An engineers’ union has alleged that an Adani-owned coal-power station is part of an unauthorised scheme to divert electricity that is contracted to supply the northern Indian state of Haryana to the western state of Gujarat – the home state of Adani chairman Gautam Adani and India’s Prime Minister Narendra Modi. According to the union’s complaint to authorities, the diversion occurred in the peak of the summer months, while Haryana was facing a debilitating heat wave and rolling blackouts, and again recently, during an election period in Gujarat.
Over the past two months, a transmission line that is meant to deliver power generated at the Adani Group’s coal-power station at Mundra, in the western Indian state of Gujarat, to the northern state of Haryana, was used in reverse, to take power from Haryana to Gujarat instead. This was a repeat of an earlier episode of such ‘reverse’ transmission along this line that took place in the summer months of April and May. This reverse transmission appears to have been unsanctioned and in violation of rules.
In May 2022, when half of India was facing a scorching heat wave with the early arrival of summer, long periods of power outages aggravated the situation and resulted in the deaths of about 24 people. During these difficult times, many Indian state governments, including the government of Haryana, would inform the public of scheduled power outages due to shortages in generation.
However, actual power outages exceeded the scheduled outages in numerous places. This was due to an extreme power shortage that the state was facing due to an unresolved tussle with the Adani power plant at Mundra, which meant that the plant was lying virtually idle and not supplying any electricity.
At the same time, documents seen by the authors reveal that, not only was the Adani power plant not supplying to Haryana, it was also apparently part of a scheme to ‘divert’ electricity from Haryana to Gujarat (the home state of Gautam Adani and Prime Minister Narendra Modi) during those summer months, and again in November and December, during elections in Gujarat. According to the documents, the diversion of electricity was conducted without any agreement in place that would make it legally permissible.
As previously reported by AdaniWatch, Haryana, struggling to provide electricity to its citizens in the scorching heat, was facing a dispute over power tariffs with one of its largest power suppliers – the Adani Group’s 4620 MW coal-power plant at Mundra. The tussle between Adani Power Mundra Limited (APML) and Haryana’s government-owned power-distribution companies (discoms) was over the price of imported coal.
APML uses a significant share of coal imported from Indonesia in its Mundra plant. When Indonesia raised the price of coal exports in 2010, the Adani Group (along with several other Indian power generators that imported Indonesian coal) commenced a legal battle seeking to raise the tariffs that applied to its contracts with Indian discoms. The battle concluded in 2019 in the case of the Mundra plant, when the Supreme Court found legal grounds to permit the raising of tariffs, despite a 2017 ruling by the same court that had rejected the rise in Indonesian coal prices as grounds to do so. Following the Supreme Court’s ruling, APML informed the Haryana government that it would not comply with Power Purchase Agreements (PPAs) it had signed with the state’s discoms in 2008, that specified a particular tariff.
Despite several discussions between the power company and state authorities, APML refused to deliver electricity at the contracted price of 2.94/unit.
APML sought to renegotiate the terms of the contract and implement a supplementary PPA in place of the earlier agreement with an increased power tariff. By April 2022, APML had stopped supplying power to Haryana for over six months.
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Negotiations between Haryana and Adani
In a meeting on 23 April 2022, Adani Power executives Rajesh Adani and Anil Sardana presented the company’s demand for a supplementary PPA to Haryana’s Chief Minister Manohar Lal Khattar (who is a member of Narendra Modi’s BJP). Khattar agreed at the meeting that a supplementary PPA was necessary to ease the state's power issue until the rising costs of imported coal returned to reasonable levels.
According to the revised agreement, Haryana would receive just 70% of the 1424 MW of contracted power from Adani Power at the originally contracted tariff of rate of Rs 2.94 per unit. This quantity of energy (1050 MW) would be generated solely from domestic coal. The remaining 30% would by renounced by the state, which, according to the original PPA, was to be generated by Adani Power using imported coal.
After several meetings between the representatives of both sides, the supplementary PPA was signed.
However, according to an engineers’ union complaint seen by AdaniWatch, even after this supplementary PPA was signed, instead of transferring power under the new PPA, there has been a reverse flow of power from the power-deprived state of Haryana to Gujarat.
Unauthorised Reverse Flow of Power
The All India Power Engineers Federation (AIPEF) is a representative body of the engineers working in power utilities under the central and state governments in India. In a representation dated 26 November 2022 to the Ministry of Power and the state governments of Gujarat and Haryana, AIPEF submitted that, despite the power crisis in the state of Haryana, there had been a wrongful diversion of power from Haryana to Gujarat. In April, the federation had previously sent letters to the above authorities for non-supply of contracted power by APML (and by another massive power station located in Mundra, owned by a company in the Tata Group).
As per the PPA signed in 2008, APML was to supply 1424 MW to Haryana through a HVDC (High Voltage Direct Current) transmission line, which was built to transfer power from Mundra, Gujarat, to a receiving station at Mohindergarh, Haryana. But, instead, during the period Apr-May 2022, there was a reverse flow of 403 MUs (mega units) of power from Haryana to Gujarat through the HVDC line.
According to the letter, while citizens were facing power outages of more than 12 hours per day, local private contractors were making a killing by selling diesel-generated electricity at a whopping Rs 38 per unit. This reverse flow from Haryana to Gujarat resumed in November, a month before state elections in Gujarat, with over 951.71 MU sent up to 10 December.
AIPEF also stated that APML’s Mundra power station, with a capacity of 4620 MW, was functioning at only 9% of its PLF (Plant Load factor) – that is, generating only 423 MW. Plant Load Factor (PLF) is the ratio of average power generated by the plant to the maximum power that could have been generated in a given time.
While the APML thermal units were operating at less than 9% PLF, electricity to the extent of 571.9 MU was lifted from Haryana and provided to Gujarat. On most days, the energy diversion from Haryana to Gujarat ranged between 25 and 33 MU per day (1040 MW to 1375 MW). Further, during the same time in November, eight of the nine power generating facilities owned by APML in Mundra were not operating. With only one functional unit in Mundra, parts of Haryana were facing blackouts for up to three hours per day due to the diversion of Haryana’s power to Gujarat.
The AIPEF’s letter points out that such transfers are only supposed to take place when a state is generating more electricity than it is consuming, and delivers its surplus to other states, and that the recipient states must pay the ‘exporting’ state’s discoms.
‘When such interregional energy supplies are made, as in the instance of Haryana's delivery to Gujarat, the Haryana thermal stations must be operated at a greater capacity, and it is essentially the excess thermal station power that is exported. This means that Haryana has to burn more coal and create more electricity to execute the diversion to Gujarat. As a result, Haryana must pay more fuel costs. This provides [a] basis for Haryana to receive the overdue payments, plus interest, against earlier energy delivery for April, May, November and December 2022,’ the letter says.
Going by the data provided in the letter, this was not the case, as Haryana was going through a power crisis. It was not producing excess power. It is also unknown whether Gujarat made any payment to the Haryana state discoms for power sent in the first half of the year.
According to the information furnished by Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL), a Haryana state discom, in response to an application under India’s Right to Information act (that mandates government agencies and government owned companies to respond to questions from the public), no agreement has been signed for the reverse flow of power from Haryana to Gujarat, and neither has any tariff been set for it.
Similar applications sent by the AIPEF to the regional power-purchase centres of the respective states, Haryana Power Purchase Centre (HPPC) and Gujarat Urja Vikas Nigam Limited (GUVNL), yielded similar responses denying the existence of any agreement for the reverse power transfer between the parties, but not necessarily denying the power transfer.
In its letter, AIPEF terms this diversion of power non-transparent and irregular. It also said ‘since power diversion is still taking place in a reverse direction, it would appear that some higher authority in Haryana govt or Central Govt may have directed/forced Haryana to agree to the reverse power flow.’ AIPEF also requested the Chief Minister of Haryana and the Ministry of Power to issue a clarification for such actions by state agencies.
An irregular explanation
A letter sent to the AIPEF by an official in India’s Ministry of Power provides an explanation that the AIPEF deemed unsatisfactory and irregular.
According to the response, during the period of power diversion from April to May, the demand in the northern region (Haryana) was low, and the western region (Gujarat) was high. Due to this alleged low demand in the northern region, the response says, power generation at APML Mundra was NIL; therefore, as there was no power coming from HVDC West to HVDC North, the lines were operated in reverse to transfer power from Mohindergarh, Haryana to Mundra, Gujarat.
This explanation flies in the face of the widely experienced rolling blackouts that Haryana faced during summer, which were officially notified by the government.
It adds that, due to high power generation from solar power plants in Rajasthan, there was congestion in the transmission network from Rajasthan to Gujarat. Therefore, HVDC lines through Haryana were used as an alternative route to evacuate power from solar plants in Rajasthan to the receiving end at Gujarat.
Padmajit Singh, head of the AIPEF, contested this argument in a phone conversation with the authors.
‘When solar power plants are constructed, they also include a transmission network which can handle greater loads than the total generation capacity of the plant, therefore such congestion should not be the reason behind reverse transfer of power from Haryana.’
According to his assessment, about 1200 MW of power is being directed towards Gujarat from Haryana-based thermal power plants, which are burning extra coal to send that amount of energy on a daily basis.
The reply does not specify whether Haryana was paid for the amount of power sent in April, May, November and December, nor does it make clear whether a per-unit tariff has been set for the ongoing power diversion.
Meanwhile, Haryana continues to divert power to Gujarat from the HVDC lines, which were constructed for the sole purpose of transferring power from APML Mundra coastal station to Haryana. APML Mundra has not yet started transferring the power specified in the supplementary PPA formulated in the meetings held in April 2022 and is only functioning at a fraction of its capacity.
An Election Bonanza?
It is worth noting that the latest transfers of power from Haryana took place right before a state election in Gujarat that was conducted in the first week of December. The BJP won this election by a record margin.
A routine feature of Indian elections is that, just prior to elections, government departments that have functioned below par through the five years of an elected administration’s term, spring into action at the last stretch, delivering services to mollify any accumulated public anger at sub-standard service delivery. Roads, streetlights, drains and pipes are repaired overnight. Long-pending infrastructure projects are accelerated to completion. And regular power blackouts cease for a short period of time and the public receives 24-hour coverage.
Is that what happened here? It is for the government to say. Questionnaires seeking comment were sent to the Adani Group, to the Haryana government and to the Central Government’s power ministry. This article will be updated if there is any response.
The authors are independent journalists
