Power Technology

Daily Newsletter

08 August 2023

Daily Newsletter

Adani reaches financial close on Mumbai green HVDC link project

The Green HVDC project will directly inject 1GW of renewable power into the city.

Adani Energy Solutions (AESL), a subsidiary of Indian conglomerate Adani Group, has reached financial closure for its $1bn (Rs82.81bn) green HVDC (high-voltage direct current) link project that aims to supply more renewable energy to the grid in Mumbai in the Indian state of Maharashtra.

The plan calls for further greening of the grid while supporting the rising demand for electricity in Mumbai.

This credit facility was provided by a consortium of nine international banks: DBS Bank, Hong Kong Mortgage, Intesa Sanpaolo, Mizuho Bank, MUFG Bank, Siemens Bank, Société Générale, Standard Chartered Bank and Sumitomo Mitsui Banking.

The city’s electricity demand is expected to reach 5GW by 2025 from its current peak demand of 4GW.

With only 1.8GW of embedded generation, the existing transmission corridors face capacity constraint risks.

The HVDC transmission link can help to enhance grid stability by offering an interface with the state and national grids. This link will bulk-inject 1GW of renewable power into the city for an uninterrupted future power supply.

AESL has committed to increasing the share of renewable energy in the overall energy mix of the city to 60% by 2027.

The 80km project offers upgraded transmission technology while managing all the complexities involved in development. Construction work will begin in October 2023.

HVDC technology is ideal for islands where submarine cables are used for transmitting power. It is able to transmit more energy per square metre while reducing energy losses.

AESL is the only private company with experience in installing HVDC transmission lines in India.

Managing director Anil Sardana stated: “This link is the need of the hour for the city and will support its growth aspirations. It showcases our commitment to offering Mumbai a brighter and greener future. The project will help accelerate the city’s decarbonisation and its net-zero journey.

“We would like to express our sincere appreciation to our banking partners for their continued support in completing the transaction smoothly and for their enduring faith and confidence in AESL.”

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.