Adani Group Dominates Long-Term Coal Power Contracts Amid Controversy
Overview of Adani's Contract Wins
New Delhi: The Adani Group has successfully obtained all long-term coal power purchase agreements awarded by states governed by the BJP since the Central Government resumed these contracts in 2024, as reported by The Reporters' Collective.
According to the findings, out of 12 long-term power purchase contracts issued between March 2024 and January 2026, the Adani Group secured all eight tenders from BJP-led states, either independently or alongside other bidders. The group also managed to win one contract from the four tenders released by states led by opposition parties. Notably, in West Bengal, which was under Trinamool Congress rule, the company withdrew from the bidding process despite being eligible.
While the report emphasizes that correlation does not imply causation, it references earlier findings indicating that some BJP-ruled states may have altered tender conditions to favor the Adani Group.
Financial Implications of the Contracts
The contracts are projected to generate over Rs 13.27 lakh crore in revenue over the next 25 years. This estimate is based on the tariffs established through the bidding process and the duration of the contracts.
The revenue calculations assume that the power plants will operate at 75% capacity throughout the year. The annual cost for each power purchase agreement was determined by multiplying the anticipated yearly electricity generation by the tariff set during bidding. Although the contracts stipulate that the government must adjust revenues to account for inflation over the projects' lifespan, these factors were not included in the revenue estimates, making them conservative. Additionally, the analysis presumes that electricity costs will remain stable for the entire 25-year term, disregarding potential future increases in fuel, transportation, or other expenses.
Long-Term Agreements and Their Structure
These agreements obligate states to procure coal-based electricity from private producers for extended periods, often exceeding two decades. Some contracts also require the inclusion of renewable energy alongside thermal power, ensuring private companies a steady revenue stream throughout the projects' duration.
In response to inquiries from The Reporters' Collective, Adani Power refuted claims that political factors influenced the awarding of contracts. The company asserted that the power purchase agreements were obtained through competitive bidding, with tariffs sanctioned by the relevant electricity regulators to ensure transparency.
Adani Power emphasized that it was not the only winner in all BJP-ruled states and had also secured contracts in non-BJP states.
Shift in Thermal Power Contracts
The report indicates that long-term thermal power contracts saw a significant decline during much of Prime Minister Narendra Modi's first and second terms due to concerns regarding sluggish economic growth, India's climate commitments, and the rapid growth of renewable energy.
However, this trend reversed in 2024 as policymakers aimed to guarantee a reliable electricity supply in response to increasing demand. Industry experts pointed to the inconsistent nature of renewable energy and energy security concerns as primary reasons for the renewed emphasis on coal-based power generation.
In August 2024, the Central Government announced plans to add 80 gigawatts (GW) of thermal power capacity by 2031-32, marking a 36.8% increase over the country's thermal power capacity in 2024.
Controversies Surrounding Tender Processes
The Maharashtra government was reportedly one of the first to issue a tender that combined thermal and solar power procurement from a single entity. Some companies raised objections to this tender, claiming it favored firms capable of supplying both large-scale thermal and renewable energy, ultimately leading to the Adani Group winning the contract.
Previous reports indicated that the Maharashtra tender, along with a similar one later issued by the BJP-led Rajasthan government, was structured in a way that allegedly favored the Adani Group, with the Rajasthan tender eventually being canceled.
The report also noted instances where state governments provided concessions to facilitate thermal power projects. For example, in Assam, the state government committed funds to purchase surplus electricity from a proposed 3,200-MW Adani thermal power plant, while in Bihar, the company was allocated approximately 1,000 acres of land for a thermal power project at a nominal lease rate of Re 1 per year.
Recent Developments in Thermal Power Bidding
In Madhya Pradesh, Adani Power was one of the successful bidders for a tender involving 4,100 MW of thermal power. The company later secured an additional 800 MW through a unique greenshoe option, which allowed the state utility to procure extra power from an existing winning bidder without the need for a new auction.
The report noted that the additional capacity was initially offered to Hindustan Thermal Projects and then to Torrent Power, both of which declined the offer. Adani Power accepted the offer on September 8, 2025.
Additionally, the Adani Group obtained a 2,500-MW round-the-clock power supply contract in Maharashtra, which mandates that 51% of the electricity must come from traceable green energy sources.
Future Outlook for Thermal Power Sector
The revenue estimates assume that power plants will operate at 75% capacity throughout the year. These calculations do not consider future increases in tariffs, fuel costs, transportation expenses, or inflation-linked adjustments, making the estimates conservative.
With the Central Government aiming for a significant expansion of coal-fired power generation, the thermal power sector is expected to remain a crucial area for growth. In communications with investors, the Adani Group described the government's thermal power expansion plans as a substantial business opportunity for financially robust and experienced private-sector players, noting that the target for additional thermal capacity could increase from 80 GW to 95 GW.