In a major development for India’s power sector, Adani Power Limited has bagged a significant long-term contract to supply 1,500 megawatts (MW) of electricity to Uttar Pradesh. The deal is part of the state’s efforts to meet its projected power demand by the year 2033–34, and will span 25 years. This power will be supplied at a competitive tariff of Rs 5.38 per unit (kWh), emerging as the lowest bid in a recently concluded government tender.

Approval by the Uttar Pradesh Cabinet

The Uttar Pradesh Cabinet has formally approved the signing of a Power Purchase Agreement (PPA) between Uttar Pradesh Power Corporation Limited (UPPCL) and Adani Power. This agreement ensures a steady and long-term supply of power to support the growing electricity requirements of the state.

The decision follows a tender issued in October last year to source 1,500 MW from a planned 1,600 MW thermal power plant within the state. With the contract awarded, the remaining 100 MW of capacity from the plant will remain unallocated for the time being.

Meeting Rising Power Demand in Uttar Pradesh

Uttar Pradesh is forecasting a sharp increase in electricity demand. The state projects an additional requirement of 10,795 MW by FY 2033–34. This significant rise in energy needs has led the government to take proactive steps by entering into long-term agreements to ensure adequate and uninterrupted power supply across sectors.

To fulfill this requirement, the state launched a competitive bidding process inviting proposals from power producers. Adani Power emerged as the lowest bidder, thereby winning the right to supply a major portion of the proposed 1,600 MW project.

Tariff Structure of Adani Power’s Bid

Adani Power’s winning bid broke down the total Rs 5.383 per unit cost into two main components:

• Fixed Charges: Rs 3.727 per unit

• Fuel Charges: Rs 1.656 per unit

This structured pricing was the most competitive among all submissions, ensuring cost-effective electricity supply to consumers in the state.

Project Execution: New Thermal Power Plant in Uttar Pradesh

The electricity will be sourced from a new thermal power plant that Adani Power will establish in Uttar Pradesh. While specific project location details have not been disclosed, the plant is part of a 2x800 MW (1,600 MW) thermal generation unit, of which 1,500 MW has now been allocated to UPPCL.

The construction and operationalization of this plant will mark a significant investment in the state's energy infrastructure and create new employment opportunities, especially in construction, logistics, and plant operations.

Implications for the Power Sector

This deal has wide-ranging implications for the Indian energy landscape:

• Energy Security: Long-term PPAs like this one ensure energy stability and availability for large, energy-hungry states like UP.

• Private Participation: The award of this contract to a private player highlights the growing reliance on public-private partnerships in critical infrastructure sectors.

• Competitiveness: The successful bid underscores how competition is driving down tariffs, making power more affordable for states and end consumers.

Adani Power’s Expanding Footprint

With this deal, Adani Power continues to strengthen its leadership position in India’s energy sector. The company already operates a significant thermal power capacity and has been strategically expanding in key states.

This new contract further cements its presence in northern India, while aligning with the group’s long-term strategy of participating in state-backed infrastructure development through competitive and commercially viable offerings.

Future Outlook for Uttar Pradesh’s Energy Needs

The UP government’s approach of anticipating future energy needs and addressing them through early tenders and contracts is a forward-looking policy shift. With power consumption rising due to industrial expansion, urbanization, and increased rural electrification, such timely interventions are crucial.

The state is also expected to complement its thermal power strategy with renewable energy projects, in line with India’s national commitments toward reducing carbon emissions.

Conclusion

This power supply agreement between Adani Power and the Uttar Pradesh government is a landmark development in India’s energy sector. It not only reflects growing demand for energy in rapidly developing states but also the increasing role of private players in public infrastructure.

With a competitive bid, clear cost structure, and long-term assurance, Adani Power’s entry into UP’s power supply ecosystem marks a significant leap toward energy stability and reliability for one of the country’s most populous and economically vital states.

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