Concall — clean across the call.

My first question is on curtailment — if you could share more color on how that is panning out and quantify the impact of curtailment in this quarter.

It has been in line with our expectations, and we do expect that by the end of this calendar year, especially from Khavda, we would not be having an issue of curtailment as was the case initially in quarter of the last year. However, in the current scenario, as was the trend in the past, a curtailment has an impact of in the range of 5% to 7% on our overall EBITDA as we speak. Gradually, as and when more transmission lines are going to come up, we do foresee these tendencies of curtailment to weed out. And, by the end of this calendar year, our expectation is that there should not be any curtailment, at least from Khavda, for all the capacities which we have installed.

Most projects which were classified as merchant renewable plants are now being mentioned as C&I renewable plants. Wanted to understand the rationale for it, and related to that, Adani Energy had a call where they mentioned that about 4 GWs of generation is contracted by them from Adani Green.

It is exactly in line with what Adani Energy said. In order to de-risk ourself and concentrate more on the project execution and operational excellence, on a long-term basis, we have contracted on an arm's length basis and with new approval of the Board on arm's length transaction, as well as we have ensured that we have a contracted capacity rather than taking the risk with Adani Energy Limited.

Is it fair to assume that what we were planning as merchant earlier is now effectively being sold as C&I to Adani Energy to de-risk ourselves on a long-term basis?

Exactly. So, what we have, we have taken off the risk of merchant capacities and the risk thereof, ups and downs. And, considering the recent tariffs, which were there on the long-term PPAs, this is the same return profile we have signed off with the Adani Energy.

Would this apply to the battery storage plant that we have operationalized as well? All of it is in effect contracted to them?

Yes. So, all that, which was supposedly merchant for us to de-risk it, we have tied up and going to tie up with AESL. The strategy remains the same on having a long-term returns and de-risking AGEL from it.

Any reason why we have made this structure to not to sell directly. So, why is Adani Green directly not selling to a C&I customer? And why is Adani Energy in the middle?

We concentrate more on operational excellence, project execution, deploying the CapEx more efficiently, and then de-risk any vagaries of market from long-term perspective, and get our long-term returns as per our expectations with which we are building the project. Ups and downs of the market, we are not taking into consideration, and hence to de-risk ourselves from those we have tied up with Adani Energy.

Currently we have 3.5 GW-hours of battery deployed. Target is around 10 GW-hours. So, the capacity is coming in the course of this year. All of that will also be tied up with Adani Energy?

Yes, it's all in line with our long-term strategy.

And the pump storage as well? I think we have a target of 5 GWs by 2030.

Within pump storage, there are certain projects which are already a direct tie-up that we have done. So, in those cases, there will not be any tie-up which will be going through AESL. But, in cases where it will be a merchant, we will continue to evaluate and do the contracts as we move forward in PDA in case of pump hydro. Pump hydro anyway except for the Chitravathi project is still about two years away.

For your agreements with AESL on both solar, wind, and the battery capacity — is this agreement for long term as in 20, 25 years, and is there a clause for price reset during this term or is it fixed for the entire 25 years?

So, in case of batteries, it is for 15 years and fixed for that period. And, in case of solar and wind, it is for 25 years and fixed for the price at a rate. So, there is no change which is expected.

Can you share at what price per kilowatt-hour did you tie it up for solar, wind, and battery separately?

See, as we mentioned, it is at a benchmark, which is going on in the market right now. So, there is no -- we cannot do. We both are listed entities, and there is an arm's length involved, Audit Committee involved. So, it is at a benchmark rate.

I had one question from my end on BESS. Just wanted to understand how the EBITDA trajectory evolves for FY27, and what are your overall plans for this segment beyond FY27 as well?

So, see, from the BESS perspective, we have given a thumb rule, which is going to apply for the overall EBITDA profile for FY27. It's about INR25 lakh to INR30 lakh per MW-hour in that range where the EBITDA would come in based on the capitalization that takes place over the next nine months of the year. The first contract has come in, which is 3.5 GW-hour, which was fully capitalized by May end. So, the full benefit of that EBITDA will now come in over the next nine months, plus as we capitalize more and more asset. We have given a target of at least 10 GWs upwards of cumulative BESS capacity, GW-hour cumulative base capacity, while the overall target till FY30, we have come out and said that we would like to do about 50 GW-hour of batteries till FY30 and that's where we, the ambition is.

What is our run-rate EBITDA for the operational portfolio plus already tied up BESS C&I portfolio?

So, our current run-rate EBITDA for the operational portfolio is about INR17,000 crore. For the expected for the FY27, it is about INR21,000 crore.

It was mentioned that 31% of the annual PPA requirement has been covered this quarter. So, how much of that is seasonal versus structural, and what needs to happen in the balance of the year to ensure full-year delivery?

So, see, this is more structural in nature. A lot of these PPAs, there is not always -- from a PPA perspective, the CUF is more important that we are achieving that CUF, and that is better in Q1, and it is as per the plan only. And, from that perspective, that is 31%, which is achieved today. We generally are about 100% on an every-year basis. So, that will continue to be there. Our last two, three years' average has been about 109%, 110%.

Given that several PPAs only become live when the central grid substation and transmission lines are ready, what is the timeline for the next 14 GWs of evacuation capacity additions? And what is the risk of holding these assets?

We do expect, by the end of this year, another 7 GW, which is going to come. That is this calendar year. And another quarter or two, the balances should be there online. We are keeping a very close monitoring on this evacuation so that we can reduce in case of any delays, we can reduce our capital cost on this impact. And, in case there is even a possibility of a week or two or a month coming earlier, we are in a position to utilize full capacity on it.

Is it fair to assume there won't be any open capacity for the targeted 50 GW capacity except for infirm power?

50 GW is too far, but, yes, you are right. As the strategy goes, we are going to de-risk ourself as we have started now.

On the PPAs with AESL, is it based on similar terms as with SECI bidding or on take-or-pay basis? Also for capacity going ahead that you plan to sign with AESL, what will be the terms?

Absolutely. It's on an arm's-length basis. Followed the standard PPA guidelines of SECI.

What is the Capex guidance for FY27 and FY28? Also, is the transmission capacity of additional 7 GW coming on stream by September 2026 on track?

So, see from a Capex perspective, the FY27 guidance is about INR42,000 crores of Capex to be done for FY27 because we are looking at about 5 GW of expansion in RE and 10 GW plus we want to reach as a cumulative capacity in batteries. So, from that angle, it would be that, in that range.

The 5 GW capacity addition target in FY27, does that include the 500 MW PSP that is expected to come up?

No, Shirom. That -- the BESS capacity and the pump storage capacity is excluding.

On the realizations that you are getting on the infirm power, is that sold on the merchant market? For 1Q, could you share what the average realizations would have been?

Yes. The current is in line with what the merchant power is selling through, including the RECs. It varies, but it is in the range of INR2.5 per unit.

10 GW plus hours of battery — how should we think of phasing over the course of the year? And question two is on economics: how should we think of cycles and unit economics through the course of this year?

Battery energy projects are relatively new in India. So, there is a deep commissioning phase and a stabilization phase. That is why we are not giving specifically quarterly guidance on when we would get commission. The projects are at a relatively advanced stage of construction, and we may start commissioning activities very soon. The storage project works on an arbitrage model — you are able to store power when it is relatively cheaper, around INR2.5, and then you are able to monetize that during evening hours when the market gives you better prices. The numbers tend to be anywhere between INR4 to INR5 is the arbitrage that you tend to get for these projects, and they are economically viable arbitrages on which we are working.

Earlier we had a strategy that we'll go ahead and commission projects even though on a merchant basis so that we can optimize on the transmission cost. Does that strategy still continue in the new arrangement?

The strategy remains to optimize all costs and get the maximum profits on it. You have to appreciate the fact that our new projects which are going to do across, we are taking into consideration how the evacuation is mapped, when is it likely to come, and that's how our project strategies are as of now. Taking into consideration the PPA requirements, which we have already signed on and our commitments on delivering the same. And, of course, from the transmission part, it is there, but you also have to appreciate that, in the last one or two years, there has been certain policy interventions or waiver which were going off on the subsidy part, whether it is with respect to the ISTS charges or with respect to ALMM versus ALCM. All this is taken into consideration when we have this annual five-year plan with us.

The rooftop market has picked up quite meaningfully — 8 GW last year and probably 12 GW this year. How should we think of this? Is this eating away the market potential from the utility segment?

If you look at India's energy demand, especially the electricity demand, that's been growing, it is in line with our GDP growth. We don't foresee that distributed generation of a rooftop is going to disrupt the overall market of energy requirement in this country. Both can sustain its growth in its own selves. While the solar energy has certain role to play during the daytime, you have evening peaks and night and early morning requirements too, which a rooftop at someone's house or C&I segment will not be able to sustain. In our view, we see it as a very good sign in the way people are embracing clean energy. And we don't foresee any major challenge to utility segment, C&I, and those who are primarily bigger consumers of energy per se.

There is a risk of some of these battery fires like we've seen across the world. Is that a real risk? And do we get any warranties or cover from the battery provider or third-party insurance?

What has been circulating in the video is a bit misleading. What got fired was not the batteries, right? What got fired actually were what is called PCS or inverters because there was what is called IGBT failure. So, it's not a battery fundamental risk. The energy density of LFP is so high that you are packing in a lot of energy in the 20-foot container. So, you have to maintain a lot of safety protocols. We have invested in technology and vendors with the highest levels of safety norms, some of them actually comparable with what goes in Europe. Insurance, like it is covered for any other equipment, it is covered by standard insurance policies, including for battery projects. There is a very rigorous process by which the insurance agents evaluate and then they underwrite the insurance policies.

Do these contracts with AESL have any exit or termination clauses in case AESL is not able to sell that power at the right price?

These contracts are on the basis of the SECI PPA, the grander PPAs. And there is no termination on convenience per se in those contracts. These are contracts which have been signed between parties. These are primarily signed from AGEL's standpoint to de-risk the ups and downs of the market and get the predictable return for which we have built our assets.

AGEL's strategy to early commission these assets to take benefit of ISTS waivers, ALMM waivers — the advantage of that INR0.50 saving in transmission cost, where does that sit now after this? Will it still be with AGEL? Will it be with AESL?

From AGEL's standpoint, we have de-risked any pluses and minuses on that part. It is very difficult to predict how these advantages will pan out in future in the next 25 years. And I think that is the risk which AESL has taken. AGEL has been insulated from it. We are, this is the arm's length transaction, are getting the predictable return for which we have built these projects.

Are there any other similar large sites that we are evaluating which could come up in the near term comparable to Khavda?

Of course. We are seriously evaluating many large sites and are working on it. Khavda experience has been phenomenally good for us and given us the confidence of executing and operationalizing these large projects. And I think, basis this experience has given us immense confidence on even working on those. So, you are right, we are working very seriously towards other large sites too at the places where the radiation levels are as good as possible in this country.

You've added about 1.97 GW-hour capacity in 1Q. Does that imply that your closing capacity at the end of FY26 would be about 1.6 GWs?

If you had seen it was like installed as well as commissioned executable capacity was mentioned. So, installed capacity was 1.6 GW, and this year, this quarter we have installed about 1.9 GW. So, the total capacity installed is at 3.5 GW-hour.

Balance 4.5 GW-hour that you're looking to add — are there any risks on delays there? And is the supply chain secured on these BESS projects?

We are committed to have 10-plus GW in this financial year, besides what has happened in the past. As we speak, we are committed, and we are very clear to achieve this. We don't -- while the risks are always there, but, with our experience of the past, we don't foresee much risk in achieving these capacities in this financial year for sure.

The realization of the tie-up with AESL would be in line with the long-term PPAs that we already have tied up — would that understanding be correct?

Absolutely, Shirom. It is definitely in line with the long-term PPAs which are there.

What is our Capex cost of batteries? And similar to what you answered, how many years of warranty or guarantee do they come with?

The cost, of course, is a function of so many moving pieces: rupee, dollar exchange rate, and other things. But, at this stage, I think a reasonable good thumb rule would be INR1.5 crores per MW-hour of installed capacity. So, that's a good number to work with. And it may change a bit depending on whether it's a two-hour system or a four-hour system.