Billionaire Gautam Adani's renewable energy company is targeting to set up 45 gigawatts (GW) of renewable energy capacity by 2030, as it looks to cut emissions and help India meet its carbon neutrality target.
Adani Green Energy Ltd has 8,316 megawatts (8.3 GW) of operational renewable energy capacity and another 12,118 MW either nearing construction or under execution, sources close to the company said.
The target is to take this 20,434 MW (operational plus under execution projects) to 45,000 MW or 45 GW by 2030, they said, adding AGEL is looking to build roughly 3 GW of capacity to generate electricity from solar and wind energy every year.
French energy giant TotalEnergies holds a 19.7 per cent stake in AGEL. Recently US investment firm GQG Partners picked a 6.8 per cent stake in the company and Qatar Investment Authority (QIA) another 2.8 per cent.
AGEL has a clear sight of how it will fund the renewable capacity addition, they said without giving details.
The capacity AGEL is building is about 10 per cent of the renewable energy capacity that India is targeting by 2030 in the transition towards achieving a net zero carbon emission target by 2070.
Besides AGEL, other industry leaders like Tata Power, ReNew Power and Acme Solar and state-owned NTPC, has announced big plans to transition to green energy.
At the time of investing in the company, GQG's Rajiv Jain had stated that Adanis are efficient. "For example, they get paid in 60 days versus 260 days for a competitor. Given their efficiencies, it is our view that the company will generate higher returns." In terms of revenue visibility, there is a 25-year fixed-tariff power purchase agreement (PPA) with an average portfolio tariff of Rs 3.02 per unit, sources said.
Despite concern over AGEL's valuation - which is 32 times its book even after correction - analysts believe the company's equity will be continuously recycled, as the cash flow generated each year will serve as an equity contribution for the next project. As a result, the return on equity is expected to keep expanding.
Green energy, which is derived from natural sources like wind and sunlight, is abundant in nature and does not release greenhouse gases. AGEL is tapping into this source of energy abundantly available in states like Rajasthan and Gujarat.
Rajasthan is becoming one of the nation's most vital solar energy centres. A transmission corridor is taking shape in its western part with 1.25 lakh hectares of government land being available for setting up solar plants.
AGEL is one of the largest investors in Rajasthan's energy sector. Adani Renewable Energy Park Rajasthan Ltd (AREPRL) - a joint venture of AGEL and the state government's nodal agency for developing non-conventional energy sources RRECL, is developing solar parks with a cumulative capacity of 10,000 MW in a phased manner.
To develop wind projects, the company evaluates regions with wind resource potential across the country. It has installed many wind masts in resource-rich areas like Mundra in Gujarat and Ratlam in Madhya Pradesh, they said.
AGEL's wind power plants have an operational capacity of 1,201 MW.
Wind and solar energy have variable supply, posing a challenge to large-scale adoption of renewables. Hybridization of wind and solar reduces this variability due to the complementary nature of their generation profile - solar generation is higher during the day, while wind generation can be higher at night.
Hybrid projects have higher capacity utilization and enjoy the benefit of a reduction in costs associated with sharing transmission lines.
AGEL's solar-wind hybrid projects have an operational capacity of 2,140 MW, sources said.
As per a study, the per-capita emission in India is 1.8 tonnes of carbon dioxide. Compared to the United States (14.7) and China (7.6), it is very less. Still, India stands at the third position globally.
Projects like ones taken up by AGEL is helping the nation reduce its carbon footprint.
AGEL's renewable projects generated 14.8 million MWh in FY23, leading to a reduction of 13.5 million tonnes of CO2, equivalent to the emissions of 8.9 million cars, sources said, adding the company has been ranked first in Asia and among the 'Top 10 RE companies globally' by ISS-ESG in its ESG assessment.
AGEL is already the largest solar developer in the world and on its way to becoming the largest renewable company in India and among the most formidable renewable energy players in the world.