State Cabinet decision: Adani Power to set up 1600 mw thermal plant in U.P.

The Adani Group will set up a 1600 MW super-critical thermal power plant in Uttar Pradesh with the company identifying land for the purpose in Mirzapur district under the DBFOO (design, build, finance, own & operate) model.

The state government during a Cabinet meeting chaired by chief minister Yogi Adityanath on Tuesday approved the purchase of 1,500 MW power from a 1,600 MW thermal project through a 25-year bid.

Earlier, in May last year, the Yogi Cabinet approved the proposal for setting up two units of 800 MW each in Anpara in partnership with the NTPC. Also, in July 2023, the government decided to set up 1,600 MW thermal plant in public sector at Obra.

The government decision to set up plant at Obra came within less than three weeks of the UP Electricity Regulatory Commission (UPERC) lifting the ban it had put in July 2019 on the state installing any new thermal plant or signing any long-term power purchase agreement till December 2022.

Briefing media persons of the Cabinet decision, energy minister AK Sharma said final bids submitted by five companies on October 10, 2024, saw Adani Power’s offer of ₹5.383 per unit emerging as the lowest, securing the award over other bidders, including MB Power, Lalitpur Power Generation Company, Haldia Energy and Torrent Power.

“The electricity is to be procured under a long-term agreement, helping meet the state’s rising energy demand,” he said. Explaining the DBFOO, additional chief secretary, energy, Narendra Bhushan said under this model a developer has to arrange everything right from land to various clearances with the government acting only as a facilitator.

“The Adani Power is currently identifying land in Mirzapur,” he said, adding, “The proposed plant will start selling power to the UPPCL from 2030 onwards under a long-term power purchase agreement of 25 years.”

As per the bid terms, Adani Power will supply 1500 MW of electricity from its new 1600 MW ultra-supercritical thermal power project to Uttar Pradesh. For comparison, Maharashtra recently secured a similar arrangement at ₹5.39 per unit from a 1446 MW plant.

“The MoU paves the way for a major private sector investment in the state’s power sector and is expected to contribute significantly to the energy mix by 2030-31. The bid comes amid growing emphasis on ensuring reliable and affordable electricity for the state’s industrial and domestic need,” the energy minister said.

He also noted that the procurement deal is more economical than similar agreements signed with other states and even cheaper than existing contracts with public-sector power plants.

The minister said, “The selection process began with a Request for Qualification in July 2024, attracting interest from seven companies. Five of them submitted financial bids, and after negotiations, the lowest bid of ₹5.38 per unit—comprising ₹3.727 in fixed charges and ₹1.656 in fuel charges—was accepted.”

The U.P. government’s efforts to augment thermal power capacity in the state are being seen as long-term planning to meet the future power demand that is increasing at a fast pace in the state.

While lifting the ban from adding thermal power capacity in the state, the UPERC observed that from 2029 onwards, power deficit on RTC (round-the-clock) basis would require a considerable enhancement in installed capacity, though a major part of it can be met through RE (renewable energy) sources.

“Therefore, upon review of the power supply demand situation, the commission allows the UPPCL long-term tie-ups through coal, hydro, nuclear and gas depending upon fuel sources availability to meet its power demand on round-the-clock basis from 2029 onwards and tie-ups should be considered keeping in view the lead time required for setting up and commissioning such power plants so that the RTC deficit from 2029 onwards is effectively met,” the commission said in order dated June 23, 2023.