Adani’s ₹7,000 MW Solar Pact Faces Roadblock in Andhra Pradesh
A landmark renewable energy agreement between Adani Green Energy and the Andhra Pradesh government has hit a major hurdle. The ₹7,000 MW solar power supply deal, signed in 2021, is now facing delays due to a dispute over transmission charges.
Transmission Fee Sparks Tension
The state government is demanding a waiver on centrally-mandated transmission fees, which could raise solar power costs by nearly 40%. This fee is embedded in national regulations and cannot be waived without policy-level intervention. Andhra Pradesh insists the waiver was part of the original incentive when the deal was awarded.
Adani Ready, State Hesitant
Adani Green has confirmed its readiness to supply 4,312 MW of solar power immediately. However, the state has not begun drawing power, citing unresolved fee concerns. Multiple letters have been exchanged since April, with Adani urging the state to honor the agreement.
Deal Structure and Stakeholders
The agreement involves Adani Green, the Andhra Pradesh government, and the Solar Energy Corporation of India (SECI). SECI is responsible for ensuring compliance across all parties. The full deal covers 7,000 MW of solar generation, making it one of India’s largest renewable energy contracts.
Cost Implications
Without the waiver, the cost per unit of solar power could rise from ₹2.49 to ₹3.49, affecting the state’s budget and long-term energy planning. This increase may also impact future renewable energy investments in the region.
Legal and Regulatory Complexity
The waiver demand adds to Adani’s ongoing challenges, including regulatory scrutiny and international investigations. The company remains committed to delivering clean energy but seeks clarity on fee structures to proceed.
Investor Sentiment Remains Positive
Despite the impasse, Adani Green’s stock saw a 2.8% rise, reflecting investor confidence in the company’s long-term strategy. Analysts believe resolution is possible if central authorities intervene or if SECI renegotiates terms.
Broader Impact on Renewable Sector
This standoff could set a precedent for future solar deals across India. It highlights the need for transparent, enforceable contracts and policy alignment between state and central governments.
What’s Next?
Industry watchers expect further discussions between SECI, Adani, and Andhra Pradesh officials. A resolution may hinge on legal interpretations and central policy adjustments. Meanwhile, the delay affects power planning and energy targets for the state.
