Gujarat govt purchased electricity worth Rs 8,160 crore from Adani Power in 2021-22: Assembly told

The Gujarat government purchased electricity worth Rs 8,160 crore from Adani Power Ltd between 2021 and 2022 at tariff rates revised upwards from Rs 2.83 to Rs 8.83 per unit, the state Legislative Assembly was informed on Saturday. Responding to a starred question by Aam Aadmi Party (AAP) MLA Hemant Ahir, state Energy Minister Kanu Desai said that in 2021-22, the government purchased 11,596 million units of electricity from the company for Rs 8,160 crore.

The charge was revised upwards month-on-month in the range of Rs 2.83-Rs 8.83 per unit, he said. In 2007, the state government had signed an agreement to purchase power from Adani Power Ltd for 25 years at levelised tariff rates of Rs 2.89 and Rs 2.35 per unit, he said. The state government revised upwards the unit rates under its power purchase agreement from the company because of a rise in the cost of imported coal, he said.

Since the project was coal-based, said power company was not producing energy at full capacity because of an "unscheduled increase in the price of coal sourced from Indonesia after 2011", Desai said. "Considering this, a high-powered committee was formed by the state government. The government vide resolution dated December 1, 2018, approved the increase in power purchase rates by accepting the recommendations of the committee, with a few amendments, as a policy decision," he said.

Accordingly, a supplementary agreement was signed with Adani Power on December 5, 2018, which was approved by the Central Electricity Regulatory Commission through an order dated April 12, 2019, he said. A further revision was made in 2021 due to the increase in international coal prices, he said. Meanwhile, due to excessive hikes in prices of imported coal at the global level, most of the imported coal-fired power projects at the national level shut down generation, as the contract/supplemental agreement was not affordable, he said.

To avoid the said situation and to meet the growing demand of the entire country, the central government ordered to run the imported coal-based power project at full capacity under section 11 of the Electricity Act 2003 by order dated May 5, 2011, the minister said. In order to meet the state's power demand from all available sources, sufficient power was procured from Adani Power (Mundra) under the principle of merit order, he said.