Adani’s Sri Lanka wind project offers cheapest tariff in island nation
Posted on June 11th, 2024
Written by Rajesh Kurup Courtesy The Financial Express
This offer is significantly lower than the tariffs from existing renewable and traditional energy sources in the country, which range from 8.75 to 26.99 cents, according to a compilation of power tariffs.
Adani Group, which is setting up two wind power projects in Sri Lanka totaling 484 MW, has offered to provide renewable power at LKR 24.75 per unit (about 8.25 cents), much lower than existing tariffs in the country.
This offer is significantly lower than the tariffs from existing renewable and traditional energy sources in the country, which range from 8.75 to 26.99 cents, according to a compilation of power tariffs.
The Sri Lankan government has entered into a 20-year power purchase agreement (PPA) with Adani Green Energy (AGEL) for power from the wind farms in Mannar and Pooneryn. AGEL is the entity through which the Indian conglomerate is setting renewable power projects in Sri Lanka.
In November, AGEL announced plans to make an initial investment of $750 million to set up the wind farms in Sri Lanka and export power to India, in addition to supplying it within the island nation. This arrangement is similar to an agreement AGEL has with Bangladesh, where it supplies power from India.
The projects in Sri Lanka are expected to commence operations within two years from the date of approvals.
For Sri Lanka, these projects will help meet the country’s power demand, which is projected to grow at an annualised rate of about 5%. Additionally, they will support the country’s sustainability goal of achieving 70% renewable energy generation by 2030 and carbon neutrality by 2050.
The Adani project will also displace fossil fuel imports worth $270 million annually.
AGEL, in which French energy giant TotalEnergies holds a 19.7% stake, has set a target of 45 GW of renewable energy capacity by 2030 to cut emissions and help India meet its carbon neutrality target. AGEL currently has 8.3 GW of operational renewable energy capacity, with another 12.118 GW nearing construction or under execution.