigreenenergy.com/-/media/Project/GreenEnergy/Investor-Downloads/Annual-Reports/AR-2019-20.pdf
  7. ^ https://www.adanigreenenergy.com/newsroom/media-releases/Adani-Green-Energy-wins-the-worlds-largest-solar-award
Created by Asif F on 2020/07/13 16:12
     
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