India tweaks rules for domestic sale of export-bound power; Adani to benefit

India's power ministry has tweaked a regulation allowing domestic power plants to sell power back to India that was originally meant to be supplied to neighboring countries, a move that could benefit Adani Power -- the only electricity exporter to Bangladesh via a single plant.

According to a ministry notice seen by S&P Global Commodity Insights Aug. 14, amending guidelines for the "import/export (cross-border) of electricity, 2018", outbound power can be sold back to India by power plants in agreement with neighboring countries.

The move comes against the backdrop of political turmoil and instability in Bangladesh following protests over quotas for government jobs that led to the fleeing of long-running Prime Minister Sheikh Hasina.

"The Government of India may permit connection of such generating station to the Indian grid (inter-state or intra-state) to facilitate the sale of power within India in case of sustained non-scheduling of full or part capacity or default notice issued by the generator for any default including delayed payment under the power purchase agreement (PPA)," the notice read.

According to an agreement signed with the Bangladesh Power Development Board in 2017, Adani Power's 800 MW Godda power plant in the eastern state of Jharkhand sells electricity exclusively to Bangladesh. The power plant uses thermal coal from Adani group's mines in Australia, and started selling power to Bangladesh in 2023.

Sources said the move is aimed at helping Indian companies insulate themselves from political risks or other geopolitical crisis in other countries by opening up selling avenues in India. While state-owned NTPC also has an agreement to supply power to Bangladesh, it is not exclusive and is from different plants, making Adani Power the only seller with exclusive arrangements via one facility.

An Adani Power spokesperson said the amendment is merely an industry-enabling universal provision allowing such generating stations to obtain connectivity to the Indian grid, and as such in no way imposes any financial or other obligation on the government of India to purchase the power from such generating station.

"By connecting such generating stations to the Indian grid, the overall availability of power in the grid will increase, which will help cater to the soaring electricity demand across the country. Increased supply will help in fostering energy security and reducing prices in the domestic energy market," the spokesperson said.