Grid availability has been low since the last 2 quarters. How much of it has impacted generation for solar, wind and hybrid as well? What would have been the generation if availability was 100%?
Grid availability has been impacting us because the schedules are not being met and there have been delays in the grid augmentation. We were expecting in the last quarter, some 2 to 3 gigawatts of augmentation, which has not taken place. However, as we speak in this month itself, we have been able to augment -- there has been an augmentation of 1 gigawatt, which is helping us, and there is no grid curtailment as far as Rajasthan is concerned on that account. At Khavda, the challenge remains - we were expecting it to be there in the last quarter that the augmentation will take place, however, as we see in the coming month itself and in this quarter, we are expecting 2 to 3 gigawatt of augmentation from Khavda itself for evacuation of power. There would be further augmentation at the end of March by another 1 gigawatt of the lines. Because of the seasonality and certain ROW issues, there have been delays in the last quarter by agencies who are executing this grid augmentation.
You're selling about 46% on merchant. So how much of it was infirm power? And when can we expect that to be sold on PPA?
On the merchant aspect, first of all, the infirm power on an overall basis of returns is an add-on to what our expectations on return are on day one. So by nature, whatever we earn on it is in addition to what we have envisaged on the return part. The second aspect is in our strategy, it has been to maintain around 20% merchant. And then there is infirm power, which is getting -- most of it also being utilized once the PPAs are going to be operationalized. We do expect in the coming year itself more than 1 to 2 gigawatt of it, which is possible. Some of the merchant power we are also going to utilize in the coming year for our input power for our battery storage.
Can you throw some light on the curtailment part? Why we didn't have this issue in the last quarter? And why is it coming up now in this quarter? How much is the gap in terms of the evacuation?
The curtailment was always there. It was not that there was no impact of the curtailment in the last quarter. One of the things which has helped us in the last quarter is the wind has been an important source of our revenues, which has been much better in that particular quarter. And wind generally comes on a timing where the curtailment is much less. It impacts solar to a large extent than to the wind part of it. In this particular quarter, what was supposed to come in this particular quarter has been delayed by 2 months. We are expecting relatively better as this quarter ends on the curtailment part.
On revenue realization, we see in the presentation that grid availability is down again this quarter. What are the factors that are impacting the grid availability, especially for solar?
Predominantly, our expansion is coming at 2 places - Rajasthan and Khavda. At both these places, there has been an impact on the grid availability for our new projects. In Rajasthan, we have been impacted. However, in this particular month, 1,000 megawatts has now been released, and there is no curtailment on that. In Khavda the curtailment remains, and we were expecting 2 to 3 gigawatt of transmission augmentation. Since there has been a delay as far as the grid enhancement is concerned, that is the impact which has taken place in the last quarter. We also expect that additional 1 gigawatt may be coming by the end of this quarter for evacuation from Khavda.
Government has come up with these norms of virtual PPAs. You guys have the largest land bank and grid connectivity. Do you plan to participate in those opportunities in the C&I space?
We keep our options open, Nikhil, but it all depends on the profitability on each and every aspect when we go out for these PPAs. We keep our options open on all the opportunities which come.
Government has announced that they're looking to cancel this 40 gigawatt of solar PPA. Can you quantify your exposure?
Much of our exposure is not very high in the 40 GW. This news about canceling the PPAs, let's see where happens. On one side, we do believe that there would be by canceling of these LOAs, there would be connectivity released in the system. But on the other side, we all have bid with a certain return expectation and are committed for that price. While I leave it on to the judgment of those organizations, which has signed the LOAs with us, our overall exposure on the type of LOAs you are saying is very, very small.
Regarding raw material cost now that silver prices are really going up - what could be the impact? How much silver contributes to our total cost? How do we plan on hedging?
There is always -- at the end of the day, these are commodities, which will keep on going up and down. And when we make a business case, we don't take into consideration the lowest cost of commodities. We take a very conservative view on the cost of commodities. About 60% of the solar capex on a project is the module price. We have the advantage in the future to have our own module production. From a wind turbine, majority of the cost comes from a wind turbine in case of wind projects. There, too, we have our group company manufacturing the India's largest 5.2-megawatt machines and even going for other types, too. To a large extent, we have this price risk being mitigated in future. When we make a business model, we now go by the most aggressive pricing as far as the commodities are concerned.
What's the target time line for us between when the tariffs are decided and our equipment being ordered? What's the time lag between these 2 things?
If we are adding 5 - 6 gigawatts in a year, one of the advantage of having such an amazing speed and the scale of working is that we are impacted less by the commodity variations. If you are executing a project in 18 months, then the vagaries of commodities generally impact you a lot. Since we are very fast in our project execution, and then more importantly, after execution, taking the revenues out from it so that our revenues come early - we don't have a typical 18 months period for even 500 megawatts, we completed it in 1 month's time on an average. The impact is much, much less.
What's the time lag between when we are able to fix the tariff for our project versus when the equipment cost is decided?
Whenever we have a project in place, first of all, we are very clear that, that project where is the land and where is the evacuation. So once we have those elements in place, then it is a matter of a project execution. Our philosophy is that the balance of systems - 55% to 60% is the module pricing. We complete the balance of the systems very quickly. We get the modules in place and with our high speed of execution, we do actually get the revenues out in the quickest time. If we are executing 500 megawatt of commissioning, we are deploying 500 megawatts of modules in a month's time on an average. So the time period is very short in this particular process.
Due to grid availability issues, evacuation is not possible and curtailments are creating issues. What is lagging? What is the plan of battery storage in terms of capacity of the solar to battery storage? And on EPC, your framework has changed - what is the intent of the shift to outsiders?
On the evacuation part, there is a gap and there is a delay, which has impacted us. The evacuation of 2 to 3 gigawatts you can't build a 2 to 3 gigawatt in 1 day. We have to time it up. 2 to 3 gigawatt in Adani's framework is virtually twice or more than twice by a normal or a top renewable company. We are talking in gigawatt terms and not in megawatt terms. There will be always a challenge of on the day it comes, how much we can evacuate. Regarding battery storage, 3.5 gigawatt hour of battery storage is what we are committed to commission in this particular financial year, and we will do more than twice of it in the coming financial year. This battery storage will act as absorbing the power, which otherwise would have been curtailed on a short-term basis. Regarding EPC, we are the best and we continue to remain the best. But for the scale at which we are going to go for, we do need other EPC contractors at a scale which can work with us. We don't call them contractors. We call them partners who will co-develop these projects with us. We have a road map of 30 gigawatt in the next 4 years.
Silver prices during this time have actually gone 3x. Silver for our projects is around 10%, 11% of the total cost. What does it really do to our IRRs? These are 15%, 16% IRR projects. How do we deal with it? Is there a way to pass on these prices because otherwise, the IRR really takes a hit?
I don't know why you're saying we are not answering it very clearly. Let me answer it very clearly. When we bid the project, always take into consideration the vagaries of commodities. We have bid these projects a long time back, not at the current stage itself. At any stage, we have a clarity on what can go with the commodities because it remains a commodity. To the extent we can hedge, it's one matter, but we take that into consideration on our return expectation. That is why you will appreciate the fact that whenever you see the tenders being bid and all those factors, you will not find us at a certain level, which people question as well as the tariffs are concerned. So we are very, very conservative in our costing. We are very focused on our return expectation. Now today, the silver has gone up. But in the past, the silver was not that up. And in future, too, there is no guarantee that silver will remain at this particular level.
As per our current capacity, operational capacity of about 17.2 gigawatts, what will be a run rate EBITDA?
So for end of FY '26, we are projecting a run rate EBITDA of INR 17,000 crores, including other income of about INR 1,000 crores. And run rate EBITDA from power supply would be about INR16,000 crores.
Why is the revenue going down despite our capacity is increasing? As of September end, we had 16.7 gigawatts which is operational. When I divide the revenue with the operational capacity, it is less than INR0.65 lakh per megawatt. What am I missing here? Is there some one-off?
Bhavik, you have observed it right. It is not missing. It is the seasonality. There are certain things which have not helped in the last quarter when this capacity has been augmented. Most important of it is the seasonality impact. As you would otherwise also be aware of that the wind for that matter has been particularly low in this last quarter. Coupled with it, the curtailment impact has also not helped the cause in overall per se. And the market pricing for the merchant power has also been subdued in the last quarter. However, in this particular quarter, we are looking at better market pricing as far as the merchant power is concerned. The curtailment is also going to reduce substantially with the addition and augmentation of the grid.
Regarding our interest costs, which has shot up, how much of it is on account of the currency depreciation, which you're having?
We don't have any impact on appreciation of rupee because we are fully hedged in terms of principal as well as interest. So whatever is the mark-to-market that gets generated on interest or currency depreciation gets adjusted out of the hedge benefit that we get. The interest cost is mainly because of the capacity addition that has come up in the last quarter or in the last 9 months. There is no impact that rupee depreciation on this.
Do you have any guidance for the current year and the next year in terms of revenue and capex both?
Capex will be higher than what we have done this year by the end of Q4. We are looking to grow the capacity by FY '30 to 50 gigawatts. The capex will continue to be in the range of about INR35,000 crores to INR40,000 crores in terms of capex that we will do for the next year. Our run rate EBITDA (as of end of FY26) would be in the range of INR16,000 crores for power sale and overall EBITDA would be INR17,000 crores. Revenue at 92% of EBITDA margin will be in that same range of INR18,000 crores to INR19,000 crores for end of this year. For next year actual revenue would be in the range of about INR17,000 crores to INR18,000 crores.
Were there any meaningful changes in tariff mix for the quarter that impacted the revenue per unit of sales?
No, there was no change in tariff mix per se, but since the merchant power pricing has been subdued in the last quarter, you would see that the revenue is not in line with what has been there in the past. There's no change in the tariff mix per se. The merchant power tariffs have gone down in the last quarter.
On the profitability, we wanted to understand the breakdown of the margin. How should we think about steady-state operating and maintenance cost per megawatt, especially as the portfolio scales?
From the perspective of solar, the O&M cost that we take is about INR3.5 lakh to INR4 lakh per megawatt. And in terms of wind, it is INR6 lakh to INR6.5 lakhs per megawatt. As we are growing, we have some assets which are very small in nature. When you average it out, those assets have relatively higher maintenance cost. Since we are expanding in areas like Khavda and Rajasthan, which have a larger capacity, especially in Khavda, where we are growing with 30 gigawatt at a single location, these costs on an overall basis are also going to reduce.
On wind - when we calculate wind PLFs we see them down as well. Would you attribute that largely to wind speeds or again to grid curtailment?
No, no, no, it's absolutely wind speed. Nikhil, it is wind speed, and that's not only for us, but you can look around, the wind speed, particularly in region like Khavda has been the sole factor for our lower PLF at Khavda. In the last half year -- in the H1, we have seen much, much better wind speeds than what we have experienced in the past. However, in the Q3, because of the seasonal change, we have seen a dip. We hope that things are going to recover on this. But our operational capabilities are the best as of now.
Grid constraints are beyond our control. Do we see a risk that next year, we would be able to do 5, 6 gigawatt again addition?
While I agree with you that grid augmentation is not in our scope, we are very professional in bringing our power to the pooling stations - to the substations at the grid level. With the plans which we have seen of augmenting predominantly from Khavda, we do expect another 10 gigawatt to be added in the next year. The current forecasting is that it will be added by the end of this calendar year itself. The other factor which is going to help us is huge deployment of battery storage at Khavda. By the end of this financial year, we are going to commission India's largest or one of the world's largest at a single location battery storage project. We also intend to enhance the capacities maybe more than 2x of what we are currently doing in this financial year, in the coming year.
On regulation - we saw CERC release a draft regulation on DSM mechanism tightening. Do you see tighter DSM norms for wind and solar?
Yes, there is an intention from CERC to make it tighter. Industry has made multiple representations how it is not necessarily suitable for renewable sector where a lot of it is based on what weather is there or what it gives us. So similar thing which is there for thermal cannot be an ultimate goal for renewable. However, as I am augmenting storage at these locations, for me, this is not a challenge. Rather, it's a business case for me for ensuring that I'm able to capitalize on it. So we are not necessarily concerned about this particular regulation too much.
How much battery capacity you are putting up? And what is the tentative time line for setting it up?
In this particular financial year, we are going to commission 3.5 gigawatt hour of capacity. And like we said that we do expect and we are aiming to add more than twice of it in the coming year. As and when it is finalized, we will share with you.
Will you continue to maintain this merchant capacity for the medium term?
We obviously take a very opportunistic view on this. This helps me in my arbitrage opportunity on storage. This merchant capacity would be able to feed our storage plants in Khavda, and I'll be able to take the better pricing in the evening peak markets with this. So there is a significant flexibility. We always keep our options open to deploy this in PPAs where I'm able to make a reasonable return.
Are you seeing any curtailment in existing long-term GNA? Is it possible to define the impact in terms of long-term GNAs? Is there any compensation for this curtailment under the long-term GNA?
Mohit, we are not experiencing any curtailment on a long-term GNA. So it is not right on me then to further dwell on that question, but we are not facing any challenges on the long-term GNA.
How much contribution does silver have in our total cost in a solar project?
On a largely basis, the module is 55% plus/minus 5% on the overall project. And in a module, my understanding is that it is between 15% to 20% as far as the silver is concerned. So on an overall basis, it's not going to make or break the light from the module part is concerned. But yes, these recent increases in the silver and otherwise do impact it on a short-term basis. But these are commodities and whenever we make a business model, we are very sensitive about what can happen to the commodities rather than being very aggressive about it.
Can you just quantify your merchant realization when it comes to both solar and wind for the quarter and comparable quarter for the previous year?
During the current quarter, our solar merchant realization was INR2.20 per unit. And for the last quarter, it was -- for Q3 '25, it was INR2.82 per megawatt per unit. And for the wind, it was around INR3.5 for this quarter, while it was INR4.15 for last.
How strategic will the battery and the pumped storage be in the Adani Green's portfolio over the next 4 to 5 years?
Kalpit, very strategic. Very, very strategic if that is what can satisfy you. We are going to deploy, operationalize and take full advantage of it. We are also having the advantage of an input solar available with us at a time where we can co-locate the batteries as well as the solar projects. The pumped storage, we have already announced. We are on track. In this particular quarter too, we have announced that our Chitravathi project is on track to come in the coming -- in this calendar year itself. We do believe that renewable power from a stand-alone solar is going to shift towards a point of RTC power where more and more organizations and including the government will look towards a certainty of this power during the peak time or during -- as a round-the-clock power.
For the next year capex of INR35,000-40,000 crores against INR16,000 crores recurring earnings, how are we planning the balance? Through debt raising?
For us, we are constantly into the debt raising phase because of the under construction projects that we have. A lot of that is already sanctioned for the next year's phasing also because we continue to raise debt at a pace where for the next 9 months to 1 year horizon the debt is already available with us for the next set of requirements. So from that aspect, the sanction of debt for about 9 months are already there in with us.
Currently we have net debt of INR76,000 crores. What is the next expected peak of debt - net debt level?
From an operating debt to EBITDA -- run rate EBITDA, we are at 4.6. And from an overall debt to run rate EBITDA, we are at about 5.6 levels. So we see that it is more or less in the same range that we will move along in the next set of 2 to 3 years till we reach the 50 gigawatt capacity.
Will storage facilities be designed for 2 hours or 4 hours?
It is not a design criteria per se. But yes, we are conscious of the fact that it can be extended from that standpoint. Even if you have 3 hours, you can evacuate the power to 2 hours or 4 hours depending on that particular frame. But 2 to 3 hours is what is the generic there, and you can extend it.
Roughly 11% of the project cost is impacted by silver. Will the IPPs and DISCOMs show some kind of spike in interest because cost of projects will also go up? Will it impact the merchant tariff?
If there is a shortage of power, it will improve the merchant tariff in our case, for sure. Having said that, when we are signing a 25-year PPA, it has to be a win-win for both the parties. I don't think so that DISCOM are just holding it up because of the pricing part. There was a challenge with that. Again, this 42 gigawatt was bid without any backup as far as the offtakers are concerned. And I think that's a challenge in the whole system. You first bid the project, you get a price and then you go to the offtakers for that particular price. A silver pricing, which is a critical component in a module to change the whole dynamics, I'm not very sure that's the right way to put it across.
We're seeing a slowdown this year compared to the past 2 years in terms of tendering. What are your views on tendering within renewables for the next couple of years from an overall industry standpoint?
In the industry, there has been a realization that there are 42 gigawatts of LOAs but not translated into PPAs and PSAs. So there is a backlog out there. When we talk of renewables, we should look holistically taking into consideration the storage, taking into consideration wind, taking into consideration solar, which can be utilized for input to storage, whether it is pumped storage or it is battery storage. There could be some, rather than the central grid to be utilized, the state grid can be utilized and tenders can come from a state too, where they have connectivities on the STU level. A stage has come where the peak power tenders, the RTC tenders are going - we will see more of them rather than a pure-play solar tenders per se.
We wouldn't have accounted for a 3x increase in silver during this period. Modules are amongst the last equipments to be ordered. How do we really account for such projects?
I think, Ashish, you have been very clear. The recent module prices, which you saw in the last year were the lowest in the history of module pricing. In case of our portfolio, we have almost all our bids, which are at a price where we had factored in much higher module prices as well as built in relevant risk framework where we had discounted them with those potential vagaries in the various factors, whether it is modules or other considerations. If the module prices go up, it will increase the cost for the developers, including for us. But it is a question whether you have factored in. If people have gone very aggressive based on last year prices and they have won something, they may face certain issues, but that is not the case with Adani Green.
How much increase in module prices are you seeing currently on a Y-o-Y basis compared to same time last year? What were the prices then and what are the prices now?
Yes, it's around 10%, which we are seeing. You have to appreciate the fact - do you have a long-term relationship with the suppliers. At what scale one is buying. What is the relationship with those particular suppliers which you have, which country you are buying from, what are the capacities which are available there at that particular time. So it's not an apple-to-apple comparison per se. There are things which changes across. We do -- we have been seeing an increase in the recent past of around 10%. But at the end of the day, they are commodities. They can go up and down in that time.